Food Lion 2011 Annual Report Download - page 50

Remuneration Report
Delhaize Group wants to provide its
shareholders and all other stakeholders
with consistent and transparent infor-
mation on executive compensation.
In this remuneration report we include
information on the following topics:
•฀฀The remuneration policy applied dur-
ing 2011;
•฀฀The role and involvement of various
parties in executive compensation
analysis and the related decision-
making processes;
•฀฀Director remuneration;
•฀฀Executive Management compensa-
tion; and
•฀฀Share ownership guidelines.
Remuneration Policy applied during 2011
During the reported year, the Com-
pany applied the remuneration policy
for directors and Executive Manage-
ment as it can be found in Exhibit E of
the Corporate Governance Charter
posted on the Company’s website at
www.delhaizegroup.com.
Delhaize Group strongly believes in
rewarding talent, experience and per-
formance. Accordingly, Delhaize Group’s
remuneration policy is designed to
provide incentives for delivering strong
growth and high returns for sharehold-
ers so that we can attract and retain tal-
ented directors and executives.
The policy’s goal is to reward individual
and Company performance in a man-
ner that aligns the interests of the Com-
pany’s executives, directors and share-
holders while also taking into account
market practices and the differences
between the Group’s operating compa-
nies. Delhaize Group has consistently
applied this policy in the past years.
The Remuneration Policy was amended
in 2011 to reflect the decision of the
shareholders’ meeting of May 26, 2011
to increase the maximum compensa-
tion for service on a standing commit-
tee of the Board, and the possibility for
the Chairman of the Board to receive
compensation for service on a standing
committee of the Board.
As of March 7, 2012 Management does
not intend to substantially alter the
Remuneration Policy in the coming two
years with the exception of the imple-
mentation in 2012 of a new Short Term
Incentive Program (Annual Bonus) that
will become applicable to the Directors,
Vice Presidents, Senior Vice Presidents,
Executive Vice Presidents and CEO of the
Company.(for more details see below)
Role and Involvement of Various Parties
in Executive Compensation Analysis and
Decisions
Role of the RNC
The composition and activities of the
RNC are discussed on page 39.
Role of Executive Officers in Executive
Compensation Decisions
The Company’s Chief Executive Officer
makes recommendations concerning
compensation for all senior executives,
and presents those recommendations to
the RNC. The compensation recommen-
dations take the results of the annual
performance review for each executive
into account. The Company’s Executive
Vice President for Human Resources
assists the Chief Executive Officer in this
process.
Role of Outside Compensation
Consultant
During 2011, and as in years before, the
Company hired an independent com-
pensation consultant to assist the RNC in
its understanding and review of market
practices. This consultant worked with
Company management to obtain back-
ground information and related support
in formulating recommendations.
Director Remuneration
The Company’s directors are remu-
nerated for their services with a fixed
annual amount, decided by the Board of
Directors, and not to exceed the maxi-
mum amounts set by the Company’s
shareholders. The maximum amount
approved by the shareholders at the
Ordinary General Meeting of May 26,
2011 is (i) to the directors as compensa-
tion for their positions as directors, an
amount of up to EUR 80 000 per year per
director, and (ii) to the Chairman of the
Board, an amount up to EUR 160 000 per
year. The above-mentioned amounts
are increased by an amount of up to
EUR 10 000 per year for each member
of any standing committee of the Board
(other than the chair of the committee),
and increased by an amount of up to
EUR 15 000 per year for the Chairman
of any standing committee of the Board.
Directors do not receive any remunera-
tion, benefits, equity-linked considera-
tion or other incentives from the Com-
pany other than their remuneration for
their service as Director of the Company.
For some non-Belgian Board members,
the Company pays a portion of the
cost of preparing the Belgian and U.S.
tax returns for such directors. Delhaize
Group has not extended credit, arranged
for the extension of credit or renewed an
extension of credit in the form of a per-
sonal loan to or for any member of the
Board.
Individual director remuneration for
the fiscal years 2011, 2010 and 2009 is
presented in the table on page 49. All
amounts presented are gross amounts
before deduction of withholding tax.
Executive Management Compensation
The term “Executive Management” refers
to the individuals who are members of
the Delhaize Group Executive Commit-
tee.
Delhaize Group’s Remuneration Policy
is tailored to emphasize the delivery of
strong annual earnings growth as well
as sustained increases in shareholder
value in the long term. Short-term per-
formance is rewarded in cash while
long-term performance is rewarded
through a combination of cash and
equity-based instruments. In the follow-
ing paragraphs, we outline in detail the
different components of Executive Man-
agement compensation and illustrate its
evolution over time.
The executive compensation package
includes the following components:
•฀Base salary;
•฀Annual bonus;
•฀Long-term incentives (“LTI”); and
48 // DELHAIZE GROUP ANNUAL REPORT ‘11
CORPORATE GOVERNANCE