1. Description of the procedure used in 2016 for (i) developing a remuneration policy for the non-executive Directors and Executive Management and (ii) setting the remuneration of the individual Directors and Executive Managers
The remuneration policy for non-executive Directors is determined by the General Meeting of Shareholders on the motion of the Board of Directors, acting upon proposals from the Nomination and Remuneration Committee. The policy was approved by the Annual General Meeting of 10 May 2006 and amended by the Annual General Meetings of 11 May 2011 and of 14 May 2014.
The remuneration policy for the Chief Executive Officer is determined by the Board of Directors, acting upon proposals from the Nomination and Remuneration Committee. The Chief Executive Officer is absent from this process. The Committee ensures that the Chief Executive Officer's contract with the Company reflects the remuneration policy. A copy of the Chief Executive
Officer’s contract is available to any Director upon request to the Chairman.
The remuneration policy for the members of the BGE other than the Chief Executive Officer is determined by the Board of Directors acting upon proposals from the Nomination and Remuneration Committee. The Chief Executive Officer has an advisory role in this process. The Committee ensures that the contract of each BGE member with the Company reflects the remuneration policy. A copy of each such contract is available to any Director upon request to the Chairman.
2. Statement of the remuneration policy used in 2016 for the non-executive Directors and Executive Management
Non-executive DirectorsThe remuneration of the non-executive Directors is determined on the basis of six regular meetings of the full Board of Directors per year. A portion of the remuneration is paid on the basis of the number of regular meetings attended in person by the non-executive Director.
Non-executive Directors who are members of a Board Committee receive a fee for each Committee meeting attended in person. As an executive Director the Chief Executive Officer does not receive such attendance fee.
If the Board of Directors requests the assistance of a Director in a specific matter on account of his or her independence and/or competence, such Director will be entitled, in respect of each session warranting specific travel and time, to a remuneration equal to the applicable amount payable in respect of a Board Committee meeting attended in person.
The actual amount of the remuneration of the Directors is determined by the Annual General Meeting for the running financial year.
The remuneration of the Directors is regularly benchmarked with a selected panel of relevant publicly traded industrial Belgian and international references, in order to ensure that persons with competences matching the Group’s international ambitions can be attracted.
Non-executive Directors are not entitled to performance related remuneration such as bonuses, stock related long-term incentive schemes, fringe benefits or pension benefits, nor to any other type of variable remuneration except for the attendance fees in respect of Board or Committee meetings.
Expenses that are reasonably incurred in the performance of their duties are reimbursed to Directors, upon submission of suitable justification. In making such expenses, the Directors should take into account the Board Member Expense Policy.
The remuneration of the Chairman of the Board of Directors is determined at the beginning of his term of office, and is set for the duration of such term. On the motion of the Nomination and Remuneration Committee, it is determined by the Board subject to approval by the Annual General Meeting.
In making its proposal, the Committee should consider a clear description of the duties of the Chairman, the professional profile that has been attracted, the time expected to be effectively available for the Group, and an adequate remuneration corresponding to the formulated expectations and regularly benchmarked with a selected panel of relevant publicly traded industrial Belgian and international references. The Chairman, when attending or chairing the meetings of a Board Committee, will not be entitled to any additional remuneration as this is deemed to be included in his global remuneration package.
Executive managers
The main elements of the Group's executive remuneration policy are a base remuneration, a short-term and a long-term variable remuneration, a pension contribution and various other components. The Group offers competitive total remuneration packages with the objective to attract and retain the best executive and management talent in every part of the world in which the Group is operating.
The remuneration of the executive managers is regularly benchmarked with a selected panel of relevant publicly traded industrial Belgian and international references.
A strong focus on performance and achievements at Group and individual level is reflected in the short-term variable remuneration program, which is directly linked to the annual business objectives. The Group's long-term variable remuneration program aims at rewarding managers and executives for their contribution to the creation of enhanced shareholder value over time. This program is typically linked to the Company’s longer term performance and to the future appreciation of the Company's shares.
The remuneration package of the Chief Executive Officer consists of a base remuneration, a short-term and a long-term variable remuneration, a pension contribution and various other components. The remuneration package aims to be competitive and is aligned with the responsibilities of a Chief Executive Officer leading a globally operating industrial group with various business platforms.
The Nomination and Remuneration Committee recommends each year a set of objectives directly derived from the business plan and from any other priorities to be assigned to the Chief Executive Officer. These objectives include both Group and individual financial and non-financial targets and are measured over a predetermined time period (up to three years). Those objectives, and the year-end evaluation of the achievements, are documented and submitted by the Committee to the full Board. The final evaluation leads to an assessment, based on measured results, by the Board of Directors of all performance related elements of the remuneration package of the Chief Executive Officer.
