Today, Wavin - Jaarverslag.com

Wavin Annual Report 2010 | page 65When approving individual salary increases, consideration is given to the actual and expectedperformance of the Management Board member and the relative position of his fi xed base salarycompared to the relevant external market. Remuneration is paid in Euro with the exception ofMr. Taylor whose remuneration was paid in Pound Sterling (GBP).In 2009 the Management Board members’ fi xed base salaries were kept at the 2008 levels. In 2010 thefi xed base salary of all Dutch Management Board members was increased with 2% per 1July followingthe same delayed review date as for most of our senior managers throughout the company. Mr. Taylor’ssalary was increased with 2.5% per 1 July.Variable remunerationMembers of the Management Board are entitled to a short-term annual incentive (STI) and a sharebased annual long-term incentive plan (LTIP). The Supervisory Board determines these incentives afterthorough scenario-analyses and with due regard for the pay differentials within the company. In respectof LTIP share price projections, four levels of company performance and three levels of marketperformance are modelled.Short term annual incentive (STI)The STI is dependent on the achievement of fi nancial performance targets and individual fi nancial and/ornon-fi nancial objectives determined at the beginning of each calendar year. During its meeting ofDecember 2009 the Supervisory Board approved the 2010 fi nancial performance targets for the totalGroup as follows: profi t (50% weight), cash fl ow (20% weight) and revenue growth (30% weight).The fi nancial performance targets were based on the 2010 operational plan objectives, which are notdisclosed for reasons of commercial confi dentiality. These account for 80% of the incentive. A further20% depends on the achievement of certain individual objectives.The fi nancial targets and individual objectives are determined by the RA&CG Committee based on pastperformance and the mid- and long-term strategic objectives of the company. The targets support therealisation of long term value creation.After the closing of each fi nancial year the RA&CG Committee approves the audited outcome of actualachievements versus the preset fi nancial and individual targets. The RA&CG Committee has the right tochange targets as a result of unforeseen circumstances. This was not the case in 2010.In 2010, the annual incentive opportunity for the Dutch Management Board members ranged from 0%to 75% of their annual fi xed base salary, with a target of 50%. The UK-based Board member Mr. Taylorhad a range of 0% to 81%, with a target of 54%. Target incentives are reached when the fi nancial andindividual goals are fully met. Based on the fi nancial performance and the individual objectives, theRA&CG Committee determined a 2010 individual short-term incentive for the Management Boardmembers of 14% to 15% of their fi xed base salary.Long term incentive plan (LTIP)Management Board members as well as other senior managers may, on a voluntary basis, elect to investannually up to 50% of their individual annual bonus in Wavin shares. This LTIP focuses participants oncreating long term shareholder value by encouraging share ownership and aligning their interests withthose of shareholders.A participant will receive (a) the right to one conditional matching share for each two purchased shares;and (b) a maximum of three conditional performance options for each share purchased. The purchasedshares and the matching shares are subject to a mandatory lock-up period of fi ve years. The matchingshares will be transferred to the participant after three years provided that the participant is still employedby Wavin. These matching shares must, however, still be retained for the full fi ve-year lock-up period asreferred to above.The participants will be granted a maximum of three conditional performance options for eachpurchased share. The performance options have a total term of seven years: a vesting period of fouryears and a subsequent exercise period of three years. The total number of performance options to begranted is dependent on the average annual normalised Ebitda growth realised during the four-yearoption-vesting period and can only be exercised if the participant is still employed by Wavin at the timeof vesting. More information on the LTIP can be found on the corporate website.