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Remuneration Policy and Triple Bottom line (CSR). Ben W. van Dijk September 3rd, 2010. Alignment with DSM’s corporate values and strategy. DSM: A Century of Transformation. Bioterials Biologics. Evolution. Life Science Products. Performance Materials. Petro-chemicals. Customer intimacy.

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Alignment with DSM’s corporate values and strategy

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Alignment with dsm s corporate values and strategy

Remuneration Policy

and Triple Bottom line (CSR)

Ben W. van Dijk

September 3rd, 2010

Alignment with DSM’s corporate values and strategy


Dsm a century of transformation

DSM: A Century of Transformation

BioterialsBiologics

Evolution

Life Science Products

PerformanceMaterials

Petro-chemicals

Customer intimacy

Fertilizers

Coal

1902 1930 1950 1970 1990 2000 2010

Competences

mechanical engineering

chemistry

chemical engineering

polymer technology

material science

adv. organic chemistry

biotechnology


Dsm s strategy vision 2010

Life Sciences

Materials Sciences

DSM’s Strategy Vision 2010

Climate and Energy

Health and

Wellness

Functionality andPerformance

EmergingEconomies

EBAs

Nutrition

Pharma

PerformanceMaterials

PolymerIntermediates

Exploiting strong market positions and technology platforms


Dsm s triple bottom line

Leader 2009 / 2010

DSM’s Triple Bottom Line

  • Social: People

  • Sustainability embedded in our company

  • More diverse workforce

  • Responsible partner in society

Triple Bottom Line

  • Economic: Profit

  • Sustainable value creation for our shareholders and customers

  • CFROI > 8.5%

  • Environmental: Planet

  • Improve eco-footprint throughout the value chain

  • Leader in white biotechnology

Simultaneously creating value along three dimensions


Alignment with dsm s corporate values and strategy

We can’t be successful in a world that fails

People

Planet

Profit

World Food Programme

Climate Change

Nr. 1


New mb remuneration policy dsm

New MB Remuneration policy DSM

  • Design of new MB Remuneration policy started two years ago.

  • Anchor points new policy have been defined, based on consultation of Stakeholders (e.g. Shareholders, Labor Unions, Works council) and external Sustainability/Compensation experts.

  • Crisis has confirmed the direction of the redesign Remuneration policy.

  • Remuneration Policy approved by the AGM on March 31, 2010 (99,9 % in favor).

Alignment with DSM’s corporate values and strategy


Main characteristics of new remuneration policy

Main Characteristics of new Remuneration policy

  • Balanced reflection of DSM’s Strategic direction, Corporate Values and the interests of Stakeholders

  • Sustainability fully embedded in the Remuneration policy

  • Focus on short-term and long-term value creation

  • Acceptable remuneration levels, stimulating the right management behavior

  • Improved transparency and simplicity

  • Full compliance with Corporate Governance requirements

Alignment with DSM’s corporate values and strategy


Key elements of new remuneration policy

Key Elements of New Remuneration Policy

  • Equal distribution of fixed and variable income

  • Equal distribution of short-term and long-term variable income.

  • Sustainability targets nearly 50% of performance measures for short and long term variable income.

  • Variable income linked to measurable performance criteria, predominantly of a long term nature

  • External remuneration benchmarking only every 3 years

  • Stock options abolished, performance shares only

  • Total Direct compensation (base salary plus variable income) approaching the median of the market

  • Competitive position in the labor market secured

Alignment with DSM’s corporate values and strategy


Main elements revised remuneration policy

Main elements revised remuneration policy

Alignment with DSM’s corporate values and strategy


Sti performance measures

STI – Performance Measures

  • DSM has defined value creating performance measures in the area of sustainability

  • For 2010/2011 ‘first tier’ targets have been defined (see below). Further refinements/improvements of targets and weighting will follow at a later point in time (‘second tier’) based on proper evaluation

  • The following shared target areas linked to sustainability have been defined for the STI:

    • ECO+ products – Profitable ECO+ product development, consisting of:

      • Percentage phase transitions ‘Feasibility’ (phase 2) to ‘Development’ (phase 3) that meet ECO+ criteria

      • Percentage of Product Launches that meet ECO+ criteria

    • Energy Consumption Reduction – linked to triple P target of 20% less energy consumption in 2020 compared to 2008

    • Engagement Index – Related to the High Performance (HP) Industry norm

Alignment with DSM’s corporate values and strategy


Lti performance measures

LTI – Performance Measures

  • Managing Board Members will be eligible to performance shares only as part of the Long Term Incentive scheme. Stock options will be abolished

  • Vesting of performance shares (3 years after granting) will be based on:

    • Comparable TSR versus a peer group (50%)

    • Greenhouse Gas Emissions (GHGE) reduction over volume related revenue (50%)

Alignment with DSM’s corporate values and strategy


Alignment with dsm s corporate values and strategy

Unlimited.


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