Food Lion 2008 Annual Report Download - page 55
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Delhaize Group Our Strategy
Our Activities in 2008
Corporate Governance
Risk Factors
Financial Statements Shareholder Information
at a Glance
Base Salary (in millions of EUR)
CEO
Other Members of Executive Management
2006 2007 2008
3.3
3.3
2.9
0.9
0.9
0.9
Variable Compensation paid to Other Mem-
bers of Executive Management (in millions of EUR)
1.3 0.8
1.8 1.6
1.8 1.0
2006 2007 2008
LTI - Performance Cash Grants
Annual Bonus
The following graphs illustrate the split of the
variable remuneration paid per component
for the CEO and other members of Executive
Management.
Base Salary
Base salary is a key component of the
compensation package, both on its own and
because annual target awards and long-
term incentive awards are denominated as
percentages of base salary.
Base salaries are established and adjusted
as a result of an annual review process. This
review process considers market practices.
During 2008, the RNC benchmarked against
general industry trends as well as against
other retail and fast moving consumer goods
companies. Where appropriate, the RNC
considers either specific European or U.S.
benchmarking tools.
The following table summarizes base salary
paid to the CEO and the other members of
Executive Management for the period 2006-
2008.
percentage of the annual base salary of the
individual for that year. The annual bonus
effectively paid is based on the performance
against Board approved targets for Profit
before Tax (“PBT”).
Delhaize Group uses a scale to correlate
actual performance with target performance
to determine the bonus payment. For
the 2008 payment, 80% of the target
performance level needed to be reached in
order to receive a bonus payment equal to
50% of the target bonus payment. The bonus
payment levels increase as performance
exceeds 80% of the target performance level.
If performance reaches or exceeds 110% of
the target performance level, the bonus
payment will equal 125% of the target bonus
payment, which represents the maximum
payment level. If the actual performance does
not reach 80% of the target performance
level, the payment of a bonus is entirely at
the discretion of the Board of Directors upon
recommendation of the RNC. The following
graph illustrates how this scale works.
Variable Compensation paid to the CEO
by Component (in millions of EUR)
2006 2007 2008
0.30.5
0.50.7
0.40.7
LTI - Performance Cash Grants
Annual Bonus
Bonus Payout (in %)
Funding Percent
Percent to Budget
140
120
100
80
60
40
20
0
50 60 70 80 90 100 110 120 130 140 150
The annual bonus for the CEO depends on the
results at the consolidated Group level. For the
other members of Executive Management
the annual bonus payment is correlated to
their respective responsibilities. These can be
at the consolidated Group level or at a level
that is a mix of operating companies, regions
and the consolidated Group level.
The table on page 52 shows an overview of
the Annual Bonus amounts paid during 2008,
2007 and 2006 (based on the performance
of the year before).
Base Salary
(1)
(in millions of EUR)
CEO
Others Members of
Executive Management
(2)
Number of
persons
Payout
2008
0.9 72.9
2007
0.9 93.3
2006
0.9 83.3
(1) Amounts are gross amounts before deduction of withholding taxes and
social security levy. They do not include the compensation of the CEO as
director of the Company.
(2) For 2007 these numbers include the pro-rata share of compensation of
Arthur Goethals and Joyce Wilson-Sanford who retired from their Execu-
tive positions on June 30, 2007 and the pro-rata share of compensation
of Nicolas Hollanders appointed on February 26, 2007.
For 2008 they include the pro-rata share of compensation of Craig
Owens who left the Company on September 30, 2008 and is replaced by
Stéfan Descheemaeker who started in January 2009.
Annual Bonus
The annual bonus rewards short-term
performance of the Executive Management.
The annual bonus is a cash award for
achieving performance goals related
to the individual and the Company. The
annual bonus is a variable part of executive
compensation.
Annual Bonus (in millions of EUR)
2006 2007 2008
CEO
Other Members of Executive Management
1.3
1.8
1.8
0.5
0.7
0.7
The annual bonus paid in a year is a reflection
of performance during the previous year
against Board approved targets. The target
bonus for the current year is expressed as a