Remuneration (continued)
Pensions and other contract terms
Future outlook
Ahold at a glance
Business review
Governance
Pension
All existing pension arrangements in the Netherlands
have been brought in line with the applicable
fiscal pension regulations. The pension plan for
Management Board members is identical to that
of all other associates in the Netherlands and is
referred to as a defined benefit plan, based on
career average salary (at Ahold). The retirement age
is 67 The pensionable salary is capped at around
€100,000 (2015: €96,544). Each Management
Board member, working on a Dutch contract, pays
a pension premium contribution calculated similarly
to that of all other associates in the Netherlands.
In addition, Management Board members receive
a gross (age dependent) pension allowance and can
choose to participate in a Net Pension Arrangement
by investing the net (after tax) amount. The Net
Pension Arrangement is identical to that of all other
associates in the Netherlands whose pensionable
salary exceeds the cap. Participation in this Net
Pension Arrangement is voluntary.
Loans
Ahold does not provide loans or advances
to members of the Management Board or the
Supervisory Board. There are no loans or advances
outstanding. Ahold does not issue guarantees to
the benefit of members of the Management Board
or the Supervisory Board. There have been no such
guarantees issued.
Additional arrangements
In addition to the remuneration of the Management
Board 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 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.
It is proposed to the General Meeting of
Shareholders that the Company's remuneration
policy be amended in connection with the proposed
Merger. The proposed remuneration policy is outlined
in the shareholder circular.
Vesting of shares under the GRO plan
On April 20, 2016, a maximum of 0.3 million shares
granted in 2013 to members of the Management
Board under the Global Reward Opportunity (GRO)
equity-based long-term incentive plan and 0.2 million
performance shares granted in 2011 to members
of the Management Board under the long-term
component of the GRO plan are expected to vest.
Except to finance tax due on the vesting date,
members of the Management Board cannot sell
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.
On March 4, 2016, a maximum of 3.1 million shares
granted in 2013 to Ahold associates under the
GRO plan, 1.9 million performance shares granted
in 2011 to Ahold associates under the long-term
component of the GRO plan, and 97,000 matching
shares granted in 2011 to Ahold associates 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 allowed
to sell all or part of the shares vested.
The Company will use treasury shares for delivery
of the vested shares.
