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Reckitt Benckiser plc was formed by the merger of Benckiser N.V. and Reckitt & Colman plc.
True
The executive remuneration system at Reckitt Benckiser plc relied strongly on performance-oriented pay.
True
The U.S. CEO of Reckitt Benckiser plc stated that 'The U.S. is about the size of the pie. The U.K. is about the slice of the pie.'
True
The 2001 Annual Report of Reckitt Benckiser plc emphasized the importance of the compensation system to the company's future success.
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Reckitt Benckiser aimed for below industry average net revenue growth in 2002
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Reckitt Benckiser's organic growth rates were between 6% and 7% from 2000 to 2002
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47% of Reckitt Benckiser's revenue in 2002 was generated in Western Europe
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In 2002, net revenues at Reckitt Benckiser grew by 7% to £3,531m
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Reckitt Benckiser's remuneration plan aimed to motivate and retain top managers without adhering to a global remuneration policy
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The compensation plan at Reckitt Benckiser was performance-driven with a maximum bonus of 3 times the target bonus if targets were exceeded
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Reckitt Benckiser used measures like Economic Value Added in its compensation plan
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The company heavily emphasized winning and performance-oriented compensation, rating potential recruits on competency and cultural fit
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Reckitt Benckiser's remuneration plan consisted of two major parts: salary and long-term incentives
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If an executive met all targets, they would receive 40% of their base salary as a bonus, with the possibility of earning up to 140% of base salary if they substantially exceeded all targets
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Reckitt Benckiser's remuneration plan consisted of three major parts: salary, short-term incentives, and long-term incentives
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If none of the goals were met, the variable compensation at Reckitt Benckiser would be 50% of the base salary
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Reckitt Benckiser plc ranked 11th among leading household products/personal care companies based on sales
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The U.K. shareholders approved the use of 2% dilution per year over 5 years for all employee share programs, which exceeded the 75th percentile of the U.S. peer group
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The chairman of the board and the chairman of the Remuneration Committee spent many days talking with U.K. shareholders about the need to exceed normal U.K. levels of dilution
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The Combined Code on Corporate Governance in the U.K. summarized the recommendations of corporate governance committees in the U.K., dating back to the early 1990s
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Reckitt Benckiser plc held a large proportion of shares in the U.K.
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The Procter & Gamble Company had the highest net income among leading household products/personal care companies
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Unilever Group and The Procter & Gamble Company held the top two positions in the global household goods market
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Institutional shareholders in the U.K. were increasingly concerned about executive remuneration plans, as evidenced by protests against remuneration packages of CEOs of other companies such as GlaxoSmithKline, WPP, and Reuters
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Reckitt Benckiser executives and board members were not focused on sustaining incentive compensation programs while meeting changing shareholder expectations and maintaining attractive compensation levels to recruit and retain top managers globally
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U.K. stockholders were not concerned about the valuation of stock options and the length of contracts for senior executives
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Reckitt Benckiser plc was not a part of the global household goods market, ranking third in terms of market share
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Shareholders had not expressed concern about remuneration plans, such as the protest against GlaxoSmithKline CEO's remuneration package and the narrow passing of WPP CEO's compensation contract in a shareholder vote
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Reckitt Benckiser was formed by the merger of Benckiser and Reckitt & Colman.
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Alan Dalby was the CEO of Reckitt Benckiser.
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In 2003, Reckitt Benckiser ranked first in household cleaning products.
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Reckitt Benckiser owned leading brands in personal care products.
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In 2002, sales at Reckitt Benckiser totaled £3.5 billion.
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Reckitt Benckiser had a 2002 profit before taxes of £545 million.
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Reckitt Benckiser's main competitors included The Coca-Cola Company.
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Reckitt Benckiser aimed to increase the contribution of new products to 40% by 2004.
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The company allocated 11% of net revenues to its media budget.
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Reckitt Benckiser's culture reflected 75% from Benckiser and 25% from Reckitt & Colman.
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The merger was not a commercial and financial success.
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Reckitt Benckiser's strategy did not focus on new products and aggressive marketing.
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Short-term incentives at Reckitt Benckiser were based on factors within the manager's control.
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The three criteria used to determine the compensation of a manager were revenue growth, profit growth, and net working capital reduction.
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Long-term pay at Reckitt Benckiser was based on targets related to corporate growth over three years.
