Food Lion 2014 Annual Report Download - page 60

GOVERNANCE
REMUNERATION
REPORT
Executive Compensation
Philosophy
The Delhaize Group Remuneration Report is
intended to provide its shareholders and 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 finan-
cial metrics and (ii) individual goals that are
designed to improve our financial perfor-
mance and to ensure sustainable 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 infor-
mation on the following topics:
• 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;
• Main contractual terms of hiring and termi-
nation of Executive Management;
• Overview of Director remuneration.
The term “Executive Management” includes
the individuals who are members of the Del-
haize Group Executive Committee.
Changes in the Executive
Committee of Delhaize Group
In 2014, Delhaize Group announced the fol-
lowing changes in the Executive Committee:
1) The departure of Mr. Nicolas Hollanders,
Executive Vice President HR, IT and Sustaina-
bility effective March 13, 2014.
2) The appointment of Mr. Dirk Van den
Berghe, CEO Delhaize Belgium and Luxem-
bourg to the Executive Committee effective
April 1, 2014.
3) The appointment of Mr. Marc Croonen,
Executive Vice President HR, Internal
Communications and Sustainability to the
Executive Committee effective May 1, 2014.
4) The appointment of Mr. Kevin Holt to the
Executive Committee as CEO Delhaize
America effective July 7, 2014.
5) The departure of Mr. Dirk Van den Berghe,
CEO Delhaize Belgium and Luxembourg
effective August 1, 2014.
6) The departure of Ms. Maura Abeln Smith,
Executive Vice President, General Counsel
and General Secretary for Delhaize Group
effective November 1, 2014.
The related compensation arrangements are
discussed below.
Delhaize Group’s
Remuneration Policy
The Board of Directors of Delhaize Group
(“the Board”) determines the remuneration
of directors and the members of Executive
Management, based on recommendations
of the Board’s Remuneration Committee (the
“Committee” or “RC”). The Board has adopted
a Remuneration Policy that sets forth the prin-
ciples 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 Remu-
neration Policy, the compensation of Executive
Management is designed to:
• Attract, motivate and retain talented and
high-potential executives;
• Promote the achievement of Board-ap-
proved performance targets that are aligned
with building shareholder value over the
short, medium and long-term; and
• Recognize and reward both 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 Compa-
ny’s Corporate Governance Charter.
The Company’s Remuneration Policy reflects its
desire to reward individual and Company per-
formance 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 tar-
gets 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 com-
pensation 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 long-term
incentive award. These elements are collec-
tively referred to as “total direct compensation.”
In determining the compensation of Executive
Management, the Committee considers the
compensation paid to executives in compara-
ble positions at other companies, and relies on
data and analysis provided to the Committee
by an external compensation consultant. The
objective is to establish target compensation
levels that, as a general rule, are at or around
the median market level. The reference
companies include comparable retailers in
Europe and the United States, as well as other
comparably-sized companies in both Europe
and the United States, where benchmarking
more broadly is appropriate for the position of
an executive. This market-based information,
together with the experience and scope of
responsibilities are taken into account, along
with internal equity factors, to determine each
executive’s target total direct compensation.
The variable performance-based components
of the total compensation package are the most
significant portion of total direct compensation.