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52 Remuneration report
Unilever Annual Report & Accounts and Form 20-F 2002
Details of the companies which formed the reference group
of comparator companies, and a ranking table showing
Unilever’s position relative to this peer group over the last
five years are given on page 41.
By using the TSR table as a performance indicator for our
Long-Term Incentive Plan there is a clear link between the
reward given to directors and the investment growth
enjoyed by our shareholders in comparison with that
enjoyed by investors in the defined peer group of
companies. It will be noted from the table that there is
no award if Unilever’s performance is ranked at less than
position 11 of the peer group and an award in excess of
the full conditional award will only be made if Unilever is
ranked in the top four of the group.
Unilever’s position relative to broad based
equity indices
Under the UK Directors’ Remuneration Report Regulations
2002 we are also required to show Unilever’s relative share
performance against a holding of shares in a broad based
equity index for the last five years. The Remuneration
Committee has decided to show Unilever’s performance
against two indices (Euronext AEX Index, Amsterdam and
FTSE 100 Index) as these are the most generally used
indices in the Netherlands and the UK, where we have our
principal listings.
0
80
100
120
40
60
20
02
Unilever
Unilever NV vs AEX Amsterdam %
Five years ended 31 December 2002
Unilever AEX
140
98 99 00 01
180
160
0
180
160
100
120
20
02
Unilever
Unilever PLC vs FTSE 100 %
Five years ended 31 December 2002
Unilever FTSE 100
140
40
60
80
98 99 00 01
Directors’ pensions
The aim of the Remuneration Committee is that retirement
benefits should be in line with good practice of major
companies in continental Europe and the United Kingdom,
bearing in mind the need to make the retirement benefit
position of the various directors, who have different
nationalities, reasonably comparable.
In accordance with this policy, directors are covered by a
final salary defined benefit arrangement and can retire with
retirement benefits broadly equivalent to two-thirds of final
pensionable pay at age 60. Final pensionable pay includes
the average annual performance bonuses paid in the last
three years, up to a maximum of 20% of base pay. This is
similar to the current Group practice for senior executives.
It is the view of the Remuneration Committee that a
significant part of directors’ remuneration should be
performance related, and that therefore part of the annual
performance related bonus should be pensionable.
The Committee reconsiders this topic from time to time in
the light of the recommendations of the Combined Code
and continues to take the view that these arrangements
should be kept in place.
The tables on page 53 give details of the directors’ pensions
values for the year ended 31 December 2002.