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The indicator used for long-term incentives at Reckitt Benckiser was earnings per share (EPS).
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The long-term incentives, paid in options and restricted stock, vested only if the company met the EPS targets.
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The EPS target for partial vesting was 6% growth per annum or 19% over a three-year period.
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The Remuneration Committee set a minimum share ownership policy for Reckitt Benckiser employees to behave like owners.
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Consultants from Bain & Company endorsed Reckitt Benckiser's plan.
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Human Resources worked with the board's Remuneration Committee and with senior managers to formulate and maintain the remuneration policy.
Signup and view all the answers
Members of the Remuneration Committee of the board were referred to as the 'custodians of the compensation strategy'.
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Shareholder approval was required for the remuneration policy at Reckitt Benckiser.
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Reckitt Benckiser directors believed that their performance-based compensation also adhered to provisions of The Code.
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Reckitt Benckiser plc was formed in December 1999 by the merger of Benckiser N.V. and Reckitt & Colman plc.
Signup and view all the answers
The U.S. CEO of Reckitt Benckiser plc stated that 'The U.S. is about the size of the pie. The U.K. is about the slice of the pie.'
Signup and view all the answers
The compensation plan at Reckitt Benckiser was performance-driven with a maximum bonus of 3 times the target bonus if targets were exceeded
Signup and view all the answers
The long-term incentives, paid in options and restricted stock, vested only if the company met the EPS targets.
Signup and view all the answers
Reckitt Benckiser's main competitors included The Coca-Cola Company.
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In 2002, sales at Reckitt Benckiser totaled £3.5 billion.
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Reckitt Benckiser aimed to increase the contribution of new products to 40% by 2004.
Signup and view all the answers
Alan Dalby was the CEO of Reckitt Benckiser.
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Reckitt Benckiser's remuneration plan aimed to motivate and retain top managers without adhering to a global remuneration policy.
Signup and view all the answers
Reckitt Benckiser executives and board members were not focused on sustaining incentive compensation programs while meeting changing shareholder expectations and maintaining attractive compensation levels to recruit and retain top managers globally.
Signup and view all the answers
Reckitt Benckiser plc was not a part of the global household goods market, ranking third in terms of market share.
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In 2003, Reckitt Benckiser ranked first in household cleaning products.
Signup and view all the answers
The merger was not a commercial and financial success.
Signup and view all the answers
Reckitt Benckiser was formed by the merger of Benckiser and Reckitt & Colman.
Signup and view all the answers
Reckitt Benckiser aimed to increase the contribution of new products to 40% by 2004.
Signup and view all the answers
Reckitt Benckiser's remuneration plan aimed to motivate and retain top managers without adhering to a global remuneration policy.
Signup and view all the answers
Reckitt Benckiser aimed for below industry average net revenue growth in 2002
Signup and view all the answers
In 2002, net revenues at Reckitt Benckiser grew by 7% to £3,531m
Signup and view all the answers
The compensation plan at Reckitt Benckiser was performance-driven with a maximum bonus of 3 times the target bonus if targets were exceeded
Signup and view all the answers
The company valued the mobility of top commercial team members, aiming to nurture 'fresh thinking and new ideas' from people moving between markets
Signup and view all the answers
Reckitt Benckiser's organic growth rates were between 6% and 7% from 2000 to 2002
Signup and view all the answers
The remuneration plan aimed to motivate and retain top managers while adhering to a global remuneration policy
Signup and view all the answers
If an executive met all targets, they would receive 40% of their base salary as a bonus, with the possibility of earning up to 140% of base salary if they substantially exceeded all targets
Signup and view all the answers
Reckitt Benckiser emphasized simplicity in the compensation plan, with consistency throughout various levels of management, and did not use measures like Economic Value Added
Signup and view all the answers
The remuneration plan consisted of three major parts: salary, short-term incentives, and long-term incentives, with most compensation dependent on performance
Signup and view all the answers
Reckitt Benckiser's strategy in 2002 aimed for above industry average net revenue growth by focusing on high growth categories where their top 15 Power Brands held leading market positions
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The chairman of the board and the chairman of the Remuneration Committee spent many days talking with U.K. shareholders about the need to exceed normal U.K. levels of dilution
Signup and view all the answers
The EPS target for partial vesting was 6% growth per annum or 19% over a three-year period
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Reckitt Benckiser plc ranked 11th among leading household products/personal care companies based on sales
