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49 Unilever Annual Report on Form 20-F 1999 Report of the Directors
Remuneration report
Remuneration of Directors and Executive Officers
The aggregate amount of remuneration paid by the
Unilever Group to all directors and executive officers for
services in all capacities during 1999 was Fl. 28 198 932.
The aggregate amount set aside by the Unilever Group
during 1999 to provide pension, retirement or similar
benefits for directors and executive officers was
Fl. 6 701 246.
Policy: directors’ emoluments
The objective of Unilever’s remuneration policy for
directors is to motivate and retain top class business
people able to direct and lead a large global company,
and to reward them accordingly.
The Remuneration Committee believes that the level of
remuneration of Dutch or British directors resident in their
home countries should be in line with that of executive
directors of major international industrial companies based
in the Netherlands and the United Kingdom respectively,
who have similar responsibilities to a Unilever director
whilst recognising Unilever’s size and special features. The
levels of remuneration of the Chairmen and the members
of the Executive Committee take into account their special
responsibilities and provide differentials comparable to
those found in other major international industrial
companies. A director who is not resident in his home
country is paid at the level of remuneration appropriate
to his place of residence if this is higher than that in his
home country. Directors not of Dutch or British nationality
are, in principle, to be no worse off than they would be
if based in their home country in a job of comparable
importance.
Levels of remuneration are reviewed annually by the
Remuneration Committee in the light of external expert
advice which assesses competitive levels of remuneration
in the largest companies relevant to the residence of the
group of Unilever directors concerned. Comparison is
also made with the remuneration of other employees
within Unilever.
The Remuneration Committee’s policy is to seek to link
reward closely to performance by using merit pay
increases and bonuses based on both corporate and
personal performance.
NV and PLC and their group companies constitute a single
group. It is therefore the practice for directors to receive
emoluments from both NV and PLC because they serve
both companies. Emoluments, wherever stated, include
payments from both NV and PLC. All emoluments and
fees earned by directors from outside directorships and
like sources are required to be paid to and are retained
by Unilever.
All directors’ emoluments, including those of the
Chairmen, are made up of the following elements:
(i) Salary:
Salaries are fixed by the Remuneration Committee.
They are usually fixed in the currency appropriate to the
location, the Netherlands, United Kingdom or United
States, where the director is based. On the same basis
as other employees, directors receive an additional
month’s salary in the year they complete 25 years’ service
with Unilever.
(ii) Allowances and value of benefits in kind:
In appropriate cases, and usually in accordance with the
same rules as apply to all qualifying employees, dire c t o r s
receive allowances to help them meet expenses incurre d
by virtue of their employment, for example, in re s p e c t
o f relocation and consequential disturbance and
education expenses. Certain of the London based
d i rectors receive an allowance to take account of the
f a c t that part of their remuneration is paid in the
Netherlands. Benefits in kind are items such as a
company car and medical insurance.
(iii) Performance related payments:
These arise primarily under an annual bonus scheme.
Bonuses are set by the Remuneration Committee.
The maximum cash bonus for directors is 40% of salary.
Bonuses are based on achievement of a target or target
range which may involve two measures of performance:
(a)a corporate target; and
(b)individual targets.
The corporate target is based on the average of the
increase in earnings per share expressed in guilders and
in pounds sterling. The individual targets are based on
previously agreed key objectives.
Directors are given the opportunity to use 25% of their
cash bonuses, during the year of payment, to purchase
shares in NV and PLC and to be awarded shares of
equivalent value, upon condition that all the shares are
retained for at least five years.