TomTom 2006 Annual Report Download - page 27

Supervisory Board report 25 TomTom Annual Report 2006
(ii) Variable remuneration
In addition to their fixed remuneration, members of
the Management Board are eligible to participate in
the management team bonus scheme, which is subject
to approval by the Supervisory Board and based on
performance criteria. For 2006, the bonus pool was
established at a percentage of profit before tax and
was consistent with the bonus pool for 2005.
(iii) Long-term incentive
The members of the Management Board are eligible
to participate in the Company’s 2005 Share Option
Plan. Performance criteria were established by the
Supervisory Board for share options granted to
Management Board members during 2006.
For details of the remuneration of the Management
Board please refer to the notes to the financial
statements which are included in this annual report.
Employment contracts
Members of the Management Board have an
employment contract with the Company.
The contracts are entered into for an indefinite period
of time. However, the term of office of members of
the Management Board is four years, after which the
appointment can be renewed for another period of not
more than four years at a time. In case the employment
of a member of the Management Board is terminated by
or on the initiative of TomTom, then he shall be entitled
to a fixed amount of 50% of his annual base salary,
including holiday allowance, unless the employment is
terminated for cause within the meaning of the Articles
7:677 sub 1 and 7:678 of the Dutch Civil Code, in which
situation the relevant Management Board member is
not entitled to any severance. This amount will be due
in addition to the salary the Company has to pay to
members of the Management Board during the
agreed notice period of 12 months. A member of
the Management Board will not be entitled to the
severance if the employment is terminated by him
or on his initiative.
Outlook 2007
On the basis of a benchmark of Management Board
salaries performed by an independent consultancy in
2006, the Supervisory Board proposes to continue the
current remuneration policy of variable remuneration,
fixed remuneration and long-term incentives. It is the
intention of the Supervisory Board to perform an annual
benchmark of Management Board salaries. Performance
criteria have been established for variable remuneration
and long-term incentive schemes which will be reviewed
and monitored on an ongoing basis by the Supervisory
Board. The performance criteria are based on financial
and operational targets.
The Supervisory Board is considering a possible
amendment to the long-term incentive component
of the remuneration policy. In the event that such an
amendment would result in a material change in the
remuneration policy, the amendment will be submitted
to the General Meeting of Shareholders for adoption.
Financial statements 2006
The consolidated annual financial statements of
TomTom NV for 2006, as presented by the Management
Board, have been audited by Deloitte Accountants B.V.
The Supervisory Board has approved these financial
statements for 2006 and all individual members of
the Supervisory Board (together with the members
of the Management Board) have signed the financial
statements for 2006.
The Supervisory Board recommends that the General
Meeting of Shareholders adopts both the Consolidated
and Company Annual Accounts for 2006. The Annual
Report for 2006 is available at the Company’s offices
on request.
Upon approval of the Consolidated and the Company
Annual Accounts for 2006 and in accordance with
Article 2:394 and Article 2:395 of the Dutch Civil Code,
the Management Board will file the Consolidated and
Company Annual Accounts for 2006 with the Chamber
of Commerce.