Unilever 2007 Annual Report Download - page 59

Unilever Annual Report and Accounts 2007 57
Report of the Directors continued
Report of the Remuneration Committee continued
Comments on pensions
The Netherlands all-employee pension plan benefit basis was changed from final salary to career average earnings at 31 December
2006. This had a small impact on the accrued pension of the Netherlands-based Executive Director.
During 2007, individual contributions paid by Executive Directors in the UK were paid through a salary sacrifice arrangement.
Executive Directors’ pensions(a)
Pension values for the year ended 31 December 2007 are set out below.
Movement
Movement in Transfer in transfer Transfer
accrued value of value during Individual value of
Accrued pension Accrued accrued 2007 (less contributions accrued
pension at during pension at pension at individual made during pension at
Age at 31/12/06(b) 2007(c) 31/12/07(b) 31/12/06(d) contributions)(e) 2007(f) 31/12/07(d)
Name and base country 31/12/07 €’000 pa €’000 pa €’000 pa €’000 €’000 €’000 €’000
Patrick Cescau (UK) 59 1 000 29 1 029 18 662 1 951 4 20 617
Kees van der Graaf (g) (NL) 57 602 37 639 8 098 868 9 8 975
Ralph Kugler (UK) 51 441 (23) 418 6 283 219 – 6 502
Rudy Markham(h) (UK) 61 793 (68) 725 15 909 (1 928) – 13 981
(a) Figures have been translated into euros where necessary using the following exchange rates: 31 December 2007 €1.00 = £0.7342;
31 December 2006 €1.00 = £0.6712; Average for the year ended 31 December 2007 €1.00 = £0.6822.
(b) Based on the Executive Directors’ current pension letters and calculated on a deferred basis using the Executive Directors’ service to
31 December 2006 and 31 December 2007 respectively on the basis that the Executive Directors remain in service until at least age 60
and that the pension payment commences at that time. It includes all pensions provided from Unilever pension plans. In the event that
an Executive Director leaves service prior to age 60 and the payment of pension commences earlier than age 60, the pension payable
would be on a reduced basis.
(c) Includes the effect of inflation on the accrued pension at 31 December 2006.
(d) For the Netherlands-based Executive Director the arrangement is calculated on the basis used by the Unilever Netherlands pension plan
(‘Progress’), as prescribed by the Netherlands Ministry of Social Affairs and Employment. These prescriptions changed on 1 January 2008 as
illustrated in footnote (g). For the UK-based Executive Directors’ the arrangement is calculated on the market related basis used by Unilever
United Kingdom pension plan (UUKPF), in line with the GN11 guidance note published by the Board for Actuarial Standards in the United
Kingdom.
(e) The movement in transfer value during 2007 of market changes for the UK based Executive Directors together with additional service and
the Executive Directors being one year closer to retirement and exchange rate movements (for pensions denominated in currency other than
euros). There have been no salary increases in 2007.
(f) Consistent with employees in the current Netherlands pension plan, the rate of individual contributions paid by Kees van der Graaf is 0.5%
of pensionable salary between €11 872 and €56 990 and 1% on balance. Consistent with employees in the United Kingdom pension plan,
Ralph Kugler’s and Rudy Markham’s contributions are paid through salary sacrifice and at a rate of 5% of pensionable salary (above the UK
Lower Earnings Limit), and as such no individual contributions are shown above. Patrick Cescau’s contributions on the part of his salary paid
in the Netherlands are paid based on the basis of the old Unilever Netherlands pension plan, at 1% above €56 990, and on the part of his
salary paid in the UK are consistent with employees in the Unilever United Kingdom pension plan.
(g) The increase in accrued pension and transfer value during 2007 includes the effect of revaluation on the accrued pension in the Unilever
Netherlands pension plan at January 2008. The basis for calculation of the transfer value in the Netherlands as prescribed by the
Netherlands Ministry of Social Affairs and Employment changed for accounting periods ending after 1 January 2008. Calculated on this new
basis the transfer value at 31 December 2007 for Kees van der Graaf would be €7 951 000.
(h) Attained age 60 in 2006 and accrued no additional pension. Stepped down as a Director at the 2007 AGMs. The values shown are at 31
May 2007, or the period ending on that date, as appropriate. Schedule 7A of the UK Companies Act requires the disclosure of pension
values at retirement as he performed qualifying services during 2007. The accrued pension at 31 October 2007 (the date he retired from
Unilever) is unchanged from that shown in the table. The transfer value of the accrued pension at 31 October 2007 was €14 055 000.
The Listing Rules of the Financial Services Authority are different from the Directors’ Remuneration Report Regulations 2002 and
require the following disclosures for defined beneffit pension plans which are calculated on an alternative basis to those disclosed in
the previous table.
The Dutch Corporate Governance Code requires the disclosure of pension service costs charged to operating profit:
Dutch
Corporate
Listing rules of the Financial Services Authority Governance Code
€’000(a) €’000(b) €’000
Patrick Cescau (UK) (9) (192) 552
Kees van der Graaf (NL) 32 450 249
Ralph Kugler (UK) (1) (14) 294
Rudy Markham (UK) (31) (601) 50(c)
(a) Movement in accrued pension during 2007 (excluding the effect of inflation on the accrued pension at 31 December 2006).
(b) Transfer value at 31 December 2007 of the movement in accrued pension during 2007 (excluding the effect of inflation on the accrued
pension at 31 December 2006 and less individual contributions).
(c) This includes €28 000 that was incurred up to May 2007 when he left the Board and €22 000 that was incurred subsequently up to
31 October 2007.