Introduction by the Chairwoman of the Compensation Committee
On behalf of the Board of Directors of GF and of the Compensation Committee, I am pleased to present the 2016 compensation report.
In 2015, the Compensation Committee approved a new long-term share-based incentive plan as detailed in chapter Architecture of Compensation. The plan became effective as per 1 January 2016. One of the proxy advisors recommended to vote against the approval of the compensation report 2015. The target for the newly introduced key performance indicator Earnings per Share (EPS) for the performance shares was deemed not challenging enough, and executives still receive a large portion of non-performance based share awards. In addition, said proxy adviser would prefer as performance indicator Total Shareholder Return (TSR).
Despite this recommendation, the Board unanimously and strongly believes that the performance share scheme of GF aligns pay-for-performance with shareholder interests in a way which is best adapted to the company situation. The details regarding this topic can be found in chapter Architecture of Compensation, under "Note: Performance Shares”.
However, the Compensation Committee and the Board of Directors are commited to continue to review the compensation programs in line with best market practices, taking into account the input received from our shareholders and the various proxy advisors.
At the upcoming Annual Shareholders’ Meeting, we will ask you to approve, as last year, prospectively in a binding vote the maximum amounts of compensation for the Board of Directors until the next Annual Shareholders’ Meeting, and for the next business year, the maximum amount of compensation for the Executive Committee.
We always welcome comments on our compensation systems, and we trust that you will find this report interesting and informative.
Chairwoman of the Compensation Committee