The 2011 Annual General Meeting of shareholders approved a second amendment to the remuneration policy consisting of the introduction of a minimum shareholding requirement and related matching scheme. As of 2011, the CEO and other members of the Board of Management will be required to build up, over a five-year period from the date of appointment, and then hold, at least three times respectively one time their gross base salary in AkzoNobel shares for the duration of their tenure as member of the Board of Management.
The CEO and other Board members are expected, for these purposes, to use both their long-term incentive and their short-term incentive in the manner set out below.
Board members who have not yet achieved this minimum holding requirement are required to invest one third of the short-term incentive they receive (net after tax and other deductions) in AkzoNobel shares. As further encouragement to build up the minimum holding requirement, Board members who invest a second third of their short-term incentive in shares will have such shares matched by the company, one on one, after three years from the date of purchase of the shares (up to a maximum of one third of the short-term incentive), on the condition that the Board member still holds these shares and showed a sustained performance during the three-year period. The Supervisory Board will use its discretion to decide whether this last condition has been met.
Board members who continue to invest their short-term incentives in whole, or in part, in shares after the minimum holding requirement has been reached will have the opportunity to have such shares matched subject to the same conditions, except that such shares will be matched with one share to every two shares thus acquired, up to a maximum of two-thirds of the short-term incentive.
Shares under the performance share plan are taken into account for share ownership purposes as soon as they have become unconditional. This includes vested shares that are to be retained for another two years after vesting.