Remuneration Committee

Remuneration Committee main 2020 activities

Q1 2020 activities

• Review of management performance 2019
• Approval of 2019 pay-out under Short-term Incentive Plan and vesting of shares under Long-term Incentive Plan
• Review of management base salaries for 2020
• Target setting 2020
• Review of preliminary grant of performance shares under Long-term Incentive Plan
• 2019 Remuneration report

Q2 & Q3 2020 activities

• Review of Short-term Incentive Plan, Performance Incentive Plan and Long-term Incentive Plan
• Review Remuneration Policy for Board of Management and Supervisory Board

Q4 2020 activities

• Review Remuneration Policy for Board of Management and Supervisory Board
• Shareholder consultation sessions in light of the Remuneration Policy review
• Review of 2020 (preliminary) performance outlook

Management performance review

The work of the Remuneration Committee during Q1 focused on 2020 performance, the individual performance reviews of Board of Management members and of the Executive Committee. The Remuneration Committee also reviewed various incentive plans in light of COVID-19, the economic circumstances and the relative performance compared with top peers.

Remuneration Policy review

In 2020, the Remuneration Committee and Supervisory Board reviewed the Remuneration Policies for the Board of Management and Supervisory Board to assess if they were still in line with the company’s strategy and financial targets, as well as considering the input received from stakeholders and the requirements of the Shareholder Rights Directive II and the Dutch provisions implementing the Shareholder Rights Directive II. The Remuneration Committee recommended the amendment of the Remuneration Policies for the Board of Management and the Supervisory Board for consideration by the shareholders at the AGM of April 23, 2020. During the year, the Remuneration Committee further evaluated the Remuneration Policies in line with AkzoNobel’s new Grow & Deliver strategy beyond 2020, while also considering the input received from stakeholders and the requirements of the Shareholder Rights Directive II and the Dutch provisions implementing the Shareholder Rights Directive II. As a result, new policies were prepared for consideration by the shareholders at the AGM in 2021.

Management salary review

The Remuneration Committee reviewed the base salaries and established relevant forward-looking target ranges for variable remuneration of Board of Management members and other members of the Executive Committee. The base salaries will continue to be assessed in light of market conditions, the reward structures of peer group companies and performance. The Remuneration Committee considered the pay ratios within the company and how these compare with peer group companies. Forward-looking target ranges for variable remuneration of the Board of Management were discussed and proposals for the remuneration of other Executive Committee members were reviewed and discussed with the CEO.