Notes to the consolidated financial statements
129
32 Share-based compensation
GRO program
Ahold at a glance
Business review
Governance
Financials
Ahold
Annual Report 2014
In 2014, 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 2014 GRO share-based compensation expenses were €43 million (2013: €43 million). Ahold's share-based compensation programs are
equity-settled.
The fair value of the shares granted under the GRO program in 2014 at grant date was €47 million, of which €4 million related to Management Board members. This fair value is expensed over the vesting period of the
grants adjusted for expected annual forfeitures of 5% (2013: 5%), excluding Management Board members. For the share-based compensation expenses allocable to the individual Management Board members, see Note 31.
Main characteristics
Under the 2006-2012 GRO program, Ahold shares were granted through a mid-term (three-year) and a long-term (five-year) program. The number of shares granted depended 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. For participants other than the Management Board members, the mid-term component of the program contained a
matching share 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 shares were 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 (three-year programs) or fifth year (five-year program)
after the grant, provided the participant is still employed by Ahold. Shares granted to Management 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. Management Board members are not allowed to sell their shares within a period of five years from the grant date, except to finance tax
payable at the date of vesting.
Under the 2006 GRO program, the 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:
2006-2012 GRO program rank
1
2
3
4
5
6
7
8
9
10
11
12
Management 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%