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The Procter & Gamble Company and Unilever Group held the top two positions in the global household goods market, with Reckitt Benckiser plc at the third position
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The chairman of the board and the chairman of the Remuneration Committee spent many days talking with U.K. shareholders about the need to exceed normal U.K. levels of dilution
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Reckitt Benckiser plc held a small proportion of shares in the U.K., but the Remuneration Committee felt it was important for U.K. shareholders to be comfortable with larger dilution
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The Combined Code on Corporate Governance in the U.K. summarized the recommendations of corporate governance committees in the U.K., dating back to the early 1990s
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Reckitt Benckiser executives and board members were focused on sustaining incentive compensation programs while meeting changing shareholder expectations and maintaining attractive compensation levels to recruit and retain top managers globally
Signup and view all the answers
Unilever Group had the highest sales among leading household products/personal care companies, while The Procter & Gamble Company had the highest net income
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U.K. stockholders were concerned about the valuation of stock options and the length of contracts for senior executives, wanting a greater alignment between executive pay and shareholders' interests
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The Procter & Gamble Company had the highest net income among leading household products/personal care companies
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Reckitt Benckiser plc was a part of the global household goods market, ranking third in terms of market share
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Institutional shareholders in the U.K. were increasingly concerned about executive remuneration plans, as evidenced by protests against remuneration packages of CEOs of other companies such as GlaxoSmithKline, WPP, and Reuters
Signup and view all the answers
In 2003, U.K. shareholders approved the use of 2% dilution per year over 5 years for all employee share programs, which was still below the 75th percentile of the U.S. peer group
Signup and view all the answers
Shareholders had expressed concern about remuneration plans, such as the protest against GlaxoSmithKline CEO's remuneration package and the narrow passing of WPP CEO's compensation contract in a shareholder vote
Signup and view all the answers
The EPS target for partial vesting at Reckitt Benckiser was 6% growth per annum or 19% over a three-year period.
Signup and view all the answers
The indicator used for long-term incentives at Reckitt Benckiser was revenue growth.
Signup and view all the answers
Members of the Remuneration Committee of the board were referred to as the 'custodians of the compensation strategy' at Reckitt Benckiser.
Signup and view all the answers
Reckitt Benckiser required shareholder approval for the remuneration policy.
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The long-term incentives at Reckitt Benckiser were paid in cash.
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Consultants from Bain & Company endorsed Reckitt Benckiser's remuneration plan.
Signup and view all the answers
The long-term pay at Reckitt Benckiser was not based on targets related to corporate growth over three years.
Signup and view all the answers
Reckitt Benckiser's remuneration plan aimed to motivate and retain top managers without adhering to a global remuneration policy.
Signup and view all the answers
Short-term incentives at Reckitt Benckiser were based on factors outside the manager's control.
Signup and view all the answers
The U.K. stockholders at Reckitt Benckiser were not concerned about the valuation of stock options and the length of contracts for senior executives.
Signup and view all the answers
The three criteria used to determine the compensation of a manager at Reckitt Benckiser were revenue growth, profit growth, and net working capital reduction.
Signup and view all the answers
The executive remuneration system at Reckitt Benckiser plc relied strongly on performance-oriented pay.
Signup and view all the answers
Reckitt Benckiser plc was formed in December 1999 by the merger of Benckiser N.V. and Reckitt & Colman plc.
Signup and view all the answers
Reckitt Benckiser aimed for below industry average net revenue growth in 2002
Signup and view all the answers
The U.S. is about the size of the pie. The U.K. is about the slice of the pie.
Signup and view all the answers
Reckitt Benckiser's remuneration plan consisted of three major parts: salary, short-term incentives, and long-term incentives
Signup and view all the answers
Long-term pay at Reckitt Benckiser was based on targets related to corporate growth over three years.
Signup and view all the answers
The EPS target for partial vesting at Reckitt Benckiser was 6% growth per annum or 19% over a three-year period.
Signup and view all the answers
The Remuneration Committee set a minimum share ownership policy for employees to behave like owners.
Signup and view all the answers
Consultants from Bain & Company endorsed Reckitt Benckiser's plan.
Signup and view all the answers
Members of the Remuneration Committee of the board were referred to as the 'custodians of the compensation strategy'.
Signup and view all the answers
Shareholder approval was required for the remuneration policy.
