r
Remuneration (continued)
CFO 150% 75% 163% 238%
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Investors
Ahold Annual Report 2013 70
Conditional share grant
The target value to be granted under the conditional share grant component for the ExCo is 50% of base
pay. Furthermore, the actual value of the conditional share grant is subject to a performance condition at
grant. The performance condition is the multiplier of the EIP of the preceding year (with a range between
0% and a maximum of 150%1). The maximum grant value is 75% of base salary.
Timeline for 2013 conditional GRO grant
Performance period for EIP
2012
April grant
2013
2014
2015
April vesting
2016
Considering the above and the link with the EIP, the Conditional GRO grant can be considered as a
deferred bonus plan, with a mandatory conversion into shares.
Calculation example
Assuming an at-target conditional share grant value of €100,000 and an annual incentive multiplier for
the preceding year of 0.8, the value to be granted would be 0.8 x €100,000 €80,000. Assuming,
furthermore, a six-month average share price preceding the date of grant of €10.00, the number of
shares to be conditionally granted would be 8,000. The number of conditionally granted shares is also the
maximum number of shares that can vest. For more specifics on the maximum vesting per ExCo member,
see table below.
Performance share grant
The target value to be granted under the
performance share grant is differentiated for the
ExCo per role to align this component with market
practice. For the CEO and the U.S.-based COO, it
has been increased to 135% of base salary and for
the CFO and the CCGC the grant value remains
100% of base salary. The vesting of the performance
shares is subject to a performance hurdle at vesting
after a performance period of three years.
Half of the performance share grant is linked to a
three-year return on capital target. The number of
shares that eventually vest depends on performance
and can range between 0% and a maximum of
150% of the number of shares granted.
For the other half of the grant, the performance at
vesting is measured using TSR (share price growth
and dividends paid over the performance period)
benchmarked against the TSR performance of a
peer group (see table "benchmarking.") The number
of shares that will vest depends on Ahold's relative
ranking in the peer group. An independent external
advisor determines the ranking based on TSR
performance. No shares will vest to ExCo members
if Ahold ranks below the sixth position. The table
below indicates the percentage of performance
shares that could vest based on Ahold's ranking.
Company ranking
Rank
Rank
Rank
Rank
1 175%
4 100%
7 0%
10 0%
2 150%
5 75%
8 0%
11 0%
3 125%
6 50%
9 0%
12 0%
In anticipation of potential changes to the
peer group due to delisting, mergers or other
extraordinary circumstances, the Supervisory Board
has the discretion to include comparable companies
from a predetermined list of substitutes.
If a company drops out of the "main" peer group,
it is replaced by the company on the substitute list
(e.g., Sainsbury or Casino) that has the highest
TSR performance.
Calculation example
Assuming an at-target performance share grant
value of €100,000 and a six-month average
share price preceding the date of grant of
€10.00, the number of shares to be conditionally
granted would be 10,000. In case of below
threshold performance, no shares would vest.
When maximum performance is achieved, 162.5%
(i.e., (50% x 150%) (50% x 175%)) of the shares
granted may vest. In this example, a total number
of 16,250 (10,000 x 162.5%) would vest. For more
specifics on the maximum vesting per ExCo
member, see table below.
Maximum vesting
Maximum vesting
Target award
conditional shares
performance shares
Total maximum vesting
(as of base pay)2
(as of base pay)2
(as of base pay)2
(as of base pay)2
CEO
185%
75%
219%
294%
COO Ahold USA
185%
75%
219%
294%
CCGC
150%
75%
163%
238%
1 The final EIP multiplier is based on the achievement of the objectives of the EIP, with a cap at 150% of the base salary.
2 Under the assumption of a flat share price.
