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Wavin Annual Report 2010 | page 64RemunerationReportRemuneration policyThis annual report covers exclusively the relevant information of the remuneration for the ManagementBoard. The remuneration policy applies to all senior managers, including Management Board, seniormanagers of all operating companies and corporate managers.The remuneration of the Management Board members is approved by the Supervisory Board followingthe recommendation of the RA&CG Committee. The remuneration policy of the Management Board wasformally adopted in the General Meeting of shareholders in 2007. Any material amendments to the policywill be submitted to the General Meeting of Shareholders. In the reporting year there were no materialchanges to the remuneration policy compared to the previous year.Determination of the remuneration for each individual Management Board member is a responsibility ofthe complete Supervisory Board. The Supervisory Board has delegated this authority to the RA&CGCommittee. Pursuant to this delegation of authority, and acting within the principles of the remunerationpolicy, the RA&CG Committee determines the remuneration packages for the members of theManagement Board, including base salary, pension rights, short-term annual incentive and long-termincentive awards. The Remuneration policy entitles the Supervisory Board to make variable remunerationadjustments and recoveries at any time. Adjustments may and/or recoveries will be applied amongstothers in the case of business related extraordinary circumstances and/or incorrect fi nancial or otherdata. The Management Board is entitled to do the same for the management of all operating companiesand corporate managers. In the reporting year there were no adjustments and/or recoveries.ObjectiveThe primary objective of the remuneration policy is to motivate, attract and retain qualifi ed ManagementBoard members. Pay for performance is the driving force of this policy. It encourages commitment toachieving previously defi ned business objectives and challenging performance goals and balancesshort-term operational performance with the longer-term objectives of Wavin. The levels of remunerationfor the Management are set in line with external comparable benchmark data and are aligned with theremuneration of other senior managers at Wavin. The remuneration policy conforms to relevantcorporate governance guidelines and statutory requirements. Levels of remuneration are reviewed atleast once per year. The RA&CG Committee periodically seeks external remuneration expert advice.This performance related pay system, of which variable pay is a signifi cant part, is supported by aperformance appraisal system that enables an effective review of the performance of the ManagementBoard. The policy should ensure that competitiveness with the external market is maintained.The remuneration package of the Management Board members presently consists of:• A fi xed base salary, which is reviewed annually;• A short-term annual incentive expressed as a percentage of the annual base salary;• A long term incentive plan;• Pension contributions;• Other secondary benefi ts: a company car, health and travel insurance, telephone and arepresentation allowance.To ensure external comparability and internal alignment, Wavin follows the Hay methodology for jobgrading. Instead of using a self-defi ned peer group the remuneration position is compared with surveyedboard compensation levels in the Netherlands, called ‘The Hay Boardroom Total Remuneration Guide’.The 2011 edition of this Top Executive database holds information on 382 senior executives and 110companies. Where a Management Board member is not a Dutch resident, remuneration is benchmarkedagainst the relevant home market Top Executive database of Hay.The 2011 boardroom guide reports that the modest compensation increase in recent years has resultedin a below market compensation package for Management Board members. This situation will beanalised and we intend to submit a proposal to the Annual General Meeting of Shareholders in 2012 tobring the compensation package of the Management Board members in line with board compensationlevels in the Netherlands.Base salaryThe fi xed base salaries of the Management Board members are determined on the basis of performanceand experience and are benchmarked against the surveyed trendline market median level for fi xed basecompensation.