Unilever 2008 Annual Report Download - page 64

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Unilever Annual Report and Accounts 2008 61
Report of the Directors
Report of the Remuneration Committee continued
Role and responsibilities
The Committee is responsible for making proposals to the Boards on the reward policy for Executive Directors and other Unilever
Executive Team members, to ensure that the right incentives are provided to encourage managers to enhance the performance of the
Group. The Committee is also responsible for setting individual reward packages for the Executive Directors and for monitoring and
approving all share-based incentive arrangements. The Committee meets at least three times a year and during 2008 met on five
occasions.
Structure and role
During 2008 David Simon served as Chairman of the Committee with Jeroen van der Veer and Michael Treschow being members
of the Committee. The Board evaluated the performance of the Committee and the Committee carried out a self-assessment of its
performance.
Advice and assistance
The Committee does not formally retain remuneration consultants. It seeks professional advice from external advisers as and when
required. During 2008, the Committee sought advice from Towers Perrin (an independent firm of human resources specialists) on
market data, reward trends and performance-related pay. Towers Perrin also provides general consultancy advice to Unilever group
companies on employee rewards, pension, communications and other human resource matters.
The Group Secretary attends all Committee meetings and advises on matters of corporate governance.
The Chief Executive Officer is invited to attend Committee meetings to provide his own insights to the Committee on business
objectives and the individual performance of his direct reports. Also, the Chief Human Resource Officer can be invited to provide his
expertise to the Committee. Naturally, neither attends when their own remuneration is being discussed.
Remuneration policy
Unilever reward policy table 2008
Element Payment vehicle Value determination Plan objectives/Key drivers
FIXED
Base salary Cash Market median Attraction and retention of high performing
executives
Pension Cash All-employee pension arrangement Attraction and retention of high performing
in home country 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
Shares (25%) Chief Financial Officer: target 93% primary internal measure of economic value
(range 0% – 160%) added – see page 62) and top-line growth targets
Chief Executive Officer: target 113.3%
(range of 0% – 200%) Individual responsibility for key Unilever business
targets
Global Share Shares Grant level in 2008 for: Total shareholder return at upper half of peer group
Incentive Plan Chief Financial Officer 340% (see page 62)
Chief Executive Officer around 170%
Ungeared Free Cash Flow as the basic driver of
Vesting level: 0% – 200% of grant, at end of Unilever’s shareholder returns
3 year performance period subject to the
satisfaction of the performance conditions. Top-line revenue growth as essential to Unilever’s
long-term value creation
Share Matching Shares 25% of annual incentive is paid in shares, Alignment with shareholders’ interests
Plan these shares are matched one for one