TomTom 2011 Annual Report Download - page 36

TomTom Annual Report and Accounts 2011
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Supervisory Board Report | continued
for participation in the Remuneration Committee and the Selection
and Appointment Committee is €4,000 for members and €7,000
for the Chairman. The remuneration of Supervisory Board
members and committee members is proportional to the number
of months served. The aggregate remuneration of the Supervisory
Board members in 2011 amounted to €304,000. The individual
remuneration of the Supervisory Board members is refl ected in
note 7 of our consolidated fi nancial statements.
Remuneration Committee
—
The Remuneration Committee met fi ve times during 2011. All
members were present at each meeting. Each of these meetings
was also attended by a member of the Management Board and
the VP Compensation and Benefi ts. Preparation meetings between
the Chairman of the committee, VP Compensation and Benefi ts
and the Company Secretary were held prior to each committee
meeting.
The Committee monitored the effectiveness and relevance of
TomTom’s Management Board Remuneration Policy throughout
the year, as well as the extent to which the individual
remuneration packages of the Management Board members
were in line with this policy. In addition, a scenario analysis within
the terms of the best practice provision II.2.1 of the Code was
performed on the variable remuneration components of these
remuneration packages.
In addition, the Committee reviewed whether the key
performance indicators (the ‘KPIs’) that had been set for the
variable remuneration components were in line with market
practice and appropriate with a view to the company’s strategy.
A benchmarking on the total cash component of these
Management Board packages was performed in October.
Other areas of attention which were addressed by the Committee
were:
– the 2011 conditional grant of stock options to Management
Board members under the TomTom Management Board Stock
Option Plan 2009;
– the outcome of the Remuneration Committee’s self-
assessment.
Remuneration report
—
Remuneration policy
The company’s Articles of Association state that the Supervisory
Board shall propose, and the General Meeting of Shareholders
shall adopt, the Remuneration Policy for the members of the
Management Board. The Supervisory Board determines the
remuneration of individual members of the Management Board
within the limits of the Remuneration Policy and reviews this policy
regularly in light of internal and/or external developments. At the
start of 2011 the Supervisory Board decided to continue to apply
the Remuneration Policy with the exception of the vesting timeline
applicable to the options granted to the Management Board
under the long-term incentive scheme (see for further details
under section 3 of this Remuneration Report). The full text of
the policy can be found on the TomTom website.
The objective of the company’s Remuneration Policy is to
ensure that the company rewards its Management Board in
such a way that highly qualifi ed and expert executives are
recruited and retained, and to ensure that the Management
Board members’ remuneration is consistent with the company’s
strategy, its operational and fi nancial results and delivery of value
to shareholders. Furthermore, the policy is aimed at applying a
responsible and sustainable remuneration framework in line with
the general result-driven remuneration principles and practices
throughout the company. Our Remuneration Policy establishes
that remuneration for the Management Board shall consist of four
components: base salary, short-term incentive, long-term incentive
and pension.
Application in 2011
The details of the individual remuneration of all members of the
Management Board and the costs thereof to the company, as well
as the information described in best practice provision II.2.13 (d)
of the Code are presented in note 7 to the consolidated fi nancial
statements.
1. Base salary at median market level
Fixed remuneration consists of base salary plus 8% holiday
allowance, where applicable and is aimed at the median
of the pay practice for comparable positions in Dutch
listed companies. Base salary levels that are not in line with
median market practice shall be aligned with these levels
in a measured way. Annually, the base salary levels shall be
reviewed, taking into account developments in the pay market
and the job size as graded within the company.
In 2011 the base salary of the Management Board was
benchmarked against a peer group consisting of 70 Dutch
companies with a two-tier board structure, the majority of
which were AEX and AMX listed. Among these companies
were Aegon, Ahold, AkzoNobel, ASML, Heineken, KPN, NXP,
Philips, TNT, Unilever and Wolters Kluwer. On the basis of
this information, the Supervisory Board concluded that the
base salary of Harold Goddijn should be brought in line with
median market level, while those of Marina Wyatt and Alain
De Taeye were in line with the median market level and did
not need adjustment for 2011. The Supervisory Board further
decided to increase the CEO’s base salary to €375,000 in order
to bring it closer to the median market level.