At the Company’s General Meeting held on 24 April 2025, the proposal for a new Company’s Corporate Bodies Remuneration Policy, presented by the Remuneration Committee was approved, which is set out below.
1. Independence and conflicts of interest
The Committee maintains and reaffirms, at every moment, its independent nature, being composed only by non-directors appointed by the shareholders. This independence, together with the permanent monitoring of the relevant market benchmarks referred to below and, whenever necessary, the engagement of reputable external consultancy services, constitutes an effective mechanism to prevent any potential conflicts of interest with the members of the corporate bodies concerned.
2. Core principles
The Remuneration Committee reviewed and gave careful consideration to the principles that govern the remuneration policy of the corporate bodies of the Company. These principles reinforce and highlight those aspects of the remuneration policy that are critical to the sustainability of the Jerónimo Martins business, namely:
the international landscape should be the foundation of the benchmark for the corporate bodies’ competitive remuneration. It is essential to maintain the ability to attract and retain the best talent in a competitive international context;
the alignment of the remuneration of the corporate bodies’ members to their responsibilities, their availability and their competencies put at the service of the Company;
the target competitiveness level, encompassing the total remuneration package (fixed remuneration and variable payments), that should consider the best practices of the reference market1 (e.g., European top executives’ market), and the internal remuneration policies;
the alignment with the Company employees’ remuneration policies and employment conditions is ensured by considering the reference markets and/or other companies with similar strategic positioning (always comparing to equivalent jobs)2 that confer a substantial level of internal equity and adequate external competitiveness;
the importance of rewarding the commitment to the Group’s overall strategy and to the shareholders’ long-term interests, the achievement of superior results and the demonstration of appropriate attitude and behaviours, which is also taken into consideration in the rewarding policies of the Company; and
the need to safeguard the overall interests of the Company.
3. Organizational model and remuneration framework
The committee decided to propose to maintain the above-mentioned policy’s principles. The proposal considers the legal framework and the existing recommendations, as well as the organizational model adopted by the Board of Directors.
With respect to the organisation of the Board of Directors, the Remuneration Committee has specifically considered the following characteristics:
the existence of a Chief Executive Officer with delegated duties (who since 18th December 2013, accumulates such duty with that of Chairman of the Board of Directors) regarding the day-to-day management of the Company;
the existence of a director or directors to whom the Board have entrusted or may entrust special duties;
the participation of Non-executive Directors in Specialised Committees, who are therefore called to devote increased time to Company’s affairs.
Given the current organizational model and in accordance with the framework of the compensation principles, the Remuneration Committee considered also relevant:
ensure that the remuneration of directors with executive duties is aligned with international market practices1, reinforcing the importance of keeping the process for defining targets and assessing performance, which should be subject to review and/or update on a regular basis (every mandate);
guarantee the consistency between the quantitative key performance indicators defined for the Chief Executive Officer’s annual performance evaluation and those that are also considered, according to their responsibilities, in the annual performance appraisal for all Company’s managers;
Considering the above-mentioned core principles and assumptions, the following remuneration framework was defined:
3.1. Non-executive Directors
the remuneration of the Non-executive Directors shall be a fixed amount exclusively, reviewed periodically according to international best practices and taking into consideration the benchmark with other listed companies and the specific responsibilities and availability of such directors;
the amount paid to Directors with non-executive duties may be differentiated for those who have been assigned functions in Specialized Committees or Supervisory Boards of subsidiaries. With respect to those, the Remuneration Committee considers it appropriate to award a fee per meeting, since the duties performed on behalf of these Committees and Supervisory Boards demand additional availability from the respective committee members. An additional fixed remuneration may also be paid to those Non-executive Directors who are in charge of specific tasks.
3.2. Directors with executive duties
Regarding the remuneration of Directors with executive duties, specifically the Chief Executive Officer (CEO), the Remuneration Committee decided to maintain the existence of two remuneration components, fixed and variable:
Fixed component: corresponds to a monthly remuneration paid in 14 monthly instalments, the amount of which is determined taking into account the duties and responsibilities attributed to the CEO of the Company, the performance achieved and the benchmark for similar positions5; also the CEO remuneration cannot or should not create an impediment to the competitiveness of the Company’s remuneration policies;
Variable component: corresponds to an annual amount determined by the Remuneration Committee and is limited to the maximum amount of three times the value of the fixed remuneration. The determination of a final amount is based on an annual individual performance evaluation. The evaluation is based on a framework of key quantitative indicators which should be in line with the Group strategic goals and business plans approved by the Board of Directors, and qualitative goals that are critical for the long-term sustainability of the business;
These dimensions, quantitative and qualitative (the latter more a long-term by nature), are critical for the future success of the businesses and, as such, can have a timeline that can exceed a year.
