Unilever 2014 Annual Report Download - page 25

ATTENDANE
Paul Walsh 5 / 5
harman of the ompensaton ommttee (prevously called
the ompensaton and Management Resources ommttee)
Ann Fudge 5 / 5
Kees Storm 4 / 5
Mchael Treschow 5 / 5
Ths table shows the attendance of Drectors at ommttee meetngs held
n the year ended 31 December 2014 If Drectors are unable to attend a
meetng, they have the opportunty beforehand to dscuss any agenda
tems wth the ommttee harman Attendance s expressed as the
number of meetngs attended out of the number elgble to be attended
OMMITTEE MEMBERS AND ATTENDANE
• No changes have been made to the remuneraton
polcy durng the year
• The ommttee approved the mplementaton
and roll-out of the new global employee share
plan ‘SHARES’ for employees below
management level
• The ommttee revewed the remuneraton
framework and concluded that t contnues
to serve Unlever well, partcularly n lght
of the strong level of shareholder support
for Unlever’s remuneraton polcy at the
2014 AMs
• Revew of the global reward structure for
Unlever’s ‘Top 100’ executve management
populaton below Executve Drector level, two
years after mplementaton, has proven that
t s delverng effectvely aganst the obectves
that had been set for t
• Further revew and shapng of Unlever’s future
reward framework to ensure that t remans
algned wth strategy and long-term shareholder
value creaton
• Revew of relatve compettve poston of reward
levels for Unlever’s ‘Top 100’ executve
management populaton
• Revew of progress n mplementng SHARES
HIHLIHTS OF 2014
PRIORITIES FOR 2015
FORMAT OF THE DIRETORS’ REMUNERATION REPORT
Our Drectors’ Remuneraton Report s splt nto the
followng sectons
• harman’s letter – page 62 to 63
• Remuneraton Prncples – page 63 to 64
• Annual Remuneraton Report – page 65 to 77
HAIRMAN’S LETTER
DEAR SHAREHOLDERS,
I am pleased to report that our Remuneraton Polcy was adopted
at the 2014 NV and PL AMs wth strong levels of support and
remans unchanged for 2015
REMUNERATION POLIY  AVAILABLE ON OUR WEBSITE
To smplfy ths year’s report we have chosen not to repeat our
Remuneraton Polcy, whch s avalable on our webste To reflect
the reward decsons taken for 2015 by the ompensaton
ommttee we have updated the supportng nformaton n the
remuneraton polcy table and other contextual nformaton
wwwunlevercom/ara2014/downloads
BUSINESS PERFORMANE AND REMUNERATION
OUTOMES FOR 2014
Annual bonus – a year of reslent performance
Durng the year Unlever faced an ncreasngly challengng
external envronment In addton to ferce competton, we also
saw weakenng consumer demand across many parts of the
world and ncreasng external volatlty The busness responded
to the combnaton of these events wth reslence by heghtenng
focus on cost control and margn mprovement Although our
overall underlyng sales growth lowered to 29% we contnued to
outperform our markets, as we have done consstently snce
Paul Polman’s appontment as EO Through rgorous control of
overheads, we delvered a core operatng margn mprovement of
04 percentage ponts despte adverse currency movements Wth
the qualty of these results n mnd, the ommttee exercsed ts
udgement to uplft the annual bonus outcome from 68% to 80%
of target and decded to pay a bonus of 132% of salary (66% of
maxmum) to the EO, Paul Polman, and a bonus of 88% of salary
(59% of maxmum) to the FO, Jean-Marc Huët The ommttee
beleves that these awards farly reflect the performance
delvered n 2014 Ths consstency n performance delvery, now
establshed over the last sx years, shows that Unlever s buldng
a more reslent company We are better able to wthstand the
challenges of an ncreasngly uncertan busness envronment
because we are movng towards a busness model wth long-term
sustanablty at ts core
SIP and MIP – strong fnancal performance over the last
three years
Over the past three years, Unlever has agan delvered very
strong fnancal performance Underlyng sales growth durng
ths perod was 47% per annum ore operatng margn
mprovement over the perod was an average of 037 percentage
ponts per year, demonstratng management’s drve for consstent
top and bottom lne growth Unlever has also generated very
strong operatng cash n the perod, wth cumulatve operatng
cash flow of 155 bllon Total shareholder return (TSR) over ths
three-year perod was below the performance of our peers, and,
as a result, no part of the SIP and MIP awards related to TSR
wll vest The ommttee beleves the outcomes of the long-term
share ncentve plans represent a far reflecton of Unlever’s
underlyng performance over the last three years On the bass
of ths performance, the ommttee determned that the SIP
awards to the end of 2014 together wth MIP awards, whch were
granted to Executve Drectors for the frst tme n 2012, wll vest
at 121% of ntal award levels (e 61% of maxmum for SIP and
81% of maxmum awards for MIP, whch s capped at 150%)
62 Unilever Annual Report and Accounts 2014Governance
DIRETORS’ REMUNERATION
REPORT