Unilever 2007 Annual Report Download - page 52

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50 Unilever Annual Report and Accounts 2007
Report of the Directors continued
Remuneration policy
Unilever reward policy table 2007
Element Payment vehicle Value determination Plan objectives/Key drivers
FIXED
Base salary Cash Market median Attraction and retention of high performing
executives
Pension Cash Directors stay in their home country pension fund Attraction and retention of high performing
or an alternative of similar value executives
Bonus not pensionable
VARIABLE Indicative levels at face value as % of base pay
Annual incentive Cash (75%) Executive Directors: target 87% (range 0% – 150%) Delivery of trading contribution (Unilever’s
Group Chief Executive: target 113% primary internal measure of economic value
Shares (25%) (range of 0% – 200%) added – see page 51) and top-line growth targets
Individual responsibility for key Unilever business
objectives
Global Share Shares Grant level for Executive Directors: up to 120% Shareholder return at upper half of peer group
Incentive Plan in 2007 (from 2008 onwards up to 180% (see page 51)
is allowable)
Top-line revenue growth as essential to Unilever’s
Grant level for Group Chief Executive: up to 135% long-term value creation
(from 2008 onwards up to 200% is allowable)
Ungeared Free Cash Flow as the basic driver of
In exceptional circumstances the committee may Unilever’s shareholder returns
exceed the limits
Vesting level: 0% – 200% of grant
Share Matching Shares 25% of annual incentive is paid in shares, Alignment with shareholders’ interests
Plan these shares are matched one for one
A significant proportion of the Executive Directors’ total reward
is linked to a number of key measures of Group performance
to create alignment with strategy, business priorities, and
shareholder value.
The total remuneration package for Executive Directors is
intended to be competitive in a global market, with a strong
emphasis on performance related pay.
Internal and external comparisons are made with the reward
arrangements for other senior executives within Unilever to
support consistent application of Unilever’s executive reward
policies.
In setting targets for the performance measures, the Committee
is guided by what would be required to deliver top third
shareholder value. This is reflected in both the short-term and
long-term performance targets.
Report of the Remuneration Committee continued