Annual Report 2010 - SBM Offshore

Report of Board of Management
Actual Remuneration of the Members of
the Management Board in 2010
This section provides an overview of the actual remuneration
of the Managing Directors, Mr. A. Mace, CEO,
Earnings of Managing Directors in 2010
In thousands of € Base salary
and Mr. M. Miles, CFO, received during the year
under review, with an indication of threshold, at-target
and maximum earnings possibility for both the STI
and the LTI.
Short-Term
Incentive Cash (1)
Short-Term
Incentive Shares (2)
A.J. Mace 490 285 71
M.A.S. Miles 396 230 58
(1) This amount represents 80% of the Short Term Incentive earned in
respect of performance year 2009, which was paid in cash in 2010.
The amount of the bonus is computed in US Dollars (the Company's
functional currency) and then converted for payment in Euros at the
average exchange rate on the five trading days following the date of
publication of the final results for the year 2009.
The Short-Term Incentive relating to the performance
year 2010 is based upon the Economic Profit (EP)
of the year 2010, i.e. Return On Average Capital
Employed (ROACE) exceeding an assumed Weighted
Awards made under Long-Term Incentive to Managing Directors in 2010
(2) This amount represents 20% of the Short Term Incentive earned in respect of performance
year 2009, which became payable in shares in 2010. The number of shares was
calculated by using the average closing price of the share on the five trading days following
the date of publication of the final results for the year 2009. An equal number of
matching shares will vest after the three-year period ending 31 December 2012.
Average Cost of Capital (WACC). Because of the sensitive
nature of the short term incentive targets, it is
Company policy not to disclose these.
Target number of performance
shares conditionally
awarded in 2010 (3)
Minimum vesting
opportunity (number of
performance shares)
Maximum vesting
opportunity (number of
performance shares)
A.J. Mace 35,709 0 53,564
M.A.S. Miles 28,822 0 43,233
(3) The number of performance shares that vest for the
perfor mance period 2010-2011-2012 will be determined in
March 2013, upon finalisation of the financial accounts for
the year 2012. Following the vesting of the performance shares,
a lock-up of two years applies to the performance shares
The value of the conditional award of performance
shares in 2010 equals 100% of base salary in the year
preceding the award, i.e. 2009. This value, divided by
the average closing price of the share over the five
trading days following the date of publication of the
final results for the previous financial year, determines
the number of performance shares that may vest if
40 SBM Offshore – Annual Report 2010
‘at-target’ performance is achieved. Threshold performance
will result in the vesting of 50% of the target
number of conditionally awarded performance shares
whilst the maximum number of performance shares
that may vest is capped at 150% of the target number
of shares (in numbers not value).