Bearing in mind the contribution of the countries and business areas where the Group operates, the Remuneration Committee considers adequate that the payment of fixed and variable components of remuneration to Directors with executive duties be split between the Company and its subsidiary companies where such Directors are also members of the management body, in a proportion determined by the Remuneration Committee.
3.2.1. Performance evaluation methodology and variable remuneration attribution
The Remuneration Committee believes that achieving an individual target should not automatically guarantee a specific percentage of variable pay. After the Board of Directors sets the financial (quantitative) and non-financial qualitative targets, the Committee reviews how these different indicators relate to one another and how achieving one target may influence the achievement of others.
Therefore, the final overall assessment is holistic, taking all interactions into account, while still respecting the weighting defined for the financial (quantitative) and qualitative components.
The quantitative key performance indicators of a financial nature account for 50% of the individual performance calculation, and reflect performance translated into real Company growth and the shareholders’ return. These indicators are weighed according to the strategic priorities of the Company, the context of the business and the overall interests of the stakeholders, as follow:
Weight |
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Objectives |
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Description |
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50% |
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Turnover Growth |
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Based on reported consolidated sales increase; the following are also evaluated: real like-for-like growth, the contribution of organic growth, the evolution of new and mature markets, the evolution of sales per square meter and per employee full-time equivalent (FTE), capital turnover, and the impact on gross margin for achieving the proposed targets. |
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Net Earnings |
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Based on the consolidated net results, with targets defined in absolute value; the following are also taken into account: the evolution of earnings before taxes, interests, depreciations and amortisations (EBITDA), the EBITDA margin (with and without IFRS16), the impact on it of the growth of developing markets, the weighting of the different markets in the sales mix and the evolution of the EBITDA margin in each business area and country. |
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EVA |
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The return on invested capital – is based on the economic value added (EVA) defined in absolute value deducted from minority interests. The assessment takes into account: the rates of return on capital invested in each business and the respective cost of capital in each country (with and without IFRS 16), the evolution in relation to previous years and at estimated rates, the rate of reinvestment relating to depreciations amount, the evolution of the average amount invested per square meter of sales area, the comparison with the return rates of the sector, the impact on the achieved value of the businesses under development, and finally, the cash flow released and available for shareholders (the conversion rate of earnings into cash). |
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Gearing |
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The robustness of the Company’s capital structure is measured by the debt ratio (“gearing” – net financial debt after distribution of dividends, divided by equity). The assessment also weighs: the value of the working capital and its contribution to financing invested capital and reducing financial debt, the structure of financing obtained, currencies and maturity, the contribution to hedging exchange rate risks, and the interest coverage rate on EBITDA. |
The qualitative key performance indicators (of non-financial nature) account for 50% of the individual performance calculation and are grounded in the evaluation of real implementation of transversal projects across the Group’s companies, aligned with established priorities, to ensure the future business competitiveness and long-term sustainability. The individual performance indicators include the following:
Weight |
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Objectives |
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Description |
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50% |
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Strategy and Resource Allocation |
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Includes both the development and implementation of strategic projects, and the exploitation of new investment opportunities, consistent with the Group’s capabilities and resources. Considering the objective of sustained growth and the ongoing transformation of the Company to ensure its competitiveness and long‑term success, priority is given to investment decisions and the launch of projects or initiatives whose execution prevents the dilution of return on capital and safeguards the strength of the balance sheet. |
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Organisational Health |
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The organisational health and talent agenda evaluates the dissemination of the Company’s values, the consolidation of the core elements of its culture, the degree of engagement and satisfaction of employees, the identification and promotion of leaders who guarantee the growth of the Company, and the normal replacement of executive and management teams, linking the human resources strategy to the business strategy, monitoring the implementation of salary policies suited to remunerate loyalty and merit, as well as social responsibility projects within the scope of HR; |
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Multi-Stakeholder Relations |
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The performance and results achieved in the multi-stakeholder relations indicator are measured by Environmental Social & Governance (ESG) analysts according to the information disclosed on the policies, practices and KPI’s. The Committee takes into account, in particular, the progress shown during the year, considering the aspirations defined by the Board of Directors in this matter, and the evolution made by other organizations within the same sector and/or country. |
The attribution of the annual variable component should consider the following criteria: a) if after review, the individual performance does not meet any of the set targets (quantitative or qualitative), there will be no annual variable remuneration payment; b) if the individual performance equals or exceeds in all or some of the targets, the variable remuneration payment may range from 50% to 100% of the maximum variable amount.
