Unilever 2012 Annual Report Download - page 66

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ABOUT UNILEVER GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
63Unilever Annual Report and Accounts 2012 Report of the Directors overnance
Remuneraton Polcy
Remuneraton Polcy
Supportng the delvery of our strategy through
remuneraton arrangements
Our business vision is to double the size of Unilever while
reducing our environmental footprint and increasing our positive
social impact through a focus on our brands, our operations and
our people. Remuneration is one of the key tools that we have as
a business to help us to motivate our people to achieve our goals.
A vrtuous crcle of growth
Profitable volume growth, increasing earnings and generating
returns for shareholders.
Our brands
Strong brands and innovation are central to our ambitious
growth strategy.
Our operatons
We want to reach new customers by developing innovative
products that address different consumer needs at
different price points. To do this we use our global scale
to help deliver sustainable profitable growth by seeking
to add value at every step in the value chain by enhancing
product quality and customer service, and rolling out
innovations faster across all markets.
Our people
In order to deliver our challenging business vision we need
the best people in all areas of the business. We need a
structure and performance culture that allow us to be the
best and to adapt quickly to the rapidly changing environment.
Sustanable lvng
Our business model is sustainable, equitable growth. The
USLP sets out a range of goals to improve efficiencies and
develop more sustainable ways of making our products,
opening up opportunities for innovation while improving the
livelihoods of our suppliers.
Our remuneration arrangements are designed to support
our business vision and the implementation of our strategy.
The key elements of our remuneration package for Executive
Directors are summarised below:
The package has been designed based on the following key
principles:
Payng for performance
The focus of our package is on variable pay based on annual
and long-term performance. Performance-related elements
are structured so that target levels are competitive, but
Executive Directors can only earn higher rewards if they exceed
the ongoing standards of performance that Unilever requires.
Algnng performance metrcs wth strategy
The performance metrics for our annual and long-term plans
have been selected to support our business strategy and the
ongoing enhancement of shareholder value through a focus
on increasing sales value and volume, improving margin,
growing earnings and generating returns for shareholders.
Delverng sustanable performance
Acknowledging that success is not only measured by delivering
financial returns, we also consider the quality of performance
in terms of business results and leadership, including corporate
social responsibility and progress against the USLP, when
determining rewards.
To ensure that remuneration arrangements fully support
our sustainability agenda, the personal performance goals
for the CEO under the annual bonus include USLP targets.
Algnment wth shareholder nterests
The majority of the package for our Executive Directors is
delivered in Unilever shares to ensure that the interests of
executives are aligned with shareholders’. This is further
supported by significant shareholding requirements ensuring
that a substantial portion of each Executive Directors’ personal
wealth is linked to Unilever’s share price performance.
Non-Executive Directors are also encouraged to build up their
personal holding of Unilever shares to ensure alignment with
shareholders’ interests.
Payng compettvely
The overall remuneration package offered to Executive
Directors is sufficiently competitive to attract and retain highly
experienced and talented individuals, without paying more
than is necessary.
Preventng napproprate rsk-takng
The Committee believes that Unilever’s risk management
process provides the necessary control to prevent inappropriate
risk-taking. When the Committee reviews the structure and
levels of performance-related pay for Executive Directors and
other members of the Unilever Leadership Executive (ULE),
it considers whether these might encourage behaviours that
are incompatible with the long-term interests of Unilever and
its shareholders or that may raise any environmental, social
or governance risks. Where necessary, the Committee would
take appropriate steps to address this.