Unilever 2011 Annual Report Download - page 58

55
2011 Summary Remuneration (unaudited)
The table below summarises total remuneration paid to Executive
Directors for 2011.
Remuneration paid in 2011
Element CEO
(£ ‘000)
CFO
(£ ‘000)
Base Salary 920 680
Allowances and benefits1156 269
Annual Bonus21,242 612
GSIP performance shares32,303 –
GSIP restricted shares4951 812
Pension5316 124
Total Remuneration paid 5,888 2,497
1 For the CEO, this includes an allowance in lieu of company car, an
entertaining allowance, medical insurance, private use of chauffeur-driven
car, tax return preparation and payment to protect him against the
difference between the employee social security obligations in his country
of residence versus the UK.
For the CFO this includes an allowance in lieu of company car, an
entertaining allowance, an annual housing allowance, medical insurance,
tax return preparation, private use of chauffeur-driven car and an annual
education allowance he is entitled to per child of school age.
2 Bonus paid in 2012 based on performance in the year ended 31 December
2011.
3 GSIP awards vesting in the year based on performance in the three-year
period to 31 December 2010.
4 Restricted awards vesting in the year. These were one-off awards made to
Executive Directors under the GSIP on appointment.
5 Including the cost of death in service benefits and the cost of pension
administration.
Amounts have been translated into euros using the average
exchange rate over the year: €1 = £0.8692.
Proposed changes from 2012 onwards
Base salary
In last year’s Directors’ Remuneration Report we communicated
that during the course of 2011 the Committee would be taking a
closer look at the competitive positioning of our Executive
Directors’ salaries. The Committee undertook such a review
during the year and approved the following annual salary
increases in respect of 2012:
• 6% to £975,200 for the CEO;
• 5% to £714,000 for the CFO.
However, the Committee is mindful of the difficult and uncertain
economic circumstances prevailing at this time. Consequently,
the implementation of these salary increases will be deferred
until such later time as the Committee consider it appropriate.
When and if these salary increases are implemented, they will not
be backdated; salaries will be paid at the higher level only from
the implementation date onwards. The Committee will use the
higher approved salary levels (£975,200 for the CEO and £714,200
for the CFO) as the respective base points for calculating 2012
incentive payments.
These salary increases are in line with the salary increases that
have been awarded to other high-performing UK/European
employees at Unilever.
The Committee will continue to keep the positioning of base
salaries under review, particularly for the CEO, whose current
salary is positioned at the lower end of market practice compared
to similar sized UK and European companies. The Committee will
therefore look to make further increases, as appropriate, to
address this over the next few years.
Fixed pension and benefit allowance
In order to simplify the provision of benefits and increase
transparency, from 2012 the current benefit and pension provision
will be replaced by a fixed cash allowance of £250,000 for the CEO
and £340,000 for the CFO. This consolidated allowance reflects
the approach taken during 2011 for other senior executives at
Unilever. The level of fixed allowance provided to the CFO will be
reduced over the next four years to reflect the phasing out of his
annual housing allowance to nil in 2015. His fixed allowance will
therefore be reduced to £220,000 in 2015.
In addition Unilever will continue to provide death, disability and
medical insurance cover for Executive Directors. Unilever will
also continue to pay social security obligations in the CEO’s
country of residence and maintain the CEO’s hiring in agreement
of a conditional supplemental pension accrual, which will be
capped from 2012 onwards at 12% of the lower of actual salary or
current salary plus 3% pa. Accordingly, the cap for this accrual
has been set at £947,600 for 2012.
Annual bonus
There will be no change to the annual bonus opportunity for 2012.
The target opportunity for the CEO will remain at 120% of salary
with the maximum opportunity being 200% of salary. This level of
bonus will only be paid for exceptional performance. The target
opportunity for the CFO will continue to be 100% of salary with the
opportunity to earn 150% of salary for exceptional performance.
The performance conditions for 2012 will be the same as for 2011
as outlined on page 52.
GSIP
For 2012 the target level of GSIP award for the CEO will be 200% of
salary (190% for 2011). This level of award is within the limits
previously approved by shareholders. The target GSIP award for
the CFO will be 175% of salary (178% for 2011).
Executive Directors will continue to be able to earn between 0 and
2 times the target award depending on performance. The
performance conditions for 2012 are outlined on page 52.
The Committee intends to keep the annual bonus and GSIP
opportunities for the CEO at the current levels at least until 2014.
Unilever Annual Report and Accounts 2011
Report of the Directors Governance