H
71
Remuneration (continued)
Pension and other contract terms
tifilUE3
Future outlook
Ahold at a glance
Our strategy
Our performance
Governance
History of grant vesting
Analysis shows that the GRO program generated
a higher value in the case of an above-target
performance and a lower value in the case of a
below-par performance. The expectation is that the
introduction of the company multiplier for one-third
of the grant (the conditional share grant only; the
performance share grant will be granted at target)
will have a stabilizing effect.
Share holding requirements and
ownership guidelines
Management Board members must retain the
shares awarded under the GRO program for a
period of at least five years from the grant date.
A portion of the shares is allowed to be sold to
finance tax due at the date of vesting. All members
of the Management Board are required to hold
shares in the Company with a value equal to 150%
of their base salary. The holding may be built up by
retaining all after-tax shares from the GRO program
and does not require additional purchases.
Number of
common
shares1,2
of
base
salary
Dick Boer
265,824
360%
Jeff Carr
10,000
21%
Lodewijk Hijmans vd Bergh
14,626
36%
James McCann
110,000
224%
1 Share price on December 29, 2013, was €13.22.
2 Vested GRO shares or purchased shares.
Claw-back
A claw-back clause is applicable to all grants under
the annual cash incentive plan and the GRO
program to the Management Board members.
Pension
The pension plan for Management Board members
is identical to that of all other Ahold employees in
the Netherlands (including the other members of
the ExCo) and is referred to as a defined benefit
plan, based on career average salary (at Ahold).
The normal retirement age is 65. Under this plan,
each Management Board member pays a pension
premium contribution of approximately 3.5% of his
or her pension-bearing salary. During 2012, the
Ahold Pension Fund plan was amended. The plan
amendments have become effective in two phases:
the first on January 1, 2013, and the second on
January 1, 2014. The pension accrual for future
benefits has been lowered from 2.25% to 2% as
of January 1, 2014, contributions from participants
will be gradually increased and the income offset
component will be gradually lowered. The employer
contribution and the conditional additional funding
rules remain the same.
As long as the 150% is not reached the
Management Board is not allowed to sell
any shares, except for tax purposes under the
GRO program.
Financials
Investors
Ahold Annual Report 2013
Loans
Ahold does not provide loans or advances to
members of the ExCo or the Supervisory Board.
There are no loans or advances outstanding.
Ahold does not issue guarantees to the benefit of
members of the ExCo or the Supervisory Board.
There have been no such guarantees issued.
Additional arrangements
In addition to the remuneration allocated to ExCo
members, a number of additional arrangements
apply. These include expense allowances, medical
insurance and accident insurance, and are in line
with standard practice in the Netherlands.
Employment agreements
The term of appointment for all Management Board
members is set at four years, while the term of
employment is indefinite. If the Company terminates
the employment agreement of any member of the
Management Board, the severance payment is
limited to one year's base salary. The same applies
if an initial employment agreement for four years
is not continued because the Management Board
member is not reappointed. The employment
agreements may be terminated by Ahold
with a notice period of 12 months and by the
Management Board member with a notice period
of six months.
For 2014 no adjustments to the remuneration policy
are expected.
Vesting of shares under the GRO plan
On February 28, 2014, a maximum of 2.3 million
conditional shares granted in 2011 to Ahold
employees under the mid-term component of the
Global Reward Opportunity (GRO) equity-based
long-term incentive plan, 2.8 million performance
shares granted in 2009 to Ahold employees under
the long-term component of the GRO plan, and
0.1 million matching shares granted in 2009 to
Ahold employees under the mid-term component
of the GRO plan are expected to vest. Vesting is
subject to the participant being employed by the
Company on the applicable vesting date. On the
vesting date, participants are eligible, subject
to the GRO plan rules, to sell all or part of the
shares vested.
On April 17, 2014, a maximum of 0.2 million
conditional shares granted in 2011 to members
of the Management Board under the mid-term
component of the GRO plan and 0.2 million
performance shares granted in 2009 to members
of the Management Board under the long-term
component of the GRO plan are expected to vest
with continuing and retired Board members who
received the grants. Except to finance tax due on the
vesting date, members of the Management Board
cannot sell the conditional shares for a period of at
least five years following the grant date, or until the
end of their employment, if this period is shorter.
The Company will use treasury shares for delivery of
the vested shares.
