Unilever 2012 Annual Report Download - page 71

68 Unilever Annual Report and Accounts 2012Report of the Directors overnance
DIRETORS’ REMUNERATION REPORT continued
Remuneraton polcy for new hres
In the event of hiring a new Executive Director, the Committee
will typically align the remuneration package with the above
remuneration policy. However, the Committee retains the
discretion to make remuneration proposals on hiring a new
Executive Director which are outside the standard policy to
facilitate the hiring of someone of the calibre required to deliver
the Group’s strategy.
In determining appropriate remuneration arrangements on
hiring a new Executive Director, the Committee will take into
consideration all relevant factors (including but not limited to
quantum, the type of remuneration being offered, the impact on
existing remuneration arrangements for other Unilever executives
and the jurisdiction the candidate was recruited from) to ensure
that arrangements are in the best interests of both Unilever
and its shareholders without paying more than is necessary.
The Committee may make awards on hiring an external candidate
to ‘buyout’ remuneration arrangements forfeited on leaving
a previous employer. In doing so the Committee will take account
of relevant factors including any performance conditions attached
to these awards, the form in which they were granted (eg cash or
shares) and the time over which they would have vested. Generally
buy-out awards will be made on a comparable basis.
Servce contracts
AT A LANE
• 12 months’ notice from Unilever
• 6 months’ notice from the Executive Director
• Severance payments limited to base salary
and fixed allowance and benefits
• Incentives typically pro-rated for time and
performance for ‘good leavers’ only
Executve Drectors
If Executive Directors cease to be Directors, this shall be deemed
to be under notice by Unilever of termination of employment. Paul
Polman’s service contract is dated 7 October 2008 and Jean-Marc
Huët’s service contract is dated 19 March 2010.
The Executive Directors’ service contracts provide that their
remuneration is reviewed (although not necessarily increased)
at least on an annual basis and that Unilever reimburses them
for all reasonable business expenses.
Executve Drector severance payment polcy
The Group operates the following policy in respect of
exit payments:
• Executive Directors are subject to a notice period of 12 months
from Unilever and six months’ notice from the Executive
Director in line with both the practice of many comparable
companies and the entitlement of other senior executives
in Unilever.
• Severance payments in relation to the service contract are
limited to no more than one year’s base salary plus the fixed
allowance and other benefits, unless the Boards, at the
proposal of the Committee, find this manifestly unreasonable
given the circumstances or unless dictated by applicable law.
• The Committee has the discretion to determine appropriate
bonus amounts and vesting of share-based awards taking
into consideration the circumstances in which an Executive
Director leaves.
Typically for ‘good leavers’, bonus amounts (as estimated by the
Committee) and other share-based awards will be pro-rated for
time in service to termination and will, subject to performance,
be paid at the usual time. Good leavers will be determined at
the discretion of the Board in appropriate circumstances.
Treatment of share-based ncentves n the event
of a change of control
In the event of a change of control, matching shares awarded
under the MCIP and shares awarded under the GSIP will generally
vest based on performance at that time and may, at the discretion
of the Board, be pro-rated for time. Alternatively, participants may
be required to exchange their awards for equivalent awards over
shares in the acquiring company.
Non-Executve Drectors’ letters of appontment
The terms of engagement of Non-Executive Directors are
set out in letters of appointment. Non-Executive Directors are
currently appointed for a three-year term, subject to satisfactory
performance, re-nomination and re-election at annual
shareholder meetings. Non-Executive Directors may terminate
their engagement upon three months’ notice. The letters of
appointment do not contain provision for notice periods or
compensation if their appointments are terminated by Unilever.
Non-Executve Drector
Date frst
apponted to the
Board
Effectve date of
current letter of
appontment
Michael Treschow 16 May 2007 15 May 2007
Louise Fresco 14 May 2009 25 May 2009
Ann Fudge 14 May 2009 7 June 2009
Charles Golden 9 May 2006 17 May 2007
Byron Grote 9 May 2006 16 May 2007
Sunil B Mittal 12 May 2011 12 May 2011
Hixonia Nyasulu 16 May 2007 15 May 2007
Sir Malcolm Rifkind 12 May 2010 13 May 2010
Kees Storm 9 May 2006 15 May 2007
Paul Walsh 14 May 2009 21 May 2009
All Non-Executive Directors were re-appointed to the Boards
at the 2012 AGMs. The unexpired term for all Non-Executive
Directors’ letters of appointment is the period up to the 2013
AGMs, as they all, unless they are retiring, submit themselves
for annual re-election.
With effect from the 2013 AGMs, all Non-Executive Directors
will sign new letters of appointment. Continuation of appointment
is subject to satisfactory performance, re-nomination at the
discretion of the Boards on the recommendation of the