Unilever 1999 Annual Report Download - page 40

Unilever Group Directors’ remuneration and interests
Report to the shareholders (continued)
Service contracts
NV and PLC’s Articles of Association require that at every Annual General Meeting all the directors shall retire from office. All directors’
contracts of service with the Unilever Group are generally terminated no later than the end of the month in which the Annual
General Meeting next before or after the director’s 62nd birthday occurs.
Contracts are currently determinable by the employer at not less than two years’ notice. Formerly, contracts were determinable by
the employer at not less than three years’ notice. The Remuneration Committee believes that this change for existing directors has
brought their service contracts into line with the arrangements for the existing directors of many peer group companies. The Committee
has noted the recommendation in the Combined Code in favour of one year contracts but continues to be concerned to have regard to
best practice, as well as legal entitlements upon termination, in both the Netherlands and the United Kingdom. Developments in both
countries are kept under regular review with respect to existing directors and new appointments.
The compensation payable to a director upon the termination of his service contract will be calculated in accordance with the law
applicable. The directors have service contracts with both NV and PLC. The Remuneration Committee’s aim is always to deal fairly with
cases of termination whilst taking a robust line in minimising any such compensation. The Remuneration Committee has given due
consideration to the recommendations contained in the Combined Code regarding the merits of providing explicitly in the directors’
contracts of service provisions relating to compensation commitments in the event of early termination. However the companies have to
take account of the law in the Netherlands that provides that, irrespective of what the service contract may say, the termination of
employment for a reason other than misconduct or negligence entitles a long serving employee to compensation comparable to at least
two year’s remuneration. The Committee will continue to keep its current practice under review.
In 1999 three directors served for only part of the year. In 1998 two directors served for only part of the year.
Advisory Directors
The Advisory Directors are not formally members of the Boards of NV and PLC and are therefore excluded when reference is made to
directors in the preceding text.
The remuneration of the Advisory Directors is decided by the Boards. Advisory Directors receive an annual fee and are reimbursed
expenses incurred in attending meetings. They do not receive any performance related bonuses, pension provisions, share options
or other forms of benefit.
The annual fee paid in 1999 to each of B Collomb, O Fanjul, FH Fentener van Vlissingen, H Kopper and HOCR Ruding was Fl. 80 000
and to each of Sir Derek Birkin, Lady Chalker of Wallasey, C X Gonzalez and Senator GJ Mitchell was £27 500. Sir Brian Hayes and Lord
Wright of Richmond retired during the year and each received fees of £9 424.
At the end of 1999 the aggregate interests of the Advisory Directors in the share capital of NV and PLC were 8 479 (1998: 8 375)
ordinary shares of NV and 1 785 (1998: 4 000) ordinary shares of PLC.
40 Unilever Annual Accounts 1999