Unilever 2012 Annual Report Download - page 74

ABOUT UNILEVER GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
71Unilever Annual Report and Accounts 2012 Report of the Directors overnance
Elements of remuneraton
Fxed elements of remuneraton
Base salary
AT A LANE
Salary effectve from 1 January 2013
• EO £1,010,000 (36% increase)
• CFO £714,000 (0% increase)
2012 outcomes
Following a review of the competitive positioning of Executive
Directors’ salaries in 2011, the Boards, on the proposal of the
Committee, approved a 6% base salary increase for the CEO to
£975,200 and a 5% base salary increase for the CFO in respect
of 2012 to £714,000. Given the difficult and uncertain economic
circumstances prevailing during early 2012, the implementation
of the 2012 base salary increases was deferred until such a point
as the Committee considered appropriate. Base salary increases
were made effective from 1 July 2012 and were not backdated.
2013 revew
The Committee reviewed the competitive positioning of Executive
Director base salaries in late 2012 in the context of the prevailing
economic circumstances and, after giving due consideration to
pay and conditions elsewhere in Unilever, the Boards, on the
proposal of the Committee, decided to award Executive Directors
base salary increase of 3.6% for the CEO and 0% for the CFO.
For 2013, the average salary increase for employees other than
Executive Directors will be approximately 4.4%.
Fxed allowance
AT A LANE
Fxed allowance for 2013
• CEO – £250,000
• CFO – £300,000
In order to simplify the provision of benefits and to increase
transparency, from 2012 the provision of benefits and pension
was replaced by a fixed allowance for senior executives at
Unilever which is paid in cash.
The level of fixed allowance provided to the CFO will be reduced
in the coming years to reflect the phasing-out of his annual
housing allowance. The CFO’s allowance for 2013 is £300,000
and at prevailing rates this will be reduced to £260,000 in 2014
and to £220,000 in 2015.
Other beneft enttlements
Executive Directors are also provided with death, disability and
medical insurance cover and actual tax return preparation costs.
Unilever also paid the CEO’s social security obligations in his
country of residence.
Following the introduction of the fixed allowance in 2012, the only
pension arrangement that remains for Executive Directors is the
CEO’s hiring-in agreement of a supplemental pension provision
which is conditional on the CEO remaining in employment with
Unilever to age 60 and subsequently retiring from active service
or his death or total disability prior to retirement. The contribution
from 2012 is capped at 12% of the lower of the CEO’s actual base
salary and his 2011 base salary (£920,000) plus 3% per annum.
Accordingly, the benchmark cap for 2012 was £947,600, with
a maximum contribution of £113,712, and for 2013 has been set
at £976,028, with a maximum contribution of £117,123.
Performance elements of remuneraton
Annual bonus
AT A LANE
• CEO – target 120% of base salary, maximum 200%
of base salary
• CFO – target 100% of base salary, maximum 150%
of base salary
For 2012, the Executive Directors’ annual bonus opportunity was
based on Unilever’s results referenced against financial targets
set at the beginning of the year as follows:
Underlyng
sales growth
(1/3)
Underlyng
volume growth
(1/3)
ore operatng
margn
mprovement
(1/3)
The Committee also considers the quality of performance in
terms of business results and leadership, including corporate
social responsibility and delivery of USLP goals, when
determining payouts.