Unilever 2013 Annual Report Download - page 64

The package has been desgned based on the followng key
prncples:
PAYIN FOR PERFORMANE
The focus of our package s on varable pay based on annual
and long-term performance Performance-related elements
are structured so that target levels of reward are compettve,
but Executve Drectors can only earn hgher rewards f they
exceed the ongong standards of performance that Unlever
requres
ALININ PERFORMANE MEASURES WITH STRATEY
The performance measures for our annual and long-term
plans have been selected to support our busness strategy and
the ongong enhancement of shareholder value through a
focus on ncreasng sales value and volume, mprovng margn,
and cash generaton and generatng returns for shareholders
DELIVERIN SUSTAINABLE PERFORMANE
Acknowledgng that success s not only measured by delverng
fnancal returns, we also consder the qualty of performance
n terms of busness results and leadershp, ncludng
corporate socal responsblty and progress aganst the USLP,
when determnng rewards
To ensure that remuneraton arrangements fully support our
sustanablty agenda, the personal performance goals for the
EO under the annual bonus nclude USLP targets
ALINMENT WITH SHAREHOLDER INTERESTS
The majorty of the package for our Executve Drectors s
delvered n Unlever shares to ensure that the nterests of
executves are algned wth shareholders’ Ths s further
supported by sgnfcant shareholdng requrements ensurng
that a substantal porton of each Executve Drector’s personal
wealth s lnked to Unlever’s share prce performance
Non-Executve Drectors are also encouraged to buld up ther
personal holdng of Unlever shares to ensure algnment wth
shareholders’ nterests
PAYIN OMPETITIVELY
The overall remuneraton package offered to Executve
Drectors s suffcently compettve to attract and retan hghly
experenced and talented ndvduals, wthout payng more
than s necessary
PREVENTIN INAPPROPRIATE RISKTAKIN
The Commttee beleves that Unlever’s rsk management
process provdes the necessary control to prevent
napproprate rsk-takng When the Commttee revews the
structure and levels of performance-related pay for Executve
Drectors and other members of the ULE, t consders whether
these mght encourage behavours that are ncompatble wth
the long-term nterests of Unlever and ts shareholders or that
may rase any envronmental, socal or governance rsks
Where necessary, the Commttee would take approprate steps
to address ths
In ths context, the ommttee decded to pay a bonus of 157% of
salary to the EO Paul Polman and a bonus of 105% of salary to
the FO Jean-Marc Huët The Commttee feels that ths outcome
farly reflects the performance delvered n the context of
challengng markets
Over the longer term Unlever has consstently performed strongly
aganst a range of measures enablng us to delver over 40%
n total shareholder return (TSR) over the past three years In the
same perod, underlyng sales growth has been 59% per annum
whch the Boards consder to be exceptonal performance
n the context of the recent economc clmate We have also
consstently mproved margn performance convertng our top-lne
growth nto proftable returns for our shareholders ash flow
performance has also been strong fundng future nvestment n
growth On the bass of ths performance, the ommttee
determned that SIP awards granted to Executve Drectors n
2011 wll vest at 128% of ntal award levels (out of a maxmum
of 200% – e 64% of maxmum awards)
The Commttee beleves t s mportant that Executve Drectors
act and thnk as shareholders The CEO currently holds around 14
tmes salary n Unlever shares wth the FO holdng around sx
tmes salary In addton, at Unlever we beleve t s mportant that
all employees, not just senor management, are shareholders n
our busness Durng the year, therefore, the ommttee approved
the ntroducton of a new global employee share plan for those
employees who do not currently partcpate n equty ncentve
arrangements We wll start the process of mplementng ths
scheme across all the countres where we employ people
from2014
Other key actvtes of the ommttee durng the year were:
• annual revew of the remuneraton framework;
• annual revew of Unlever’s remuneraton practce to ensure
that the overall remuneraton structure contnues to promote
Unlever’s busness strategy;
• determnaton of the remuneraton packages for the Executve
Drectors, other members of the Unlever Leadershp
Executve (ULE) and the fee structure of the Non-Executve
Drectors, ncludng the settng of the performance targets for
the bonus, SIP and MCIP awards;
• determnaton of the extent to whch the performance
measures for the bonus, SIP and MCIP awards were acheved;
• determnaton of selecton crtera for the hrng of advsers by
the ommttee and the assessment of performance of the
ommttee’s ndependent advser, Delotte LLP; and
• refnement of the Executve Drectors’ mnmum shareholdng
requrements
The Commttee remans commtted to lnkng remuneraton to the
achevement of Unlever’s strategc objectve
Paul Walsh
Charman of the ompensaton and Management Resources
ommttee
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Unlever Annual Report and Accounts 2013 overnance