Commentary on 2007 remuneration

Base salary

In 2007, base salary levels were benchmarked against those paid in other major global companies based in Europe, excluding companies in the financial sector. The Committee decided not to increase base salaries for 2007 and to place greater emphasis on performance-based pay.

Annual incentive

The annual incentive awards for 2007 were subject to achievement of underlying sales growth and trading contribution targets in combination with individual key strategic business targets. The Committee measured the results against the targets set and determined the annual incentive amounts for 2007.

Long-term incentive arrangements

• Global Share Incentive Plan
  The first award was made in 2007 with a performance period 2007-2009. Vesting will be in 2010.
• Global Performance Share Plan
  The performance period for the first awards made under the plan ended on 31 December 2007. Vesting will be in May 2008 (three years after award).
• TSR Plan
  In 2007 the conditional shares awarded in 2004 lapsed. Vesting was based on the TSR performance of Unilever (when ranked against its defined peer group with competitors) over the three-year performance period which ended 31 December 2006. For this period, Unilever was ranked 13th in its peer group and therefore no vesting occurred for this award and the shares lapsed in March 2007.
• Share Matching Plan
  In 2007 the matching shares originally granted in 2004 on a conditional basis vested, subject to fulfilment of the retention conditions.
• Executive Share Options
  The grants of executive share options made in 2004 became exercisable as from 2007. As the 2004 grant was based on Unilever’s EPS performance, the options at vesting were subject to no further conditions.

Pensions

The Netherlands all-employee pension plan benefit basis was changed from final salary to career average earnings at 31 December 2006. This had a small impact on the accrued pension of the Netherlands-based Executive Director.

During 2007 individual contributions paid by Executive Directors in the UK were paid through salary sacrifice arrangement.

Read the rest of the Summary remuneration report - Non-Executive Directors