32 Share-based compensation
Ahold Annual Report 2012 131
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Notes to the consolidated
financial statements
In 2012, Ahold's share-based compensation program consisted of a conditional share grant program called Global Reward Opportunity (GRO). This program, introduced in 2006, replaced
the Company's share option plans. In principle, plan rules will not be altered during the term of the plans. Total 2012 GRO share-based compensation expenses were €40 million (2011€29
million). Ahold's share-based compensation programs are equity-settled.
The fair value of the shares granted under the GRO program in 2012 at grant date was €61 million, of which €3 million related to Corporate Executive Board members. This fair value is
expensed over the vesting period of the grants adjusted for assumed annual forfeitures of 5% (20116%). For the share-based compensation expenses allocable to the individual Corporate
Executive Board members, see Note 31.
GRO program
Main characteristics
Under the GRO program, Ahold shares are granted through a mid-term (three-year) and a long-term (five-year) program. The number of conditional shares to be granted depends on the at-
target value, the annual incentive multiplier of the preceding year and the average share price for six months preceding the date of the grant. The shares are granted on the day after the annual
General Meeting of Shareholders and vest on the day after the publication of Ahold's full-year results in the third year (mid-term component) or fifth year (long-term component) after the grant,
provided the participant is still employed by Ahold. Shares granted to Corporate Executive Board members vest on the day after the annual General Meeting of Shareholders in the third year
(mid-term component) or fifth year (long-term component) after the grant, subject to continued employment. Corporate Executive Board members are not allowed to sell their shares within a
period of five years from the grant date, except to finance tax due at the date of vesting. For participants other than the Corporate Executive Board members, the mid-term component of the
program contains a matching feature. For every five shares a participant holds for an additional two years after the vesting date, the participant will receive one additional share.
The conditional shares granted through the long-term component are subject to a performance condition. The number of shares that will ultimately vest depends on Ahold's performance
compared to 11 other retail companies (refer to the Remuneration section for the composition of the peer group), measured over a five-year period using Total Shareholder Return (TSR),
which is the sum of share price growth and dividends paid. The table below indicates the percentage of conditional shares that could vest based on the ranking of Ahold within the peer group:
Rank
1
2
3
4
5
6
7
8
9
10
11
12
Corporate Executive Board
150%
130%
110%
90%
70%
50%
25%
0%
0%
0%
0%
0%
Other participants
150%
135%
120%
105%
90%
75%
60%
45%
30%
15%
7.5%
0%
share
As of the end of 2012, Ahold held the third position with respect to the 2008 share grant, the fourth position for the 2009, 2010 and 2012 share grant and the fifth position for the 201
grant. The 2008 grant's long-term component vests on the day after the publication of the 2012 annual results. The final TSR ranking for this component is the third position (110% for
Corporate Executive Board members and 120% other participants). The positions with respect to the 2009, 2010, 2011 and 2012 share grants are not an indication of Ahold's final ranking
at the end of the performance periods, nor do they provide any information related to the vesting of shares.
Upon termination of employment due to retirement, disability or death, the same vesting conditions as described above apply. Upon termination of employment without cause
(e.g. restructuring or divestment), a pro rata part of the granted shares will vest on the date of termination of employment.
