Unilever 2013 Annual Report Download - page 68

PURPOSE AND LINK
TO STRATEY OPERATION OPPORTUNITY PERFORMANE MEASURES SUPPORTIN INFORMATION†
MANAEMENT
OINVESTMENT
PLAN (MIP)
The MIP encourages
senor management to
focus frmly on the
sustaned delvery of hgh
performance results over
the longer term by
requrng them to nvest a
porton of ther after-tax
annual bonus n Unlever’s
shares
The key terms of the MIP
were approved by the
shareholders at the 2010
AGMs.
Executve Drectors are
requred to buy Unlever’s
shares out of ther after-tax
annual bonus They must
nvest at least 25% and may
nvest up to 60% of the value
of ther gross annual bonus
earned n Unlever’s shares
(nvestment shares – whch
are held n the ndvdual’s
name)
Executve Drectors are able
to choose whether they nvest
n PL or NV shares or a
50/50 mx Executve
Drectors receve a
correspondng number of
performance-related shares
(matchng shares)2 Matchng
shares wll be awarded n the
same form as the nvestment
shares (e n PL or NV
shares or a 50/50 mx)
Matchng shares wll
normally vest after the end of
the three-year performance
perod subject to:
• Unlever’s performance
aganst long-term MIP
targets over the
performance perod and
the qualty of results
delvered;
• contnued employment;
and
• mantenance of the
underlyng nvestment
shares
Claw-back provsons apply1
Dvdend equvalents are
renvested under the plan3
Ultmate Remedy provsons
apply4
The Commttee shall operate
the MIP n accordance wth the
plan rules The Commttee may
adjust and/or amend awards to
take account of varatons n the
share captal, a change n the
certfcaton of Unlever NV
shares, demerger, a specal
dvdend, rghts ssues or
other corporate events
affectng the value of an
award n accordance wth the
MIP rules Pror shareholder
approval wll be requred for
amendments that are
materally to the advantage of
partcpants under the MIP n
respect of provsons relatng to
elgblty, lmts, form of award
or the adjustments of awards
Vestng of the matchng
shares ranges between 0%
and 150% of the grant level,
dependent on actual
performance aganst
long-term MIP targets
As such, the maxmum
award of matchng shares
for the EO and FO (as a
percentage of base salary at
grant), assumng a maxmum
bonus, maxmum deferral
under the MIP and
maxmum performance
under the MIP, would be
180% of base salary and
135% of base salary
respectvely
31% of the grant level would
pay out at threshold
performance However, ths
may be amended at the
dscreton of the ommttee f
the number of companes n
the TSR comparator group
changes
The Commttee sets
three-year performance
targets for each MIP
matchng share award
Performance measures
are lnked to Unlever’s
clearly stated growth
ambton and our
long-term busness
strategy and vest
subject to sales, margn,
cash generaton and
relatve shareholder
return measures
Performance measures
are equally weghted
The Commttee has
dscreton to determne
that other performance
measures may be used
for future awards and
that a dfferent
weghtng of measures
may apply Any such
change whch s
materal would be
subject to pror
shareholder
consultaton wth our
major shareholders
The specfc
performance measures
wll be dsclosed n the
year n whch the award
s granted The extent to
whch the performance
targets have been met
wll be dsclosed n the
Drectors’
Remuneraton Report
followng the end of
each respectve
performance perod
† Ths column does not
form part of the
bndng polcy report It
s ntended to provde
addtonal contextual
nformaton for the
reader
Performance measures
for 2014 awards whch
are assessed over the
three-year perod
2014-2016 are
descrbed under the
SIP on page 80
The Commttee
consders that usng the
same performance
measures across both
the MIP and SIP s
approprate, as the
performance measures
used reflect our key
strategc goals and
mantan the algnment
of our ncentve plans to
delverng our clearly
stated growth ambton
ven that we use four
dfferent performance
measures, the
ommttee beleves that
the proporton of
remuneraton lnked to
each performance
measure s not
excessve
65Unlever Annual Report and Accounts 2013 overnance