Notes to the consolidated financial statements
130
32 Share-based compensation (continued)
Ahold at a glance
Business review
Governance
Financials
Ahold
Annual Report 2014
A revised GRO program was introduced as of the 2013 grant. Under the revised GRO program, shares are granted through a three-year program. The program consists of three components: one with a performance hurdle at
grant (conditional share grant) and two components with a performance hurdle at vesting (performance share grants). The size of the conditional share grant is subject to the Executive Committee Multiplier Incentive plan of the
preceding year for Management Board members and the Actual Multiplier of the preceding year for other employees. Half of the performance share grant is linked to a three-year return on capital (RoC) target. Dependent on
RoC performance, the number of shares that eventually vest 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 the
TSR ranking. The table below indicates the percentage of shares with a TSR performance measure under the revised GRO program (2013 and 2014 GRO program) that could vest based on the ranking of Ahold within the
peer group:
2013-2014 GRO program rank
1
2
3
4
5
6
7
8
9
10
11
12
Vice President and up
175%
150%
125%
100%
75%
50%
0%
0%
0%
0%
0%
0%
Other participants
150%
135%
120%
105%
90%
75%
60%
45%
30%
15%
7.5%
0%
As of the end of 2014, Ahold held the fourth position with respect to the 2010 share grant, the fifth position for the 2011 grant, the fourth position for the 2012 grant, the sixth position for the 2013 grant and the sixth position
for the 2014 grant. For the 2010 share grant, the final TSR ranking is the fourth position (90% for Management Board members and 105% for other participants). The positions with respect to the 2011, 2012, 2013 and 2014
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.
At the end of each reporting period, Ahold revises its estimates of the number of shares that are expected to vest based on the non-market vesting conditions (RoC performance). Ahold recognizes the impact of the revision
to original estimates, if any, in the income statement, with a corresponding adjustment to equity. At the end of 2014, the revised estimate of the number of shares in the 2013 grant that will vest in 2016 dependent on RoC
performance, is 51% (2013: 100%). The estimate for the 2014 grant is that 100% of the shares dependent on RoC performance will vest in 2017.
Upon termination of employment due to retirement, disability or death, the same vesting conditions as described above apply. Upon termination of employment without cause in certain circumstances (e.g., restructuring or
divestment), a pro rata part of the granted shares will vest on the date of termination of employment. For the performance shares, the most recent performance results will be applied to calculate the number of vested shares.
In addition, a limited number of shares were granted to other ExCo members and other employees in 2013 and 2014 under a special purpose plan. This program consists of unconditional and conditional shares.
The unconditional shares vest immediately on the award date. The conditional shares vest in two tranches. Half of the conditional shares vest on the day after the publication of Ahold's full-year results in the first year and half
in the second year after the grant. Under this plan, 21,000 shares were granted in 2014 (2013: 123,000). In 2014, 48,000 shares vested (2013: 41,000). At the end of 2014, 55,000 shares were outstanding, of which
48,000 are to vest in 2015 and 7,000 in 2016.
The following table summarizes the status of the GRO program during 2014 for the individual Management Board members and for all other employees in the aggregate.
