Unilever 2003 Annual Report Download - page 57

Remuneration report – policy
Introduction
This report of the Remuneration Committee sets out Unilever’s
current policy on Directors’ remuneration and so far as
practicable, the policy for subsequent years. It also contains
full details of the 2003 remuneration of the Directors and
Advisory Directors.
The report, which is set out on pages 54 to 68, is divided into
two parts. The first part contains a commentary on Directors’
remuneration, while the second part contains the detailed
financial information for 2003.
The Boards have approved this report and it has been signed
on their behalf by the Joint Secretaries of Unilever. It will be
presented to shareholders at the Annual General Meetings
on 12 May 2004.
Remuneration commentary
Introductory remarks of the Remuneration Committee
Dear Shareholder,
We should like to make some introductory remarks about the
annual Directors' Remuneration Report for 2003.
Our philosophy
Our remuneration philosophy remains that of attracting,
motivating and retaining the highest calibre of business
executives. We ensure that all elements of Directors’
remuneration are carefully benchmarked in the market. The
Directors are also required to build up a personal shareholding
in Unilever in order to link their personal interests with those of
other shareholders.
We believe this approach is essential to the successful leadership
and effective management of Unilever as a major global
company.
Rewards based on performance
The current Directors’ package dates from 2001 when, following
shareholder approval, various changes were introduced. Among
these was the introduction of the TSR based Long-Term Incentive
Plan and the increase of the annual bonus to a maximum of
100% of base salary. The package was designed to support
enhanced shareholder value during the period to 2004, as set
out in the ‘Path to Growth’ strategy.
The package is linked to clear measures of performance. In this
way, when results are outstanding, the variable elements can
form a significant part of the total remuneration package.
Equally important, this ensures that indifferent or unsatisfactory
performance is not rewarded. This approach delivers appropriate
rewards for outstanding performers who create outstanding value
for shareholders. It is also consistent with the performance-related
remuneration culture in place across the Unilever Group.
The bonus payable in respect of 2003 is substantially less than the
bonus paid for 2002 because the business results for 2003 were
below expectations, particularly with regard to the growth in
leading brands.
Our commitment
Our continuing commitment is to link Directors’ pay with
performance. We are focused on achieving business goals,
rewarding outstanding performance and retaining the best talent.
Looking ahead
The Committee keeps the Directors’ package under constant
review to ensure it remains in line with the European market.
We strive to ensure that the package continues to deliver the
best possible value for shareholders.
Bertrand Collomb, Chairman
David Simon
Jeroen van der Veer
54 Unilever Annual Report & Accounts and Form 20-F 2003