geo chapter meeting amsterdam may 2013
DESCRIPTION
Geo Chapter meeting Amsterdam May 2013. Introducing Ahold; The Corporate Structure…. Supervisory Board. Selection & Appointment Committee. Audit Committee. Remuneration Committee. Corporate Executive Board D. Boer(CEO) J. Carr (CFO), & L. Hijmans van den Bergh (CCGC). - PowerPoint PPT PresentationTRANSCRIPT
Geo Chapter meeting AmsterdamMay 2013
2
Introducing Ahold; The Corporate Structure…
Audit Committee
Ahold EuropeOperations
Supervisory BoardRemuneration
CommitteeSelection & Appointment
Committee
Corporate Executive BoardD. Boer(CEO)
J. Carr (CFO), & L. Hijmans van den Bergh (CCGC)
Ahold USAOperations
Corporate Center200 Employees
Tax
HR
Fin.
Legal
C&B MD
Sander vd Laan(COO)
J. McCann (COO)
Comm Audit
3
In Perspective
Corporate Center & Management Layers5,000 employees
Ahold Europe approx.95,000 employees
Ahold USA approx. 115,000 employees
Albert HeijnEtos Gall & Gall
Ahold CentralEurope
Giant Carlisle
Stop & Shop NE
Giant Landover
Stop & Shop Metro NY
AlbertBol.com
4
(Retention) Risk Paradox(financial driven approach vs development driven approach)
High
HighLow
Pro
babi
lity
= C
&B
Impact = MD & Succession Planning
Reduces Risk
Red
uces
Ris
k
Reducing the overall risk as a results of talent leaving thru probability axis:
Increase effectiveness of pay/benefits
Reducing the overall risk as a result of talents leaving thru impact axis:
Inspiring leadership Successful succession planning Training Clear career opportunities Mentor programs
The Deal
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Total Rewards StrategyPay: Base Salary Short-Term Incentive Mid-Term Incentive Long-Term Incentive
Benefits Pension Car allowance Health Insurance etc.
Learning and Development Education Training (on the job) Career perspective Mentor programs etc.
Work Environment Building Supporting Systems Culture Supervisor etc.
Attracts
Retains
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The pay component Three components:
Multiyear Incentive Equity
Annual Incentive Cash
Base Salary
Compensation for:
(Out)Performance
Doing your job
Value creation
Fixe
d
0
Var
iabl
eS
hort
Long
Design Objectives
Motivate / retain participants Reinforce alignment with shareholder interests and identification with Ahold Simple / easy to understand / administer Defendable publicly / Tabaksblat No particularly negative tax consequences (company or participant) More in line with market practice Overall, the Long-Term Incentive Program should:
Be regarded as a meaningful component of Total Direct Compensation Restore credibility of Long-term Incentive component as a pay component Make it possible for Ahold to attract and retain the best available talent Create corporate glue
Long-term Incentive Equity Component
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Historical Share Price Development
Global Reward Opportunity 2006 - 2012
Grant Date
Conditional: Waiting period of 3 years
T=3
1. Target grant value: € 900,000
2. Prior year bonus multiplier: example multiple = 1.20
3. Actual grant value: 1.20 x € 900,000 = € 1,080,000
4. Assumed share price: € 10.00
5. # of shares to be granted: € 1,080,000 / € 10.00 = 108,000
6. 50% of the shares granted thru:
the 3-years conditional component
and 50% through the TSR component
T=5
The number of performance shares that will vest is determined by a TSR performance-ranking and the pay out curve.
5-year, TSR component: # of Shares: 54,000
3-year component: # of shares granted: 54,000
Holding period for all shares is five years after date of grant
Vesting condition: employment only
PackageBase salary € 600,000GRO grant : 150%
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Historical overview
Redesign Pay Component:1.benchmarking top structure2.New STI (AIP)3.New LTI (GRO)
2005 20061. First vesting of
GRO shares2. GRO wins ‘best
plan effective-ness’ award (GEO Paris)
1. Approval In AGM for new Pay Policy CEB
2. Roll out AIP3. Roll out Gro
2009 20111. Completion first
full GRO cycle 2. Ahold ranks first
in the RTSR Peer group resulting in a 150% vesting
3. Transfer to MSSB as administrator GRO
1. Approval in AGM for ‘simplified’ GRO design
2. Roll out of the new design.
3. New website, new logo, explanatory video
1. Assessment of appropriateness design of variable pay components (in light of development in market and new strategy) Evaluation remuneration policy of CEB and rest of population Delinking AIP from Gro and grant at target (multiplier at 1x) Reduce performance period TSR component from five to three years Rescind matching share feature
2. Communication Development of AIP Performance tracker report in close cooperation with finance (please be referred to documents attached) Gro revitalization project
3. Education ELM modules on GRO and The Deal Periodic education sessions with European/CC Reward teams
4. Simplicity Evaluate pay policies (effectiveness current policies, gap analyses, close the gap strategy) Align pay policies where possible Tailor expat policy to new strategy (local plus, short-term exchange etc.)
Effectiveness2013
1. Assessment of appropriateness design of variable pay components
2. Increase effectiveness by better communication
3. Education4. Simplicity &
transparency.
2012Credibility
Grant Date
Conditional: Waiting period of 3 years
T=3
1. Target grant value: € 300,000
2. Prior year bonus multiplier: example multiple = 1.20
3. Actual grant value: 1.20 x € 300,000 = € 360,000
4. Assumed share price: € 10.00
5. # of shares to be granted: € 360,000 / € 10.00 = 36,000
T=5
3-year, RoC: # of Shares: 30,000
3-year, TSR component: # of Shares: 30,000
3-year component: # of shares granted: 36,000
Vesting condition: employment only
No change
1. Target grant value: € 600,000
2. Assumed share price: € 10.00
3. # of shares to be granted: € 600,000 / € 10.00 = 60,000
PackageBase salary € 600,000Conditional share grant: 50%Performance share grant: 100%
Biggest changeNo performance hurdle at grant, 50%
TSR and 50% RoC hurdle at vesting.
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Global Reward Opportunity 2013 -
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Historical Share Price Development
Value delivered through the GRO Program
Recent trends on equity programsDesign Employee share purchase programs Performance share plans
Financial education Responsibility Employer vs employee Financial Planning
Communication Less technical, more emphasis on intention, objectives Simplicity http://www.gro-ahold.com https://www.youtube.com/watch?feature=player_embedded&v=zUuXBiDrAzY