Remuneration Report

Remuneration Report

Description of the procedure used in 2011 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 Meeting of 11 May 2011.

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 Bekaert Group Executive other than the Chief Executive Officer is determined by the Board of Directors 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 Bekaert Group Executive member with the Company reflects the remuneration policy. A copy of each such contract is available to any director upon request to the Chairman.

Statement of the remuneration policy used in 2011 for the non-executive Directors and executive management

Non-executive Directors

The 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. The Chairman of a Committee receives double the amount of such fee, except if he is also the Chairman of the Board of Directors.

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 variable 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 as described above in respect of Board or Committee meetings attended in person.

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 standards applicable within the Group.

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 remuneration can comprise a cash remuneration as well as a deferred income scheme. 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.

PAGE-BREAK

 

Executive managers

The main components of the Group's executive remuneration policy are base salary, short term and long term incentives, and benefits. 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, Team and Individual level is reflected in all short term incentives. Those incentives should provide appropriate bonus opportunities (such as an annual bonus), which are directly linked to the business objectives.

The Group's long term incentives programs aim to reward managers and executives for their contribution to the creation of enhanced shareholder value over time. Those programs are typically linked to the Company’s longer term performance and to the future appreciation of the Company's shares.

The annual remuneration package of the Chief Executive Officer consists of a base salary, short and long term incentives, and benefits. The overall remuneration package, including benefits, aims to be competitive and is aligned with the responsibilities of a Chief Executive Officer leading a globally operating industrial group with various business applications.

The Nomination and Remuneration Committee recommends each year a set of key performance indicators (KPI's) directly derived from the business plan and based on any other priorities assigned to the Chief Executive Officer by the Board of Directors. The KPI’s include both Group and individual financial and non-financial targets and are measured over a predetermined time period (up to three years). Those KPI's and the evaluation of the achievements are documented and submitted to the Nomination and Remuneration Committee and to the Board. The final evaluation leads to a an assessment, based on measured results, by the Board of Directors of all performance-related compensation elements as specified in the remuneration package of the Chief Executive Officer.

The annual remuneration package of the Bekaert Group Executive members other than the Chief Executive Officer consists of base salary, short and long term incentives, and benefits. The overall remuneration package, including benefits aims to be competitive and is aligned with the role and responsibilities of each Bekaert Group Executive member, being a member of a team leading a globally operating industrial group with various business applications.

The Chief Executive Officer evaluates the performance of each of the other members of the Bekaert Group Executive and submits his assessment to the Nomination and Remuneration Committee. This evaluation is done annually based on documented KPI's directly derived from the business plan and taking into account the specific responsibilities of each Bekaert Group Executive member.

The achievements measured against those KPI's will determine all performance-related compensation elements of the remuneration package of each Bekaert Group Executive member other than the Chief Executive Officer. The KPI’s 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 Bekaert Group Executive is determined by the Board of Directors acting on a reasoned recommendation of the Nomination and Remuneration Committee.

PAGE-BREAK

Remuneration of the non-executive Directors in 2011

The amount of the remuneration and other benefits granted directly or indirectly to non-executive Directors, by the Company or its subsidiaries, is set forth on an individual basis in the table below.

Remuneration of the Chief Executive Officer 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). Any compensation received by the Chief Executive Officer as a Director is included in his base salary.

Performance-related remuneration: criteria, term and method of performance evaluation

The remuneration package of the Chief Executive Officer and the other members of the Bekaert Group Executive comprises three performance related elements:

  • an annual bonus, with KPI’s related to the annual business plan. Those KPI’s include both Group and individual financial and non-financial targets and are evaluated annually by the Board;
  • a mid-term bonus, with KPI’s related to the X+3 business plan. Those KPI’s measure Bekaert’s absolute performance against the agreed three-year plan, as well as its relative performance against a relevant panel of other companies. The achievement of those KPI’s is evaluated by the Board at the end of the three-year period;
  • the offer of a variable amount of stock options where the actual number of stock options to be offered to each individual beneficiary is determined by the Board of Directors on the motion of the Nomination and Remuneration Committee and is variable in part, based on the measurement of pre-agreed indicators that are related to the person’s long term contribution to the success of the Company.
    PAGE-BREAK

Remuneration of the Chief Executive Officer in 2011 (1)

The contract between the present Chief Executive Officer and the Company was executed on 18 January 2006.

The amount of the remuneration and other benefits granted directly or indirectly to the Chief Executive Officer, by the Company or its subsidiaries, is set forth below.

   in thousands of € Comments
Bert De Graeve    
Fixed remuneration  831 Includes Belgian fixed fees and all Belgian and foreign director fees
Variable remuneration  715 Annual bonus and X+3 bonus paid in 2011 (based on past performance). 
Form of payment: cash
Pension  162  
Other remuneration elements  75.5 Includes: company car (51k)  and risk insurances (24.5k)
Number of stock options granted  30 000 Options

(1) Disclosed fixed remuneration includes board fees received as member of Board of NV Bekaert SA

Remuneration of the other Bekaert Group Executive members in 2011 (4 FTE's)

The amount of the remuneration and other benefits granted directly or indirectly to the Bekaert Group Executive members other than the Chief Executive Officer, by the Company or its subsidiaries, is set forth below on a global basis.

   in thousands of € Comments
Fixed remuneration 1549 Includes Belgian fixed fees and all Belgian and foreign director fees
Variable remuneration 1387 Annual bonus and X+3 bonus paid in 2011 (based on past performance). 
Form of payment is partly in cash, and partly in a group insurance,
up to the applicable tax limit
Pension  199  
Other remuneration elements  84 Includes: company car and risk insurances

Stock options for executive management

The number of stock options granted to the Chief Executive Officer and the other members of the Bekaert Group Executive, exercised by them or forfeited in 2011 is set forth on an individual basis in the table below.

  Number of options granted  Number of options exercised Number of options forfeited
Bert De Graeve 30 000 24 000   
Bruno Humblet 21 000
Dominique Neerinck 15 000
Geert Roelens 10 000  44 500
Henri-Jean Velge 16 500
Frank Vromant 9 000

Other than the stock options referred to above, no shares or rights to acquire shares are granted to the Chief Executive Officer or to any other member of the Bekaert Group Executive.
PAGE-BREAK



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 and the Chief Financial Officer whose contractual arrangements entered into at the time of their appointment provide for notice periods of 24 and 12 months respectively.

Departure of a Bekaert Group Executive member 

Mr Geert Roelens resigned all his positions in the Group in 2011. As such he was not entitled to any severance pay, and his stock options that had not been fully vested at the time of his resignation were forfeited.

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.

  • Share
  • Print