Remuneration
Ahold Delhaize’s remuneration
policy was prepared in
accordance with the Dutch
Corporate Governance
Code 2008. It was adopted
at the General Meeting of
Shareholders on April 19, 2016.
The remuneration policy became
effective on July 24, 2016, the
first calendar day after the
merger of Ahold and Delhaize
was finalized.
Market competitive pay
Base salary
Management Board
remuneration policy
Remuneration philosophy
Overview
Business review
Governance
Financials
Investors
Ahold Delhaize Annual Report 2016
W M Morisson
Staples
The basic elements of the Total Direct
Compensation provided to Management
Board members are (1) a base salary, (2) an
annual cash incentive and (3) a long-term
equity based program. In line with our overall
remuneration philosophy, the Management
Board’s Total Direct Compensation is
structured and more heavily weighted on
variable short- and long-term incentives tied
to the realization of financial and societal
performance criteria. These performance
criteria are a cornerstone of the
Company’s strategy.
The short-term incentive is focused on the key
financial metrics of a retail organization: sales
growth, operating margin and operating cash
flow. Our focus and goal is to expand market
share, while at the same time grow margins
to increase profitability and manage capital
spending and expenses prudently to secure
strong and sustainable cash flow.
The long-term incentive is measured against
(i) our internal measure on Return on Capital
(RoC), (ii) our external measure of the
Company’s share performance relative to
that of its peers: Total Shareholder Return
(TSR) and (iii) the Company’s contribution to
society through sustainability objectives.
Performance for our long-term incentives is
measured over a revolving three-year period.
The structure of our remuneration policy aligns
the focus of the Management Board with
the interests of the Company’s shareholders,
our local communities and society at large.
Compensation and awards are tied to and
dependent on the delivery of our strategy in
a responsible and sustainable way.
The competitiveness of the Management
Board remuneration is benchmarked annually
against a labor market peer group that
reflects the Company’s geographic operating
areas and the markets most relevant in
relation to the recruitment and retention of
top management. Since Ahold Delhaize is
a Dutch-headquartered company, the AEX
market practice in the Netherlands is included.
The peer group consists of 18 companies,
including peer companies in Europe and the
U.S. as well as AEX-listed companies.
In anticipation of potential changes to the labor
market peer group due to delisting, mergers
or other extraordinary circumstances, the
Supervisory Board has the discretion to include
substitute comparable companies. In general,
geographical composition leads in determining
a replacement company: for example, if a
U.S.-based company drops out, it is replaced by
another U.S.-based company.
The composition (risk profile) of the Total Direct
Compensation levels is also taken into account
when benchmarking base salary levels.
The target Total Direct Compensation level is
typically around the median, with base salary
levels slightly below the median and long-term
incentives at the higher end of the market to
support the pay-for-performance culture and
long-term focus.
The level of the Management Board members’
base salary is derived from the benchmarking
of Total Direct Compensation. Adjustment of
the base salary is at the discretion of the
Supervisory Board.
The Supervisory Board designed the
Management Board’s remuneration policy
to align with the Company’s strategy and to
support its pay-for-performance culture, while
aiming to be effective, transparent and simple.
While developing the remuneration policy, we
carried out scenario analyses to determine
the risks to which variable remuneration may
expose the Company.
AEX
Unilever
Philips
Heineken
Randstad
Ahold Delhaize’s remuneration policy is
aligned with the Company’s strategy and
supports a strong and aligned performance
culture. Our remuneration policy aims at
attracting, motivating and retaining the
best-qualified talent.
European peers U.S. peers
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Metro Target
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Perrachon Boots Alliance
J Sainsbury Best Buy Akzo
Nobel
Relx
