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Remuneration
63
Ahold's remuneration policy is prepared
in accordance with the Dutch Corporate
Governance Code. It was adopted at
the General Meeting of Shareholders
on April 17, 2013, and amendments
were adopted at the General Meeting
of Shareholders on April 15, 2015.
Remuneration policy
Total Direct Compensation
Benchmark
Base salary
Ahold at a glance I Business review I Governance I Financials I Investors
Ahold's remuneration policy aims to attract,
motivate and retain the best-qualified workforce, in
a cost-effective way. The policy is reviewed annually.
The current policy, which was adjusted to be simpler
and more transparent than the previous policy, was
submitted and approved in the 2013 annual General
Meeting of Shareholders. It aligns with our Reshaping
Retail strategy and better supports the Company's
pay-for-performance culture. During the 2015 annual
General Meeting of Shareholders, the amendments
to the remuneration policy were approved.
Further details on the Management Board members'
employment agreements, individual remuneration,
pension, shares, and other interests in Ahold are
outlined in Notes 31 and 32 to the consolidated
financial statements.
Three elements of remuneration - a base salary, an
annual cash incentive and a long-term equity-based
component - are collectively referred to as Total
Direct Compensation.
Although it is an important component of the overall
remuneration package, the pension benefit is not
part of Total Direct Compensation. Further details
on Ahold's pension benefit are outlined in the
chapter Pensions and other contract terms.
Total Direct Compensation
thousands
5.0
4.0
3.0
€4,200
€2,331
€2,564
2.0
1.0
CEO CFO COO
Global Reward Opportunity (GRO)2
ExCo Incentive Plan (EIP)1
A Base salary 2015
1 "EIP" represents the at-target opportunity.
2 "GRO" represents the at-target value award
Ahold
Annual Report 2015
The competitiveness of the Management Board
remuneration is benchmarked annually against
the same peer group used to benchmark the
performance of Ahold (see table below).
Ahold Peer Group
Wal-Mart Stores
Costco
Supervalu
Carrefour
Kroger
Delhaize Group
Metro
Target
Staples
The level of the base salary of the members
of the ExCo is derived from the benchmarking of
Total Direct Compensation. Adjustment of the base
salary is at the discretion of the Supervisory Board.
Tesco
Casino
The peer group reflects Ahold's geographic operating
areas and the markets most relevant to the recruitment
and retention of top management. In addition, AEX
market practice in the Netherlands is also taken
into consideration. In addition to the level of overall
remuneration, Ahold evaluates the composition of the
Total Direct Compensation, including the risk profile
and the level of fixed (base salary) and variable
(annual and long-term incentives) components,
on an annual basis.
The target Total Direct Compensation level is
typically around the median of the peer group.
In anticipation of potential changes to the peer
group due to de-listing, mergers and or other
extraordinary circumstances, the Supervisory Board
has defined a short list with substitutes. At the
Supervisory Board's discretion, companies in the
main peer group can be replaced by companies
from the substitute list. In general, geographical
spread is leading so, if a U.S.-based peer drops
out, it is replaced by a U.S.-based company from
the substitute list. For benchmarking purposes, from
2015 onwards, Casino replaced Safeway in the
Ahold peer group. For relative TSR measurement,
this substitution comes into effect for all unvested
and to-be-granted GRO performance shares.
Base salary
thousands
0.2 0.4 0.6 0.8 1.0
€975
CEO
€1,000
€615
€658
€666
€650
€658
€666
Base salary 2013
0 Base salary 2014
Base salary 2015
