Food Lion 2001 Annual Report Download - page 85

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years. The age limit of directors set by the Board is 70 years for the
Chairman and the directors and 65 years for the Chief Executive
Officer. The age limit is 75 years for those directors who were ini-
tially appointed before 1999 or for certain directors appointed as part
of the share exchange with Delhaize America.
For the fiscal year 2001, EUR 1.1 million in directors‘ fees was allo-
cated to the Board members. No other remuneration or advantage in
their capacity of Board member is associated with the directors’
appointments. No loans or guarantees have been extended by Delhaize
Group to members of the Board or the Executive Committee.
Committees of the Board
After the general shareholders‘ meeting on May 23, 2001, Audit,
Governance and Compensation Committees were established.
Audit Committee
The Audit Committee, which is solely composed of non-executive
directors, assists the Board of Directors in fulfilling its responsibili-
ties relating to accounting and reporting practices. Specifically, the
Audit Committee assists the Board of Directors in reviewing accurate
and complete accounting and financial information on Delhaize
Group and verifies and makes recommendations with respect to the
adequacy of the accounting and financial reporting methods used by
the Company. The Audit Committee reviews, with the assistance of
the Statutory Auditor and the internal audit department, Delhaize
Group’s financial reporting procedures and internal financial control
systems. The Audit Committee also reviews the activities and inde-
pendence of the Statutory Auditor and the internal audit department.
Governance Committee
The Governance Committee submits proposals to the Board of
Directors regarding new directors to be nominated for election, or
appointed in the case of a vacancy. The Governance Committee eval-
uates the qualifications of any new director nominee with respect to
the needs of the Board of Directors. The Governance Committee
reviews the size, structure and organization of the Board and its
Committees and evaluates the performance and effectiveness of the
Board and of each of its members. The Governance Committee over-
sees planning for the succession of the Chief Executive Officer and
recommends to the Board the selection or replacement, if necessary,
of the Chief Executive Officer and evaluates his performance.
Compensation Committee
The Compensation Committee reviews, analyzes and makes recom-
mendations to the Board of Directors concerning the compensation
for Delhaize Group’s executive directors and executive officers. The
Compensation Committee also reviews general compensation policy,
any stock option or other profit-sharing programs for the associates of
the Company and other compensation issues.
General Meeting of Shareholders
The general meeting of shareholders of Delhaize Group is held at
least once a year, called by the Board of Directors. The notice of
meeting mentions the items on the agenda and complies with the form
and timing requirements of Belgian Company Law. Among the items
included in the agenda given in the notice of the annual general meet-
ing are consideration of the Directors’report and Auditors’report, as
well as consideration of the annual accounts. The future prospects for
the Company are presented by the Chairman and the Chief Executive
Officer at the general meeting.
Executive Committee and Office of the CEO
The Chief Executive Officer is in charge of the day-to-day manage-
ment of the Company, with the assistance of the Office of the CEO
and the Executive Committee.
In April 2001, the Office of the CEO was founded, consisting of five
members of the Executive Committee. The Office of the CEO assists
the Chief Executive Officer in the management of the Group, ensur-
ing the optimal planning and allocation of human and capital
resources to Delhaize Group’s priorities.
The Executive Committee, chaired by the Chief Executive Officer,
prepares the strategy proposals for the Board of Directors, oversees
the operational activities and analyzes the business performance of
the Group.
The Chief Executive Officer, the Secretary of the Board and the mem-
bers of the Executive Committee are appointed by the Board of
Directors. The non-executive Board members decide, based on the
recommendations by the Compensation Committee, on the compen-
sation of the members of the Executive Committee.
A common philosophy and methodology increasingly drives the
executives’remuneration program design throughout all regions
while the appropriate remuneration levels are determined on the basis
of relevant regional and local standards. The compensation consists
of fixed and variable elements and is linked to the performance of the
Group. Like a very large segment of management, the executives also
benefit from stock option plans.
For the year ended December 31, 2001, the aggregate amount of com-
pensation attributed by the Group to the members of the Executive
Committee as a group for services in all capacities was EUR 6.7 mil-
lion, including 70% aggregate base pay and 30% variable compensa-
tion. An aggregate number of 107,822 Delhaize Group stock options
were allocated to the members of the Executive Committee in 2001.
Executives benefit from corporate pension plans which vary from
banner to banner, including a defined benefit Group insurance system
for European based executives that is contributory and based on the
individual career length, and profit sharing plans as well as defined
benefit plans for US-based executives.
Appropriation Policy
It is the policy of the Company to pay out a regularly increasing div-
idend while retaining significant free cash flow to finance the growth