Unilever 2014 Annual Report Download - page 29

Download and view the complete annual report

Please find page 29 of the 2014 Unilever annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 105

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105

PERFORMANE
ELEMENTS OF
REMUNERATION
AT A LANE DESRIPTION
ANNUAL BONUS • EO – target 120% of base salary,
maxmum 200% of base salary
• FO – target 100% of base salary,
maxmum 150% of base salary
The performance measures for 2015 wll be
In addton, when determnng annual bonus awards, the ommttee wll
also consder personal performance and the qualty of results n terms
of both busness results and leadershp, ncludng corporate socal
responsblty and progress aganst the delvery of USLP goals
The ommttee determned that free cash flow would replace underlyng
volume growth as a performance measure for 2015 Ths change wll
assst Unlever n focusng on cost reducton and mprovng cash
generaton, as well as top-lne growth, n a challengng market
envronment Underlyng volume growth wll reman a factor that s
consdered by the ommttee as part of the qualty of results assessment
MIP 2015 • Out of ther annual bonus awards,
Executve Drectors are requred to
nvest 25% of ther gross bonus and
may nvest up to 60% of ther gross
bonus n the MIP (nvestment shares
whch are held n the ndvdual’s name)
• They are awarded an equal number
of MIP matchng shares
• Maxmum vestng for matchng shares
s 150% of the ntal award
• The maxmum award of matchng
shares for the EO and FO (as a
percentage of base salary at grant),
assumng maxmum bonus, maxmum
deferral under the MIP, would be
180% of base salary and 135% of base
salary respectvely
Matchng shares awarded under the MIP n 2015 wll be subect to the
same measures as SIP awards made n the year Further detals of the
performance measures are dsclosed below
The ommttee consders that usng the same performance measures
across both the MIP and SIP s approprate, as the performance
measures used reflect our key strategc goals and mantan the
algnment of our ncentve plans to delverng our clearly stated growth
ambtons ven that we use four dfferent performance measures, the
ommttee beleves that the proporton of remuneraton lnked to each
performance measure s not excessve
SIP 2015 AWARDS • Target award 200% of base salary
for the EO and 175% of base salary
for FO
• Maxmum vestng of 200% ntal award
• Maxmum vestng of 400% of base
salary for the EO and 350% of base
salary for the FO
Performance targets are assessed over a three-year perod
Performance measures for 2015 awards
(a)
For the three busness-focused measures, 25% of target awards vest for achevng threshold performance 200% of target awards vest (capped at 150%
under the MIP) for maxmum performance
(b)
For the relatve TSR measure, Unlever’s TSR s measured aganst a comparator group of other consumer goods companes TSR measures the return
receved by a shareholder, capturng both the ncrease n share prce and the value of dvdend ncome (assumng dvdends are renvested) The TSR results
are measured on a common currency bass to better reflect the shareholder experence
The current TSR peer group s as follows
Avon olgate-Palmolve Henkel L’Oréal Recktt Benckser
Beersdorf Danone Kao Nestlé Shsedo
ampbell Soup eneral Mlls Kellogg’s Pepso
oca-ola Estée Lauder Kmberly-lark Procter & amble
The TSR comparator group conssts of 18 companes (19 ncludng Unlever) No shares n the porton of the award subect to TSR vest f Unlever s ranked
below poston 10 n the peer group at the end of the three-year perod, 50% vests f Unlever s ranked 10th, 100% vests f Unlever s ranked 7th and 200%
(150% under the MIP) vests f Unlever s ranked 3rd or above Straght-lne vestng occurs between these ponts The ommttee may change the TSR
vestng levels set out above f the number of companes n the TSR comparator group changes
Underlying sales
growth (⅓)
Free cash flow (⅓) Core operating
margin
improvement (⅓)
Underlying
sales growth
(25%)(a)
Core operating
margin
improvement
(25%)(a)
Cumulative
operating cash
flow (25%)(a)
Relative total
shareholder
return (25%)(b)
Both performance conditions
must reach threshold
performance, before any
payout in respect of either
measure is made.
66 Unilever Annual Report and Accounts 2014Governance
DIRETORS’ REMUNERATION
REPORT ONTINUED