Food Lion 2013 Annual Report Download - page 56

Executive Compensation Philosophy
The Delhaize Group Remuneration Report is intended to provide its
shareholders and all other stakeholders with consistent and transparent
information on executive compensation. The Delhaize Group executive
compensation program is designed to attract, retain and motivate our
leaders to deliver Company performance that builds long-term share-
holder value. To achieve these objectives, our program is designed
around one guiding principle, “Pay for Performance,” which is discussed
in more detail below.
Pay for performance: Delhaize Group rewards achievement of
(i) Board-approved financial metrics and (ii) individual goals that are
designed to improve our financial performance and to ensure sustaina-
ble long-term profitability, consistent with our Company values.
Delhaize Group believes that an executive’s compensation should be
specifically tied to Company and individual performance.
In this remuneration report, we include information on the following topics:
• Recent changes in the Executive Committee of Delhaize Group;
• Delhaize Group’s Remuneration Policy;
• Executive Compensation roles and analysis;
• Executive Management compensation;
• Executive Committee Share ownership guidelines and
• Overview of Director Remuneration.
The term “Executive Management” refers to the individuals who are
members of the Delhaize Group Executive Committee, and certain other
senior executive as determined by the Company’s Board of Directors
from time to time.
Recent Changes in the Executive Committee
of Delhaize Group
In 2013 Delhaize Group underwent a significant transition in its leadership.
The Board of Directors of Delhaize Group announced in May 2013 the
retirement of Delhaize Group’s Chief Executive Officer, Baron Beckers-Vieu-
jant, and after a careful assessment of the Company’s performance and
strategy, developed criteria to guide its search process for a new CEO. On
September 4, 2013, the Board of Directors announced the appointment of
Mr. Frans Muller as the Company’s CEO, effective as of November 8, 2013.
Following the announcement of Baron Beckers-Vieujant’s successor, the
Company announced the departures of two members of the Execu-
tive Committee, Mr. Roland Smith and Mr. Stéfan Descheemaeker. In
addition, one long-standing member of the Executive Committee, the
Company’s General Counsel, Mr. Michael Waller, also retired and a new
General Counsel, Ms. Maura Smith, was appointed to the Executive
Committee. The compensation arrangements related to these individu-
als are discussed below.
During this period of transition, the Board of Directors determined that
the Company and its shareholders would be best served by taking
steps to ensure a period of management stability, including making
certain changes to its available compensation program conducting
a holistic review of the Company’s executive compensation program.
These steps are summarized below.
Delhaize Group’s Remuneration Policy
The Board of Directors of Delhaize Group determines the remunera-
tion of directors and the members of Executive Management, based
on recommendations of the Board’s Remuneration and Nomination
Committee (the “Committee” or “RNC”). The Board has adopted a Remu-
neration Policy that sets forth the principles that guide the Committee
and the Board in its decision-making regarding compensation matters.
The Board updates its Remuneration Policy from time to time to reflect
changes in its programs or approach. As noted in the Remuneration
Policy, the compensation of Executive Management is designed to:
• attract, motivate and retain talented and high potential executives;
• promote the achievement of Board-approved performance targets
that are aligned with building shareholder value over the short,
medium and long-term; and
• recognize and reward strong individual contribution and solid team
performance.
A copy of the Remuneration Policy may be found on the Company’s
website at www.delhaizegroup.com under the Corporate Governance
tab, as an exhibit to the Company’s Corporate Governance Charter.
The Company’s Remuneration Policy reflects its desire to reward individ-
ual and Company performance in a manner that aligns the interests of
the Company’s executives, directors and shareholders while also taking
into account market practices and the differences between the Group’s
operating companies.
As stated in its Remuneration Policy, the Board of Directors has
established financial targets for Company performance and individual
targets aligned with the Company’s strategy. Both the structure and the
amount of compensation paid to Executive Management are reviewed
on an annual basis, and the Board’s compensation decisions take into
account both Company and individual performance.
Each member of Executive Management receives compensation in the
form of an annual base salary, an annual short-term incentive award
and an annual grant of a long-term incentive award. These elements
are collectively referred to as “total direct compensation.”
In determining the compensation of Executive Management, the Com-
mittee considers the compensation paid to executives in comparable
positions at other companies, and relies on data and analysis provided
to the Committee by an external compensation consultant. The objective
REMUNERATION REPORT
54 DELHAIZE GROUP ANNUAL REPORT 2013 CORPORATE GOVERNANCE