CEO REMUNERATION IN EUROPECEO REMUNERATION IN BELGIUM

PRESS INFORMATION

1STUDY & SAMPLE

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ABOUT THE STUDY

Conducted by Vlerick’s Executive Remuneration Research CentreYearly studyBased on analysis of annual/remuneration reportsFocus:

Remuneration levels: total, fixed, short-term incentives, long-term incentivesRemuneration structure:

Proportion fixed, short-term incentives, long-term incentivesDesign of share-based remuneration

Remuneration drivers:KPIs used in short-term incentivesImportance of size, country, performance

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THE SAMPLE

650

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CEO REMUNERATION INSTRUMENTS

Fixed remuneration

Long-term incentives

Short-term incentives

VARIABLE

TOTAL

REM.

2CEO REMUNERATION IN EUROPE

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TOTAL CEO REMUNERATION

Firm size2012(2007)

<500 mio. € Between 500 mio.

and 1 bio. €

Between 1 bio. and 5

bio. €

> 5 bio. €

Belgium 530.000(410.000)

860.000(n/o)

980.000(630.000)

1.980.000(2.390.000)

France 250.000(380.000)

530.000(400.000)

1.090.000(1.490.000)

2.290.000(3.160.000)

Germany 760.000(n/o)

n/o(n/o)

1.235.000(1.730.000)

3.100.000(3.340.000)

Netherlands 480.000(n/o)

860.000(830.000)

875.000(1.330.000)

2.470.000(2.920.000)

UK n/o(n/o)

n/o(n/o)

2.950.000(n/o)

4.710.000(n/o)

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CEO REMUNERATION STRUCTURE

Fixed-STI-LTI (in terms of total remuneration)

2012

Belgium 70%-21%-9%

France 66%-23%-11%

Germany 41%-39%-20%

Netherlands 61%-22%-17%

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CEO REMUNERATION STRUCTURE

% fixed in total

2007 2012

Belgium 59% 70%

France 47% 66%

Germany 33% 42%

Netherlands 46% 61%

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CEO REMUNERATION STRUCTURE

% STI in terms of fixed remuneration (total assets)

Belgium France Germany Nether-lands

UK

0,5–1 bio. € 58% 58% n/o 50% n/o

1–5 bio. € 51% 74% 83% 49% 90%

> 5 bio. € 61% 100% 122% 59% 102%

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SHARE-BASED REMUNERATION

Belgium

Fran

ce

German

y

Nethe

rland

s0%

10%20%30%40%50%60%70%80%

45%45%

26%

72%

24% 23%

50%49%

20072012

% o

f firm

s gr

anti

ng s

hare

-ba

sed

rem

uner

atio

n

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SHARE-BASED REMUNERATION

Type of share-based remuneration

2007 2012

Stock options – time-based vesting

27% 15%

Stock options – performance-based vesting

6% 9%

Shares – time-based vesting 8% 7%

Shares – performance-based vesting

13% 20%

3CEO REMUNERATION IN BELGIUM

14

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TOTAL CEO REMUNERATION

2007 2012 Difference

Bel-20 1.780.000 1.610.000 -11%Bel-Mid 830.000 740.000 -12%

Bel-Small 410.000 540.000 +31%

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CEO REMUNERATION STRUCTURE

% fixed-STI-LTI 2007 2012

Bel-20 37%-26%-30% 56%-20%-16%

Bel-Mid 50%-38%-0% 65%-35%-0%

Bel-Small 76%-22%-0% 80%-15%-0%

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SHARE-BASED REMUNERATION

Bel-20 Bel-Mid Bel-Small0%

10%20%30%40%50%60%70%80%90% 85%

40%

22%

53%

12%17%

20072012

% g

rant

ing

shar

e-ba

sed

rem

uner

atio

n

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SHARE-BASED REMUNERATION

Type of share-based remuneration

2007 2012

Stock options – time-based vesting

44% 25%

Stock options – performance-based vesting

5% 0%

Shares – time-based vesting 7% 4%

Stock options – performance-based vesting

2% 3%

4WHAT DRIVES CEO REMUNERATION?

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USE OF KPIS IN SHORT-TERM INCENTIVE SYSTEMS

Financial Non-financial0%

10%20%30%40%50%60%70%80%90%

100% 99%

45%

99%

56% 20112012

% o

f firm

s

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WHAT DRIVES TOTAL CEO REMUNERATION?

Total assets Country Return on assets

0%

20%

40%

60%

80%

100%

20072012

% o

f ex

plai

ned

vari

ance

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CHANGE IN STI – MATCHED SAMPLE