The remuneration package of the BGE members other than the Chief Executive Officer consists of a base remuneration, a short-term and long-term variable remuneration, a pension contribution and various other components. The remuneration package aims to be competitive and is aligned with the role and responsibilities of each BGE member, being a member of a team leading a globally operating industrial group with various business platforms. The Chief Executive Officer evaluates the performance of each of the other members of the BGE and submits his assessment to the Nomination and Remuneration Committee. This evaluation is done annually based on documented objectives directly derived from the business plan and taking into account the specific responsibilities of each BGE member. The achievements measured against those objectives will determine all performance-related elements of the remuneration package of each BGE member other than the Chief Executive Officer. The objectives include both Group and individual financial and non-financial targets and are measured over a predetermined time period (up to three years).
The actual amount of the remuneration of the Chief Executive Officer and the other members of the BGE is determined by the Board of Directors acting on a reasoned recommendation from the Nomination and Remuneration Committee.
The long-term variable remuneration component for the Chief Executive Officer and the other BGE members exists of the offer of a variable amount of stock options under a share option plan and the grant of a fixed amount of performance share units under a performance share plan.
In March 2016, the Company introduced a Personal Shareholding Requirement Plan for the Chief Executive Officer and the other members of the BGE, pursuant to which they are required to build and maintain a personal shareholding in Company shares and whereby the acquisition of the required number of Company shares is supported by a so-called Company matching mechanism. The Company matching mechanism originally provided that the Company would match the BGE member’s investment in Company shares in year x, with a premium (to be paid out at the end of year x +2) which should then be used by the BGE member to invest in Company shares. On the motion of the Board of Directors and subject to the approval by the Extraordinary General Meeting of Shareholders of 29 March 2017, this Company matching mechanism will be amended (with retroactive effect as of the start of the Personal Shareholding Requirement Plan) in such a way that the Company will match the BGE member’s investment in Company shares in year x, with a direct grant of a similar number of Company shares as acquired by the BGE member (such grant to be made at the end of year x + 2).
3. Remuneration of the Directors in respect of 2016
The amount of the remuneration and other benefits granted directly or indirectly to the Directors, by the Company or its subsidiaries, in respect of 2016 is set forth on an individual basis in the table below.
The remuneration of the Chairman for the performance of all his duties in the Company was a set gross amount of € 250 000.
The remuneration of each Director, except the Chair, for the performance of the duties as a member of the Board was a set amount of € 42 000, and an amount of € 4 200 for each meeting of the Board attended in person (with a maximum of € 25 200 for six meetings per year).
The remuneration of the Chair of the Audit and Finance Committee, in the capacity as Chair and member of such a Committee, was an amount of € 4 000 for each Committee meeting attended in person.
The remuneration of each Director, except the Chairman and the Chief Executive Officer, for the performance of his duties as a member of a Board Committee was an amount of € 3 000 for each
Committee meeting attended in person.
in € |
Set amount |
Amount for Board
attendance |
Amount for Committee
attendance |
Total |
Chairman |
Bert De Graeve |
250 000 |
|
|
250 000 |
Board members |
Celia Baxter
|
21 000 |
16 800 |
3 000 |
40 800 |
Alan Begg |
42 000 |
25 200 |
6 000 |
73 200 |
Leon Bekaert |
42 000 |
25 200 |
12 000 |
79 200 |
Grégory Dalle |
42 000 |
25 200 |
0 |
67 200 |
Charles de Liedekerke |
42 000 |
25 200 |
12 000 |
79 200 |
François de Visscher |
21 000 |
8 400 |
0 |
29 400 |
Christophe Jacobs van Merlen
|
21 000 |
16 800 |
12 000 |
49 800 |
Hubert Jacobs van Merlen |
42 000 |
25 200 |
22 000 |
89 200 |
Maxime Jadot |
42 000 |
25 200 |
12 000 |
79 200 |
Pamela Knapp
|
21 000 |
16 800 |
12 000 |
49 800 |
Lady Barbara Judge CBE |
21 000 |
8 400 |
11 000 |
40 400 |
Martina Merz
|
21 000 |
16 800 |
6 000 |
43 800 |
Mei Ye |
42 000 |
25 200 |
0 |
67 200 |
Matthew Taylor |
42 000 |
25 200 |
0 |
67 200 |
Bernard van de Walle de Ghelcke |
21 000 |
8 400 |
0 |
29 400 |
Emilie van de Walle de Ghelcke
|
21 000 |
16 800 |
0 |
37 800 |
Baudouin Velge |
21 000 |
8 400 |
6 000 |
35 400 |
Henri Jean Velge
|
21 000 |
16 800 |
0 |
37 800 |
Manfred Wennemer |
21 000 |
8 400 |
6 000 |
35 400 |
Total Directors' Remuneration |
1 281 400 |
4. Remuneration of the Chief Executive Officer in respect of 2016 in his capacity as a Director
In his capacity as a Director, the Chief Executive Officer is entitled to the same remuneration as the non-executive Directors, except the remuneration for attending Board Committee meetings for which he receives no compensation (cf. the table above). The remuneration received by the Chief Executive Officer as a Director is included in the base remuneration mentioned in the table in section 6 below.
