Unilever 2006 Annual Report Download - page 56

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Unilever Annual Report and Accounts 2006 53
Report of the Directors (continued)
Report of the Remuneration Committee (continued)
• Share Matching Plan
The matching shares originally granted in 2003 on a conditional
basis vested in 2006, subject to fulfilment of the retention
conditions.
• Executive Share Options
The grants of executive share options made in 2003 became
exercisable as from 2006. As the 2003 grant was based on
Unilever’s EPS performance, the options at vesting were subject
to no further conditions.
Pensions
The Netherlands all-employee pension plan benefit basis
was changed from final salary to career average earnings at
31 December 2006. This had a small impact on the accrued
pension of the Netherlands-based Executive Director.
During 2006, in line with the treatment adopted for other
UK-based employees, individual contributions paid by Executive
Directors in the UK are now paid through a salary sacrifice
arrangement.
Non-Executive Directors
The Non-Executive Directors receive fees from both NV and PLC.
No other remuneration is given in respect of their Non-Executive
duties from either NV or PLC, such as annual incentives, share-
based incentives or pension benefits.
The level of their fees reflects their commitment and contribution
to the companies. The levels were increased in 2006 as a market
analysis against Unilever’speers showed that Unilever had fallen
behind in this area. The Remuneration Committee believes that
the levels outlined below are fair in the light of the responsibilities
carried out by Non-Executive Directors and in view of the need
to attract and retain Non-Executive Directors of the appropriate
calibre and standing.
The current fee levels are set out below:
Non-Executive Role Fees payable by PLC Fees payable by NV
Chairman £175 000 €255 000
Senior Independent Director £45 000 €65 000
Chairman of Audit Committee £38 000 €55 000
Board Committee Chairman £35 000 €50 000
Other Non-Executive Directors £31 000 €45 000
An additional £5 000 per meeting will be paid to Non-Executive
Directors who have to travel to meetings from outside Europe.
Other items
Unilever’s share performance relative to broad-based
equity indices
The UK Companies Act 1985 (schedule 7A) requires us to show
Unilever’s relative share performance, based on Total Shareholder
Return, 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, namely the
FTSE 100 Index, London, and the Euronext AEX Index, Amsterdam
as these are the most generally used indices in the UK and the
Netherlands, where we have our principal listings.
Unilever
AEX
Dec 2001 Dec 2002 Dec 2003 Dec 2004 Dec 2005 Dec 2006
130
110
120
90
100
80
70
60
Growth in the value of a hypothetical investment over five years
AEX comparison based on 30 day average values
Unilever
FTSE 100
Dec 2001 Dec 2002 Dec 2003 Dec 2004 Dec 2005 Dec 2006
150
140
110
120
130
100
90
80
70
60
Five-Year Historical TSR Performance
Growth in the value of a hypothetical £100 holding over five years
FTSE 100 comparison based on 30 trading day average values