Unilever Annual Report & Accounts and Form 20-F 2000

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40 Unilever Annual Report & Accounts and Form 20-F 2000 Report of the Directors Remuneration report Directors’ emoluments The aggregate emoluments of the directors were as follows: € £ 2000 1999 2000 1999 Salary 7 854 620 7 205 532 4 781 108 4 747 056 Allowances and value of benefits in kind 1 265 478 1 089 636 770 297 717 860 Performance related payments 4 826 260 2 395 381 2 937 744 1 578 094 Total 13 946 358 10 690 549 8 489 149 7 043 010 Gains on exercise of share options (1) 2 075 600 1 173 407 1 263 418 773 049 The emoluments of the individual directors were as follows: Allowances and value of Performance Equivalent totals (8) benefits in related Total Total Salary kind payments (7) 2000 1999 2000 1999 Paid in euros: € € € € € £ £ A Burgmans (2) 839 493 19 494 441 088 1 300 075 968 060 791 356 637 765 A R van Heemstra (3) 350 923 64 180 238 452 653 555 397 819 A Kemner 703 359 17 337 283 454 1 004 150 885 532 611 226 583 395 J Peelen (4) 287 394 5 187 130 190 422 771 960 338 257 341 632 678 Paid in pounds sterling: £ £ £ £ £ € € N W A FitzGerald (5) 800 000 105 142 424 531 1 329 673 1 153 075 2 184 447 1 750 247 R D Brown 380 000 166 549 166 250 712 799 682 345 1 171 018 1 035 728 A C Butler 445 000 46 852 209 205 701 057 594 421 1 151 728 902 268 P J Cescau 400 000 177 958 533 775 (6) 1 111 733 430 935 1 826 406 654 115 K B Dadiseth (3) 237 334 156 076 157 708 551 118 905 402 R H P Markham 420 000 40 446 225 666 686 112 556 871 1 127 176 845 271 Paid in US dollars: US$ US$ US$ US$ US$ R M Phillips (4) 500 000 5 229 230 000 735 229 1 763 523 €798 326 €1 655 437 £485 941 £1 090 614 C B Strauss (3) 666 667 13 882 610 000 1 290 549 €1 401 304 £852 974 (1) See pages 43 and 44. (2) Chairman of NV. (3) Elected on 3 May 2000. (4) Retired on 31 May 2000. (5) Chairman of PLC. (6) Emoluments include an incentive payment of £318 439 paid in 2000 which relates to an appointment prior to joining the main Board. (7) Includes value of shares awarded under bonus scheme in respect of both 1999 and 2000. (8) Based on average rates for the year of £1.00 = €1.643, £1.00 = US$1.513, US$1.00 = €1.086 (1999: £1.00 = €1.518, £1.00 = US$1.617, US$1.00 = €0.9389). For the years up to and including 1997, NV loaned the amount of taxation charged on the grant of options under Dutch fiscal legislation to the recipients. Amounts are repaid when the options are exercised. At 31 December 2000 a total of €0.14 million (1999: €0.45 million) was loaned to the directors. No compensation for loss of office, payments for loss of office or other termination payments were paid to directors in 2000.
Unilever Annual Report & Accounts and Form 20-F 2000 Report of the Directors Remuneration report Service contracts NV and PLC’s Articles of Association require that at every Annual General Meeting all the directors shall retire from office. All directors’ contracts of service with the Unilever Group are generally terminated no later than the end of the month in which the Annual General Meeting closest to the director’s 62nd birthday occurs. Contracts are currently terminable by the employer at not less than two years’ notice. The Remuneration Committee believes that the current service contracts are not out of line with the arrangements of many peer group companies but has noted the recommendation in the Code in favour of one-year contracts. The Committee continues to have regard to best practice in both the Netherlands and the United Kingdom and keeps developments in both countries under regular review. Accordingly, the Committee has recommended that, as part of the changes of remuneration arrangements being proposed for implementation in 2001, it would be appropriate to make the directors’ service contracts terminable by one year’s notice with effect from 2001. The compensation payable to a director upon the termination of his service contract will be calculated in accordance with the law applicable. The directors have service contracts with both NV and PLC. The Remuneration Committee’s aim is always to deal fairly with cases of termination whilst taking a robust line in minimising any such compensation. The Remuneration Committee has given due consideration to the recommendations contained in the Code regarding the merits of providing explicitly in the directors’ contracts of service provisions relating to compensation commitments in the event of early termination. The Committee will continue to keep its current practice under review. In 2000 five directors served for only part of the year. In 1999 three directors served for only part of the year. Share options Unilever introduced share options for directors and other senior managers during 1985 in the United Kingdom and the Netherlands and during 1992 for North America. Types of share options for employees generally were introduced during 1985 in the United Kingdom, 1995 in the Netherlands and North America, and 2000 in Germany and France. Directors are generally entitled to share options on the same basis as other employees. They participate in the UK Employee Sharesave Plan and the Netherlands Employee Option Plan, which are all-employee plans, and in the International Plan, as described in note 34 on pages 79 to 89. Grants of share options to directors and other senior executives in 2000 were made under the International 1997 Executive Share Option Scheme (the ‘International Plan’). Under the International Plan, which was established in 1997 after taking into account the guidelines and views of institutional investor committees, the Boards granted options to acquire a number of ordinary shares in NV and a number of ordinary shares in PLC of approximately equal market value, as described in Note 34 on pages 79 to 89. The Boards have established benchmark grant levels (the ‘normal allocation’) to assist in determining actual grant levels under the International Plan. In accordance with the undertaking made at the time the International Plan was introduced, the Remuneration Committee has reviewed these normal allocations and has determined that they continue to be in line with those awarded by companies in Unilever’s peer group. The actual level of grant made to each individual, which is decided by the Boards, who are advised by the Remuneration Committee, is dependent on certain performance criteria, group and individual, which are set annually by the Boards and the Remuneration Committee. These criteria must be satisfied before an individual can be granted an option. The Group criterion for 2000 was that the Group’s earnings per share, adjusted to exclude certain exceptional items and one-off events, over the three financial years preceding the date of grant of any option should have cumulatively risen by at least 6% more than the rate of inflation. If it had not, no grants would have been made. Once the Group criterion had been met, each individual’s option grant varied according to the percentage increase, above the rate of inflation, of the Group’s adjusted earnings per share over the financial year preceding the date of grant. The level of grant would vary according to the amount of the percentage rise. The Remuneration Committee decided that for 2000 the targets and levels of grant would be: Level of grant as percentage Adjusted EPS growth achieved in 1999 of normal allocation Inflation + less than 4% 0% Inflation + 4% 50% Inflation + 5% 75% Inflation + 6% 100% Inflation + 7% 125% Inflation + 8% or more 150% The adjusted EPS growth for 1999 was inflation +6% which produced a 100% level of grant for 2000. The normal allocations in 2000 to which the percentages above would be applied were: NV shares PLC shares Chairmen 12 000 80 000 Other directors 6 000 – 7 500 40 000 – 50 000 The price payable for each ordinary share under an option is not less than the closing price on the Stock Exchange Daily Official List on the date of grant. In normal circumstances, an option granted under the International Plan may not be exercised earlier than three years after the date of grant. 41
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Unilever Annual Report & Accounts and Form 20-F 2000

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