5. Performance-related remuneration: criteria, term and method of performance evaluation
The remuneration package of the Chief Executive Officer and the other members of the BGE comprises the following performance related elements:
- a short-term variable remuneration, with objectives related to the annual business plan. The objectives are set at the beginning of the year by the Nomination and Remuneration Committee and are approved by the Board. Those objectives include a weighted average of both Group and individual financial and non-financial targets which are relevant in evaluating annual financial performance of the Group and progress achieved against the agreed strategic objectives; they are evaluated annually by the Board. One third of the annual short-term variable remuneration of the Chief Executive Officer is deferred over a period of twenty-four months; no deferral is applicable for the other members of the BGE.
- a long-term variable remuneration, in the form of:
- the offer of a variable amount of stock options;
- the grant of a fixed amount of performance share units which will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target.
Detailed information regarding the criteria, terms and method of performance evaluation for the long-term variable remuneration can be found in section 8 below.
At par level, the value of the variable remuneration elements of the Chief Executive Officer and the other members of the BGE exceeds 25% of their total remuneration. More than half of this variable remuneration is based on criteria over a period of minimum three years.
6. Remuneration of the Chief Executive Officer in respect of 2016
The amount of the remuneration and other benefits granted directly or indirectly to the Chief Executive Officer, by the Company or its subsidiaries, in respect of 2016 for his Chief Executive Officer role is set forth below.
Matthew Taylor
|
Remuneration(1) |
Comments |
Base remuneration |
€ 750 226
|
Includes Belgian base remuneration as well as Belgian and foreign director fees(2) |
Short-term variable remuneration |
€ 636 694
|
Annual variable remuneration, based on 2016 performance(3)
|
Mid-term variable remuneration |
€ 181 913
|
Mid-term variable remuneration, based on 2014-2016 performance(4)
|
Long-term variable remuneration:
- Stock option grant
- Performance share units
|
25 000 options
16 500 units
|
Number of stock options granted
Number of performance share units granted
|
Pension |
€ 151 594
|
Defined Contribution Plan |
Other remuneration elements |
€ 53 083
|
Includes company car and risk insurances |
(1) In respect of 2016.
(2) The base remuneration includes the remuneration received by the Chief Executive Officer in his capacity as a Director.
(3) This does include the deferred annual variable remuneration based on 2016 performance.
(4) The mid-term plan was replaced by the new long term incentive plans end of 2015.
7. Remuneration of the other Bekaert Group Executive members in respect of 2016
The amount of the remuneration and other benefits granted directly or indirectly to the BGE members other than the Chief Executive Officer, by the Company or its subsidiaries, in respect of 2016 is set forth below on a global basis.
|
Remuneration(1) |
Comments |
Base remuneration |
€ 2 722 139
|
Includes Belgian base remuneration as well as Belgian and foreign director fees |
Short-term variable remuneration |
€ 2 016 603
|
Annual variable remuneration, based on 2016 performance |
Mid-term variable remuneration |
€ 459 333
|
Mid-term variable remuneration, based on 2014-2016 performance(2) |
Long-term variable remuneration:
- Stock option grant
- Performance share units
|
66 250 options
22 500 units |
Number of stock options granted
Number of performance share units granted |
Pension |
€ 441 401
|
Defined Contribution and Defined Benefit Plan |
Other remuneration elements |
€ 153 264
|
Includes : company car and risk insurances |
(1) In respect of 2016.
(2) The mid-term plan was replaced by the new long term incentive plans end of 2015.
8. Stock Options and Performance Share Units for Executive Management granted in 2016
The number of performance share units and the number of stock options granted to the Chief Executive Officer and the other members of the BGE in 2016, and the number of options exercised by them or forfeited in 2016 are set forth on an individual basis in the table below.
