Unilever could face a potential row with shareholders after it emerged that the new boss of the consumer goods company can earn up to €17.4m (£14.9m) this year if he hits maximum targets.
Hein Schumacher, who joined the owner of Marmite, Domestos and Dove in June last year, took home €3.9m for his first six months as chief executive. He earned a €1.86m annual bonus on top of his €1.4m in basic pay and benefits, which included €292,492 to help cover his relocation to the UK, according to Unilever’s annual report published on Thursday.
He was also awarded €648,000 in compensation for long-term bonuses that would have been earned at his previous employer the Dutch dairy co-operative FrieslandCampina.
Schumacher could have earned more. Along with Unilever’s other executives, the group’s compensation committee decided to lower his annual bonus to 115% of salary, down from to 150%, which it should have been after achieving set targets announced last year.
Andrea Jung, the chair of the compensation committee, said it had made the change because while “performance delivered in the year was strong, we believe there is scope to improve our competitiveness”.
She said the committee had concluded the group was “not winning sufficient market share in a number of key markets” and the share price performance was below expectations. The change was “reasonable and aligns the experience of shareholders stakeholders and the executive directors”, it said.
Unilever’s former chief executive Alan Jope and Schumacher earned a combined total of €6.07m last year.
In the year ahead, Schumacher’s fixed annual salary will remain at €1.85m. Unilever promised to keep that figure steady for two years after almost 60% of shareholders voted to reject its remuneration report last year.
However, Schumacher can earn up to €8.5m for hitting basic targets, which are not disclosed, and more than double that if he achieves maximum targets and raises the company’s share price by 50% from the date his bonus shares are granted.
That figure includes an annual bonus worth 225% of his salary – nearly €4.2m – if he hits maximum targets that include undisclosed targets for underlying sales growth and increases in underlying operating profit. He could also collect a further 400% of salary – €7.4m – under a three-year incentive plan that includes targets on return on capital and sustainability as well as sales growth.
Jung said the targets had been tweaked from last year after discussions with shareholders.
“Having undertaken an extensive consultation exercise before finalising the new remuneration policy, the committee believes it can be fully supported by the great majority of our shareholders,” she said.
