Chapters
Annual Report 2019

Remuneration report

The objective of GrandVision’s remuneration policy is to attract, motivate and retain management that is qualified to lead an international company of GrandVision’s size by means of a market-compliant policy.

GrandVision’s Remuneration Report will begin with a summary of two significant changes that took place in 2019.

Firstly, the adoption of a new Remuneration Policy of GrandVision N.V. for the Management Board Directors and the Supervisory Board Directors, as approved by the General Meeting of shareholders on 4 November, 2019, and effective per 1 January, 2019. Secondly, the proposed transaction of EssilorLuxottica to acquire HAL’s 76.72% interest in GrandVision. This envisaged transaction had a direct effect on the Remuneration Policy 2019 that was proposed at the General Meeting.

The amendments in the Remuneration Policy 2019 can be divided in three categories.

The first category of amendments brought the Remuneration Policy 2019 in line with new Dutch legislation that implemented the European Shareholders Rights Directive. These amendments included linking remuneration of the Managing Director to the long-term value creation and sustainability of GrandVision and requiring the inclusion of financial and non-financial metrics to which performance-based remuneration is linked as well as a clear explanation of how these align with our business strategy.

The second category of amendments brought the Remuneration Policy 2019 in line with market practices. This was a result of a review of the remuneration packages for GrandVision senior executives to align with best practices and with the intention to simplify arrangements for members of our Senior Management Team, including the Managing Directors.

GrandVision used the services of external executive remuneration consultancy Mercer for these purposes. Using both policy and quantum benchmarking against two peer groups − a subset of the AEX and listed European specialty retailers − it was found that both STI and LTI award possibilities lagged behind the market and at times fell significantly behind on a comparable basis.

As a result, changes were made to the remuneration of GrandVision senior executives. For the Management Board Directors and the Supervisory Board Directors, this is managed by the Remuneration Policy 2019. The remuneration of the Supervisory Board Directors remained in line with previous years while adjustments were made to the Management Board of Directors.

The third category of amendments to the Remuneration Policy 2019 was the inclusion of a deviation as set out in the Remuneration Policy for exceptional circumstances and specifically for the Managing Directors, such as a change of control at the Company level.

In case of a change of control, the Managing Directors can be entitled to a cash retention bonus and a risk compensation fee, of up to one time the full maximum annual remuneration package. In case both the cash retention bonus and risk compensation fee are awarded the maximum amount is limited to two times their full maximum annual remuneration package.

The envisaged transaction between EssilorLuxottica and HAL constitutes such a change of control. In the period leading up to a change of control as well as the period thereafter, it is essential to retain the Managing Directors, who both were recruited for the roles as CEO and CFO of an independent public listed company and whose roles and responsibilities and management scope are at significant risk of being changed after the transaction, as they play a key role in ensuring full continuity of all business operations as well as a smooth and successful transaction. In the opinion of the Supervisory Board, these circumstances justify the inclusion of these deviations from the remuneration policy.

Based on above the Supervisory Board decided to apply the deviations set forth in the Remuneration Policy 2019 and offer Borchert and Eelman a cash retention bonus and risk compensation fee. Furthermore, the Supervisory Board decided to deviate from (i) the two-year holding period as stated in paragraph 5.4.1.4 of this Remuneration Policy and the LTIP 2015 and (ii) the performance conditions as stated in paragraph 5.4.1.5 of this Remuneration Policy and LTIP 2015.