Shareholders Want CEO’s Pay Cut

Sep 11, 2003

By George Anderson reports the two largest pension funds in the Netherlands with significant share holdings in Ahold want the retailer’s new chief executive officer’s, Anders Moberg,
compensation package reduced.

The two funds, ABP and PGGM, say they have no problem with Moberg as the chief executive but take issue with his package, which include a base salary of 1.5 million Euros and
bonuses and share options totaling another 10 million.

The top executives with the funds, ABP’s Jean Frijns and PGGM’s Roderick Munsters sent a letter to Ahold chairman Henny de Ruiter outlining two objections they had to Mr. Moberg’s

The first was putting approval of the package on the agenda of the shareholder’s meeting without advance notice.

The second was to the package itself. “A business with good corporate governance has a clear, transparent and testable remuneration policy that is supported by the shareholders…
Your policy is clearly not compatible”, the pension funds’ leaders wrote.

Moderator’s Comment: What are your thoughts on Ahold’s handling of Anders Moberg’s compensation package and your
perspective on executive compensation in general?

Talk about snatching defeat out of the hands of victory. This was a stakeholder relations blunder to heap on all those that have preceded it at Ahold.

According to reports, Mr. Moberg threatened to resign if the package was not approved as is. The Ahold board should not have put the package before the
shareholders if it was not ready to part with Mr. Moberg in the case of a vote against it. With no advance warning, many shareholders felt obligated to vote yes but under protest.

Anderson – Moderator

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