We purchased and sold goods and services to various
related parties in which we hold a 50 percent or less equity interest (investment in associates and joint ventures). Such transactions were conducted at arm’s length with terms comparable to transactions with third parties. In 2011, a significant related party transaction was a €204 million gas supply (2010: €166 million) by the company to Delesto, a joint venture of AkzoNobel and Essent. Delesto transforms gas into steam and electricity. The steam is used in our production processes and the electricity is sold to the market.
We have contracts with several pension funds, for which the financial impact is also disclosed in Note 17. • At year-end 2011, AkzoNobel had a loan to the
AkzoNobel Pension Fund in the Netherlands of €81 million (2010: €83 million)
• In recognition of a funding deficit in the ICI Pension Fund in the UK, the company has agreed to make top-up contributions of £135 million in 2012 and 2013 followed by payments of £179 million in each year from 2014 to 2017.
• A subsidiary of the company, Imperial Chemicals Industries Limited has provided an asset-backed guarantee, via another wholly owned subsidiary, ICI Receivables Funding Ltd (ICI RF), specifically incorporated to provide the guarantee, for £250 million to support its commitment for the ICI Pension Fund. At the year-end the guarantee was backed by the cash balances of ICI RF of £225 million and the remainder by means of letters of credit. This asset-backed guarantee was terminated on January 30, 2012 with the transfer of £200 million to the ICI Pension Fund (see Note 17). • In recognition of a funding deficit in the AkzoNobel (CPS) Pension Scheme in the UK, the company has agreed to make top-up contributions of £75 million in each year from 2012 to 2018. In addition, contributions of at least £25m will be paid each year from the escrow account (see Notes 12 and 17) until 2017 or the earlier date on which the escrow account is exhausted
• In recognition of a funding deficit in the ICI Specialty Chemicals Fund in the UK, the company has agreed to make top-up contributions of £5 million in each year from 2012 to 2017.
• In recognition of a funding deficit in the J P McDougall Pension Scheme in the UK, the company has agreed to make top-up contributions of £2 million in each year from 2012 to 2018.
• In recognition of funding deficits at several pension plans in the US, the company has agreed to make top-up contributions of $67 million in 2012.
During 2011, we considered the members of the Executive Committee and the Supervisory Board to be the key management personnel as defined in IAS 24 “Related parties”. For details on their remuneration, as well as on shares and options held by members of the Supervisory Board or Board of Management, see Note 23. In the ordinary course of business, we have transactions with various organizations with which certain of the members of the Supervisory Board or Executive Committee are associated, but no related party transactions were effected in 2011. Likewise, there have not been any transactions with members of the Supervisory Board or Executive Committee, any other senior management personnel or any family member of such persons. Also no loans have been extended to members of the Supervisory Board or Executive Committee, any other senior management personnel or any family member of such persons. Note 22: Related party transactions
132 Notes to the consolidated financial statements | Financial statements | AkzoNobel Report 2011
Shares held by the members of the Supervisory Board
Number of shares at year-end 2010 2011
Karel Vuursteen 400 400
Uwe-Ernst Bufe 500 500
Virginia Bottomley 1,758 1,758
Dolf van den Brink 500 500
Peggy Bruzelius 500 500
Antony Burgmans 500 500
Peter Ellwood 500 500
Louis Hughes 500 500
Total compensation to key management personnel amounted to €15.4 million (2010: €12.9 million), €7.6 million relates to short-term employee benefits (2010: €7.4 million); €2.1 million to post-employment benefits (2010: €1.7 million) and €5.7 million to share- based compensation (2010: €3.8 million). As from January 1, 2011, the four additional members of the newly established Executive Committee are included in key management personnel.
Supervisory Board
Members of the Supervisory Board receive a fixed remuneration: €100,000 for the Chairman, €60,000 for the Deputy Chairman and €50,000 for the other members. Members of committees receive an extra compensation. Members living outside the Netherlands receive an attendance fee dependent on the country of residence. Members who are resident in the Netherlands do not receive an attendance fee except for meetings held outside the Netherlands. The social charges of Mrs. Bruzelius paid in 2011 related to employer’s contribution in the Netherlands (€2,600) and in Sweden over a four-year period (€93,000).
In accordance with the Articles of Association and good corporate governance practice, the remuneration of Supervisory Board members is not dependent on the results of the company.
We do not grant share-based compensation to our Supervisory Board members, neither do we provide loans. Travel expenses and facilities for members of the Supervisory Board are borne by the company and reviewed by the Audit Committee. The shares in the company owned by Supervisory Board members serve as a long-term investment in the company.
Note 23: Remuneration of the Supervisory Board and the Board of Management
23
1 Also member of the Nomination Committee.
Supervisory Board
Committee allowance fee
Total remu-
neration Remunera-tion Attendance fee committeeAudit
Remu- neration
committee Nomination committee Employer’s charges Total remu-neration
In € 2010 2011
Karel Vuursteen, Chairman 1 119,800 100,000 5,000 – – 15,000 2,600 122,600
Uwe-Ernst Bufe, Deputy Chairman 77,300 60,000 17,500 – – – 2,600 80,100
Virginia Bottomley 1 74,800 50,000 20,000 – 10,000 – 2,600 82,600
Dolf van den Brink 72,500 50,000 5,000 20,000 – – – 75,000
Peggy Bruzelius 84,800 50,000 15,000 15,000 – – 95,600 175,600
Antony Burgmans 1 67,500 50,000 5,000 – 15,000 – – 70,000
Peter Ellwood 1 72,300 50,000 15,000 – 10,000 – 2,600 77,600
Louis Hughes 97,300 50,000 25,000 15,000 – – 2,600 92,600
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