Food Lion 2002 Annual Report Download - page 73

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For fiscal year 2002, the Board of Directors of Delhaize Group will
propose at the annual shareholders meeting of May 22, 2003 that the
aggregate directors’ share of profit be fixed at EUR 600,683. The direc-
tors have voluntarily decided to propose a decrease of their individual
director fee by 38.9% compared to 2001. Directors who serve as exec-
utives are compensated for their service as executives. An aggregate
amount of EUR 135,462 is paid for fiscal year 2002 by subsidiaries of
Delhaize Group to Delhaize Group directors who serve on the board of
wholly owned subsidiaries. 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.
At the May 23, 2002 General Shareholders’ Meeting, Raymond-Max
Boon retired from the Board after serving on it for 34 years. In grati-
tude for his dedication and contribution to Delhaize Group, he was
granted the title of Honorary Director. At the same meeting, Count
Arnoud de Pret Roose de Calesberg was elected Director for a three-
year term. In June 2002, Director Marcel Degroof resigned from the
Board of Directors after serving 17 years as a member.
Committees of the Board
After the General Shareholders’ Meeting on May 23, 2001, Audit,
Governance and Compensation Committees were established by the
Board of Directors.
Audit Committee
The Audit Committee, which is composed solely 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 its oversight respon-
sibility by reviewing financial information provided by Delhaize
Group to shareholders and others and by reviewing Delhaize Group’s
auditing, accounting and financial processes generally. 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 independence of the
Statutory Auditor and the internal audit department. In 2002, the
Audit Committee met seven times.
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 each of its members. The Governance Committee oversees
planning for the succession of the Chief Executive Officer, evaluates
his or her performance and recommends to the Board the selection or
replacement, if necessary, of the Chief Executive Officer. The
Governance Committee met two times in 2002.
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. In 2002, the
Compensation Committee met five times.
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 the
meeting mentions the items on the agenda and complies with the form
and timing requirements of Belgian law. Among the items included in
the agenda given in the notice of the annual General Meeting 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
The Chief Executive Officer is in charge of the day-to-day manage-
ment of the Company with the assistance of the Executive
Committee. 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 busi-
ness performance of the Company. In 2002, the Office of the CEO
merged into the Executive Committee.
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.
Acommon 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. Compensation consists of
fixed and variable elements and is linked to the performance of
Delhaize Group. Like a very large segment of management, the exec-
utives also benefit from stock option plans.
For the year ended December 31, 2002, the aggregate amount of base
salary, bonus payments and other direct cash compensation attributed
by Delhaize Group and its subsidiaries to the members of the
Executive Committee as a group for services in all executive capacities
was EUR 17.0 million. Excluding the cost related to the management
change at Delhaize America (see page 67), the aggregate amount of
compensation was EUR 8.9 million, including 68% aggregate base pay
and 32% variable compensation, compared to EUR 6.7 million in
2001, the increase being due to the appointment of two new members
in 2002 and the recording of a full-year compensation of one member
in 2002 compared to the recording of four months in 2001. Restricted