The pay package of Unilever’s chief executive, Paul Polman, grew by 51% to £10.3m in 2017, and he is in line for a further rise in salary and potential bonuses under an overhaul of executive pay.
Polman’s 2017 pay deal includes a £1m annual salary, £2m bonus and £6.4m in long-term bonus scheme shares, according to the group’s annual report. It marks a big rise on his £6.8m pay package for 2016.
The consumer goods company also revealed plans to raise his total fixed pay, including salary and benefits, by 5% to £1.45m in 2018 under a pay review that could also hand him up to £9.9m in bonuses and shares a year. This would be a 23% rise in the potential for bonuses.
Unilever said its remuneration committee was “of the view that this increased maximum opportunity is fully justified by higher risk and more stretching performance requirements”.
But it risks controversy over pay in the upcoming annual general meeting season.
Unilever said its new pay plans would produce a raft of changes, including the requirement for bosses to invest up to 67% of their annual bonus in Unilever shares, which they need to hold for at least four years.
The remuneration committee added that to earn the maximum pay under the new five-year incentive plan, bosses would have to “deliver truly outstanding performance over the full five years”.
Details of its pay plans follow results for the Anglo-Dutch group earlier this month showing a 9% increase in annual profits to £7.1bn.
Unilever, which is behind household brands such as Dove, Marmite and Ben & Jerry’s ice cream, was boosted by a strong performance in emerging markets.
The group fended off a £115bn takeover attempt from Kraft Heinz last year, after which it offloaded its spreads business for £6bn to the private equity firm KKR.
As part of a rethink after the hostile Kraft approach, Unilever is also reviewing its dual-headed legal structure and is expected to consolidate its headquarters in the UK or the Netherlands.
A decision is expected in the next two weeks amid reports that it could ditch the UK HQ.