Signup and view all the answers
Reckitt Benckiser's remuneration plan aimed to motivate and retain top managers without adhering to a global remuneration policy.
Signup and view all the answers
The U.K. stockholders at Reckitt Benckiser were not concerned about the valuation of stock options and the length of contracts for senior executives.
Signup and view all the answers
Reckitt Benckiser's remuneration plan aimed to motivate and retain top managers without adhering to a global remuneration policy.
Signup and view all the answers
Reckitt Benckiser's remuneration plan consisted of three major parts: salary, short-term incentives, and long-term incentives.
Signup and view all the answers
The long-term incentives at Reckitt Benckiser were paid in cash.
Signup and view all the answers
Reckitt Benckiser's organic growth rates were between 6% and 7% from 2000 to 2002.
Signup and view all the answers
Reckitt Benckiser plc held a large proportion of shares in the U.K.
Signup and view all the answers
The chairman of the board and the chairman of the Remuneration Committee spent many days talking with U.K. shareholders about the need to exceed normal U.K. levels of dilution
Signup and view all the answers
Unilever Group had the highest net income among leading household products/personal care companies
Signup and view all the answers
Reckitt Benckiser plc was ranked 11th among leading household products/personal care companies based on sales
Signup and view all the answers
The Combined Code on Corporate Governance in the U.K. summarized the recommendations of corporate governance committees in the U.K., dating back to the early 1990s
Signup and view all the answers
Reckitt Benckiser plc was the top company in sales among leading household products/personal care companies
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Institutional shareholders in the U.K. were increasingly concerned about executive remuneration plans
Signup and view all the answers
The Procter & Gamble Company and Unilever Group held the top two positions in the global household goods market
Signup and view all the answers
Reckitt Benckiser plc was a part of the global household goods market, ranking third in terms of market share
Signup and view all the answers
The EPS target for partial vesting at Reckitt Benckiser was 6% growth per annum or 19% over a three-year period
Signup and view all the answers
Reckitt Benckiser plc was formed by the merger of Benckiser and Reckitt & Colman
Signup and view all the answers
Reckitt Benckiser's remuneration plan aimed to motivate and retain top managers without adhering to a global remuneration policy
Signup and view all the answers
Reckitt Benckiser ranked third in the broader household goods category in 2003.
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In 2002, sales at Reckitt Benckiser totaled £3.5 billion, with fabric care and surface care products generating more than 50% of sales.
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Reckitt Benckiser aimed to increase the contribution of new products to 50% by 2004.
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Reckitt Benckiser's main competitors included The Coca-Cola Company.
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In 2002, the company's profit before taxes was £545 million.
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Reckitt Benckiser's culture reflected 75% from Benckiser and 25% from Reckitt & Colman.
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Reckitt Benckiser's strategy focused on new products, acquisitions, and aggressive marketing.
Signup and view all the answers
Reckitt Benckiser owned leading brands in personal care products.
Signup and view all the answers
Reckitt Benckiser aimed for below industry average net revenue growth in 2002.
Signup and view all the answers
Reckitt Benckiser was formed by the merger of Benckiser N.V. and Reckitt & Colman plc.
Signup and view all the answers
Reckitt Benckiser executives and board members were focused on sustaining incentive compensation programs while meeting changing shareholder expectations and maintaining attractive compensation levels to recruit and retain top managers globally.
Signup and view all the answers
The merger was not a commercial and financial success.
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Reckitt Benckiser's net revenues grew by 9% in 2002 to £3,531m.
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47% of Reckitt Benckiser's revenue in 2002 was generated in Western Europe.
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Reckitt Benckiser's remuneration plan did not emphasize simplicity and consistency throughout various levels of management.
Signup and view all the answers
The maximum bonus an executive could earn at Reckitt Benckiser was 2 times the target bonus if all targets were exceeded.
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Reckitt Benckiser's compensation plan was not heavily focused on winning and performance-oriented compensation.
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Reckitt Benckiser's top 15 Power Brands did not hold leading market positions in high growth categories.
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The majority of Reckitt Benckiser's revenue in 2002 was generated in North America.
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Reckitt Benckiser's organic growth rates were between 6% and 7% from 2000 to 2002.
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The remuneration plan at Reckitt Benckiser consisted of two major parts: salary and long-term incentives.