The stock options granted to the Chief Executive Officer and the other BGE members in 2016 are based on the SOP2015-2017 plan that was proposed by the Board of Directors and approved by a Special General Meeting in 2015. The plan offers options to acquire existing Company shares. There is one regular offer of options in December in each of the years 2015 through 2017, and the options are granted on the sixtieth day following the date of their offer (i.e. in February of the following year). The aggregate number of options to be offered is determined each year by the Board of Directors on the motion of the Nomination and Remuneration Committee. The number of options to be offered to each individual beneficiary is variable in part, based on an assessment of such person’s long-term contribution to the success of the Company. The options are offered to the beneficiaries free of charge. Each accepted option entitles the holder to acquire one existing share of the Company against payment of the exercise price, which is conclusively determined at the time of the offer and which is equal to the lower of: (i) the average closing price of the Company shares during the thirty days preceding the date of the offer, and (ii) the last closing price preceding the date of the offer.
The exercise price of the regular stock options offered in December 2015 and granted in February 2016 is € 26.375 per share.
Subject to the closed and prohibited trading periods and to the plan rules, the options can be exercised as from the beginning of the fourth calendar year following the date of their offer until the end of the tenth year following the date of their offer.
The stock options that were exercisable in 2016 are based on the initial three grants of the SOP2010-2014 plan and on the predecessor plans to the SOP2010-2014 plan. The terms of the earlier plans are similar to those of the SOP2015-2017 plan, but the options that were granted to employees under the predecessor plans to the SOP2010-2014 plan took the form of subscription rights entitling the holders to acquire newly issued Company shares, while self-employed beneficiaries are entitled to acquire existing shares as in the SOP2010-2014 plan.
The performance share units granted in 2016 to the Chief Executive Officer and the other members of the BGE are based on the Performance Share Plan 2015-2017 that was proposed by the Board of Directors and approved by a Special General Meeting in 2015. The plan offers rights with respect to Company shares to the members of the BGE, the senior management and a limited number of management staff members of the Company and a number of its subsidiaries (the rights, “performance share units” and the shares, “performance shares”). Each performance share unit entitles the beneficiary to acquire one performance share subject to the conditions of the Performance Share Plan 2015-2017. These performance share units will vest following a vesting period of three years, conditional to the achievement of a pre-set performance target. The performance target is set annually by the Board of Directors, in line with the Company strategy. The precise vesting level of the performance share units will depend upon the actual achievement level of the vesting criterion, with no vesting at all if the actual performance is below the defined minimum threshold. Upon achievement of said threshold, there will be a minimum vesting of 50% of the granted performance share units; full achievement of the agreed vesting criterion will lead to a par vesting of 100% of the granted performance share units, whereas there will be a maximum vesting of 300% of the granted performance share units if the actual performance is at or above an agreed ceiling level. In between these levels, the vesting will be proportionate. Upon vesting, the beneficiaries will also receive the value of the dividends relating to the previous three years with respect to such (amount of) performance shares to which the effectively vested performance share units relate. It is foreseen that there is one performance share unit grant in each of the years 2015 through 2017, and the aggregate number of performance share units to be offered is determined each year by the Board of Directors on the motion of the Nomination and Remuneration Committee. The performance share units are granted to the beneficiaries for free.
Name |
Number of perfomance share units granted in 2016 |
Number of stock options granted in February 2016 |
Number of stock options exercised in 2016 |
Number of stock options forfeited in 2016 |
Matthew Taylor |
16 500 |
25 000 |
- |
- |
Beatríz García-Cos
|
5 000 |
-
|
- |
- |
Lieven Larmuseau
|
2 500 |
10 000 |
26 200 |
- |
Geert Van Haver |
2 500 |
10 000 |
17 000
|
- |
Piet Van Riet |
2 500 |
10 000 |
10 800 |
- |
Curd Vandekerckhove
|
2 500 |
10 000
|
20 000 |
- |
Frank Vromant
|
2 500 |
10 000 |
13 400 |
- |
Bart Wille
|
2 500 |
10 000 |
10 000 |
- |
Stijn Vanneste
|
2 500
|
6 250
|
3 600 |
|
9. Severance pay for Executive Management
Belgian law and normal practice are the basis for the severance arrangements with the executive managers, except for the Chief Executive Officer, the Chief Financial Officer and the Chief Human Resources Officer, whose contractual arrangements, entered into at the time of their appointment, provide for a notice period of twelve months.
10. Departure of Executive Managers
No member of the Executive Management left the Group in 2016.
11. Company’s right of reclaim
There are no provisions allowing the Company to reclaim any variable remuneration paid to Executive Management based on incorrect financial information.