Food Lion 2012 Annual Report Download - page 52

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GOVERNANCE
Remuneration report
Delhaize Group wants to provide its
shareholders and all other stake-
holders with consistent and trans-
parent information on executive
compensation.
In this remuneration report we
include information on the following
topics:
•฀฀The remuneration policy applied
during 2012;
•฀฀The role and involvement of vari-
ous parties in executive compen-
sation analysis and the related
decision-making processes;
•฀฀Director remuneration;
•฀฀Executive Management compen-
sation; and
•฀฀Share ownership guidelines.
Remuneration Policy applied
during 2012
During the reported year, the Com-
pany applied the remuneration pol-
icy for directors and Executive Man-
agement as it is displayed 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
performance. Accordingly, Delhaize
Group’s remuneration policy is
designed to provide incentives so
that the Company can attract and
retain talented directors and execu-
tives in order to deliver strong growth
and high returns for shareholders.
The policy’s goal is to reward indi-
vidual and Company performance
in a manner that aligns the interests
of the Company’s executives, direc-
tors and shareholders while also
taking into account market prac-
tices and the differences between
the Group’s operating companies.
Delhaize Group has consistently
applied this policy in the past years.
As of March 6, 2013 Delhaize Group
does not intend to substantially alter
the Remuneration Policy in the com-
ing two years with the exception of
what is mentioned hereunder under
the Short and Long Term Incentive
chapter. Delhaize Group also plans a
thorough analysis of its senior execu-
tive compensation plan in 2013 to
ensure that the design of the differ-
ent programs and components of the
Remuneration Policy are supporting
the Company strategy and remain
aligned with market practices.
Role and Involvement of Various
Parties in Executive Compensation
Analysis and Decisions
Role of the Remuneration &
Nomination Committee (RNC)
The composition and activities of the
RNC are discussed on page 41.
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.
These compensation recommenda-
tions take the results of the annual
performance review for each execu-
tive into account. The Company’s
Executive Vice President for Human
Resources assists the Chief Execu-
tive Officer in this process.
Role of Outside Compensation
Consultant
During 2012, and as in previous
years, the Company hired an inde-
pendent compensation consultant
to assist the RNC in its understanding
and review of market practices. This
consultant worked with Company
management to obtain background
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, which is not to
exceed the maximum 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 compensation for their
positions as directors, an amount of
up to €80 000 per year per director,
and (ii) to the Chairman of the Board,
an amount up to €160 000 per year.
The above-mentioned amounts are
increased by an amount of up to
€10 000 per year for each member of
any standing committee of the Board
(other than the chair of the commit-
tee), and increased by an amount of
up to €15 000 per year for the Chair-
man of any standing committee of
the Board. Non-Executive Directors
do not receive any remuneration,
benefits, equity-linked consideration
or other incentives from the Company
other than their remuneration for their
service as Director of the Company.
For some non-Belgian Board mem-
bers, 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 personal loan
to or for any member of the Board.
Individual director remuneration for
the fiscal years 2012, 2011 and 2010
is presented in the table on page 49
All amounts presented are gross
amounts before deduction of with-
holding tax.
Executive Management
Compensation
The term “Executive Management”
refers to the individuals who are
members of the Delhaize Group
Executive Committee.
Delhaize Group’s Remuneration Pol-
icy is tailored to emphasize the deliv-
ery of strong annual earnings growth
as well as sustained increases in
shareholder value over the long term.
Short-term performance is rewarded
in cash while long-term performance
is rewarded through a combination of
cash and equity-based instruments.
In the following paragraphs, we out-
line in detail the different components
of Executive Management compen-
sation and illustrate its evolution over
time.
The executive compensation pack-
age includes the following compo-
nents:
•฀฀Base salary;
•฀฀Annual bonus;
•฀฀Long-term incentives (“LTI”); and
•฀฀Other benefits, retirement and
post-employment benefits.