Unilever 2015 Annual Report Download - page 77

PERFORMANE ELEMENTS OF REMUNERATION
The actual targets for the annual bonus and the three busness-focused performance measures for the MIP and SIP awards to be
made n 2016 have not been dsclosed up front The Boards deem ths to be commercally senstve nformaton as targets could reveal
nformaton about Unlever’s busness plan and budgetng process to compettors, whch could be damagng to Unlever’s busness
nterests and therefore to shareholders Where approprate, targets wll be dsclosed n the Drectors’ Remuneraton Report followng
the end of the respectve performance perod
Performance measures are selected to algn wth Unlever’s clearly stated growth ambton and our long-term busness strategy
Unlever’s prmary busness obectve s to generate a sustanable mprovement n busness performance through ncreasng underlyng
sales whle steadly mprovng core operatng margns and cash flow
The measures chosen for the annual and long-term ncentves support the delvery of ths obectve Performance measures focus
management on the delvery of a combnaton of top-lne revenue growth and bottom-lne proft growth that Unlever beleves wll buld
shareholder value over the longer term The use of a performance measure based on total shareholder return measures Unlever’s
success relatve to peers
PERFORMANE
ELEMENTS OF
REMUNERATION
AT A LANE DESRIPTION
ANNUAL BONUS • EO – target 120% of base salary,
maxmum 200% of base salary
• FO – target 100% of base salary,
maxmum 150% of base salary
The performance measures for 2016 wll be
Underlying sales
growth (⅓)
Free cash flow (⅓) Core operating
margin
improvement (⅓)
In addton, when determnng annual bonus awards, the ommttee wll
also consder personal performance and the qualty of results n terms
of both busness results and leadershp, ncludng corporate socal
responsblty and progress aganst the delvery of USLP goals
MIP 2016 • Out of ther annual bonus awards,
Executve Drectors are requred
to nvest 25% of ther gross bonus
and may nvest up to 60% of ther
gross bonus n the MIP
(nvestment shares whch are
held n the ndvdual’s name)
• They are awarded an equal number
of MIP matchng shares
• Maxmum vestng for matchng
shares s 150% of the ntal award
• The maxmum award of matchng
shares for the EO and FO (as a
percentage of base salary at grant),
assumng maxmum bonus and
maxmum deferral under the MIP,
would be 180% of base salary and
135% of base salary respectvely
Matchng shares awarded under the MIP n 2016 wll be subect to the
same performance measures as SIP awards made n the year Further
detals of the performance measures are dsclosed below
The omm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 wth the delvery of our clearly stated growth
ambtons 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
SIP 2016 AWARDS • Target award 200%
of base salary for the EO and
150% of base salary for FO
• Maxmum vestng of 200%
ntal award
• Maxmum vestng of 400% of
base salary for the EO and
300% of base salary for the FO
Performance targets are assessed over a three-year perod
Performance measures for 2016 awards
Underlying
sales growth
(25%)(a)
Core operating
margin
improvement
(25%)(a)
Cumulative
operating cash
flow (25%)(a)
Relative total
shareholder
return (25%)(b)
Both performance conditions
must reach threshold
performance, before any
payout in respect of either
measure is made.
70 Unilever Annual Report and Accounts 2015Governance
DIRETORS’ REMUNERATION REPORT ONTINUED