Unilever 2012 Annual Report Download - page 70

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ABOUT UNILEVER GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
67Unilever Annual Report and Accounts 2012 Report of the Directors overnance
Element Purpose Operaton Opportunty Performance hanges Supportng
and lnk to metrcs made to nformaton
strategy polcy
lobal Share The SIP Awards of shares are made Target awards of The ommittee None Awards made in 2013
Incentve Plan incentivises annually with vesting conditional shares set three-year are subject to four equally
(SIP) Executive conditional on Unilever’s under the GSIP each performance weighted long-term
The key terms
of the GSIP
were approved
by shareholders
at the 2007
AGM.
Directors
to achieve
Unilever’s
clearly stated
growth ambition
by delivering
sustained high
performance
and sustainable
returns for
shareholders
over the longer
term.
performance against
long-term targets over the
next three years.
Awards under the GSIP may
be subject to ‘clawback’
in the event of a significant
downward revision of
the financial results
of the Group.
Awards under the GSIP are
subject to ‘ultimate remedy’
whereby the Committee may
adjust awards where the
result is considered unfair.
year (as a percentage
of base salary) are
limited to:
•CEO – 200%
•other Executive
Directors – 178%
The vesting range for
awards of conditional
shares is between 0%
and 200% of the grant
level. Accordingly the
maximum award of
shares under the GSIP
are (as a percentage
of base salary):
targets for each
conditional GSIP
award and may
change these for
future awards as
the Committee
considers
appropriate.
Performance
metrics are
linked to Unilever’s
clearly stated
growth ambition
and its long-term
business strategy.
performance metrics
over the three-year
period 2013-2015:
•underlying sales growth;
•core operating margin
improvement;
•cumulative operating cash
flow; and
•relative total shareholder
return.
For the three business
focused metrics, 25% of
awards vest for threshold
performance and 200% for
the GSIP (150% for the MCIP)
•CEO – 400%
•other Executive
vest for maximum
performance.
Directors – 356% Against the TSR comparator
group, comprising 19 other
companies (20 including
Unilever), 60% vests if
Unilever is ranked 10th
(which is 53rd percentile
performance against this
group), 100% vests if Unilever
is ranked 7th and 200% for
the GSIP (150% for the MCIP)
vests if Unilever is ranked
3rd or above.
Further details of the TSR
comparator group are set
out on page 73.
When determining the level
of vesting the Committee
also considers the underlying
performance of the business
to ensure the payouts are
appropriate.