Signup and view all the answers
Reckitt Benckiser aimed to attract the best executives globally but did not aim to remain competitive with U.S.-based competitors like P&G in their remuneration policies.
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The compensation plan at Reckitt Benckiser was not easily understood and performance-driven.
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Reckitt Benckiser did not value the mobility of top commercial team members, aiming to nurture 'fresh thinking and new ideas' from people moving between markets.
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Study Notes
Executive Remuneration at Reckitt Benckiser plc
- Short-term incentives were based on factors within the manager's control
- The three criteria used to determine the compensation of a manager were revenue growth, profit growth, and net working capital reduction
- Long-term pay was based on targets related to corporate growth over three years
- The indicator used for long-term incentives was earnings per share (EPS)
- The long-term incentives, paid in options and restricted stock, vested only if the company met the EPS targets
- The EPS target for partial vesting was 6% growth per annum or 19% over a three-year period
- The Remuneration Committee set a minimum share ownership policy for employees to behave like owners
- Consultants from Bain & Company endorsed Reckitt Benckiser's plan
- Human Resources worked with the board's Remuneration Committee and with senior managers to formulate and maintain the remuneration policy
- Members of the Remuneration Committee of the board were referred to as the "custodians of the compensation strategy"
- Shareholder approval was required for the remuneration policy
- Reckitt Benckiser directors believed that their performance-based compensation also adhered to provisions of The Code
Executive Remuneration at Reckitt Benckiser plc
- Short-term incentives were based on factors within the manager's control
- The three criteria used to determine the compensation of a manager were revenue growth, profit growth, and net working capital reduction
- Long-term pay was based on targets related to corporate growth over three years
- The indicator used for long-term incentives was earnings per share (EPS)
- The long-term incentives, paid in options and restricted stock, vested only if the company met the EPS targets
- The EPS target for partial vesting was 6% growth per annum or 19% over a three-year period
- The Remuneration Committee set a minimum share ownership policy for employees to behave like owners
- Consultants from Bain & Company endorsed Reckitt Benckiser's plan
- Human Resources worked with the board's Remuneration Committee and with senior managers to formulate and maintain the remuneration policy
- Members of the Remuneration Committee of the board were referred to as the "custodians of the compensation strategy"
- Shareholder approval was required for the remuneration policy
- Reckitt Benckiser directors believed that their performance-based compensation also adhered to provisions of The Code
Executive Remuneration at Reckitt Benckiser plc
- Reckitt Benckiser's strategy in 2002 aimed for above industry average net revenue growth by focusing on high growth categories where their top 15 Power Brands held leading market positions.
- Analysts considered Reckitt Benckiser a financial success, outstripping industry sales growth since its establishment in 1999.
- The company's organic growth rates were between 6% and 7% from 2000 to 2002, with 47% of revenue generated in Western Europe and 29% in North America.
- In 2002, net revenues grew by 7% to £3,531m, and normalised net income grew by 20% to £408m, with a 38% increase in net cash flow generation.
- Reckitt Benckiser aimed to attract the best executives globally and remain competitive with U.S.-based competitors like P&G in their remuneration policies.
- The company valued the mobility of top commercial team members, aiming to nurture "fresh thinking and new ideas" from people moving between markets.
- The remuneration plan aimed to motivate and retain top managers while adhering to a global remuneration policy, reflecting the company's culture and supporting international mobility.
- The compensation plan was performance-driven and easily understood, with a maximum bonus of 3 times the target bonus if targets were exceeded.
- Reckitt Benckiser emphasized simplicity in the compensation plan, with consistency throughout various levels of management, and did not use measures like Economic Value Added.
- The company heavily emphasized winning and performance-oriented compensation, rating potential recruits on competency and cultural fit, with a focus on achievement, commitment, entrepreneurship, and teamwork.
- The remuneration plan consisted of three major parts: salary, short-term incentives, and long-term incentives, with most compensation dependent on performance.
- If an executive met all targets, they would receive 40% of their base salary as a bonus, with the possibility of earning up to 140% of base salary if they substantially exceeded all targets. If none of the goals were met, the variable compensation would be zero.
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Description
Test your knowledge of executive remuneration at Reckitt Benckiser plc with this quiz. Explore the criteria for short-term and long-term incentives, the role of the Remuneration Committee, and the company's approach to aligning compensation with corporate growth and shareholder interests.