The process for the CEO performance review includes an annual performance assessment with quarterly reviews which are made available to the Remuneration Committee. The assessment and reviews are based on evidence, and on a regular monitoring of the degree of achievement of the targets. In accordance with the established procedure, the annual performance cycle is concluded with the award of the variable incentive component in the first quarter of the year following the performance period after the calculation of the full year results. The payment is made during the first semester.
Together, the fixed and variable components should ensure a competitive remuneration in the international market and drive individual and collective performance, through the setting and achievement of ambitious goals of accelerated growth and appropriate shareholder return. Furthermore, the Committee considers that the Remuneration Policy of the Company is also aligned with the remuneration practices of comparable publicly traded peers, operating in the global arena. Given the pressures in the marketplace for executive capabilities, the Remuneration Committee analyses the competitiveness of the Company in this matter from time to time based on appropriate and reliable benchmark studies provided by independent and credible entities.
3.3. Members of the Audit Committee
The remuneration of the members of the Audit Committee as well as the remuneration of Directors with non-executive duties shall continue to comprise a fixed component only.
3.4. Members of the shareholders general meeting
The Chairman and secretary of the Shareholders General meeting will keep a per meeting fee.
3.5. Statutory auditor
The Statutory Auditor will be remunerated in accordance with the auditing services agreement signed with Jerónimo Martins, which covers almost all its subsidiaries. This remuneration shall be in line with market practices and is subject to the approval of the Audit Committee.
4. Alignment of long-term interests
The Remuneration Committee considers that the remuneration framework for Directors with executive duties is adequate and allows for a strong alignment through the setting targets in line with the long term interests of the Company. The alignment with the long-term interests of the Company is reinforced by the fact that the current Chairman of the Board of Directors and Chief Executive Officer is a member of the family who is the majority shareholder of the Company.
The Remuneration Committee considers it unnecessary, to establish a maximum potential remuneration amount, either in aggregate or on an individual basis, for members of the Corporate Bodies. This position is maintained without prejudice to the proportional balance defined between fixed and variable remuneration for executive directors.
For the same reasons, the Committee also concludes that the inclusion of a clawback mechanism for variable remuneration already paid is not required.
4.1. Variable Remuneration deferral
Without prejudice to the foregoing, to reinforce the alignment of executive directors’ performance with the long-term interests of the Company, a significant part of the respective annual variable remuneration will be deferred in time, distributed over a period of four years, subject to the confirmation by the Remuneration Committee of the sustainability of the performance (understood as the non-deterioration of the results, objectives and metrics that supported the level of variable remuneration attributed), in the following terms:
50% of the variable remuneration awarded will be due in the year of attribution;
20% of the variable remuneration awarded will be due in the year following the attribution;
15% of the variable remuneration awarded will be due in the second year following the attribution; and
15% of the variable remuneration awarded will be due in the third year following the attribution.
In the event of termination of duties of the executive director, the following rules will be applied:
If the termination of duties occurs due to a fact not attributable to the executive director, inter alia, due to retirement, death, illness, non-renewal of mandate or resignation pursuant to an agreement with the Company, the entire variable remuneration awarded, including the part that has been deferred, will be due in the year of termination, provided that the Remuneration Committee confirms that performance has been sustainable up to that moment;
If the director ceases executive functions but remains as a non-executive director, the entire variable remuneration awarded, including the part that has been deferred, will be due on the scheduled dates, provided that the Remuneration Committee confirms that performance has been sustainable up to that moment;
If the termination of duties occurs due to a fact attributable to the executive director, inter alia, due to dismissal for cause or resignation from the position for circumstances other than those referred to in paragraph a), the right to receive part of the variable remuneration that has been deferred will be extinguished;
For the purposes of calculating the pensionable salary, under the terms of Plan C, of the Jerónimo Martins e Associadas Pension Fund, whenever the last variable remuneration received should be taken into account – in the case of directors who no longer receive variable remuneration, but maintain eligibility conditions –, the entirety of the last variable remuneration awarded will be considered, regardless of its partial deferral.
5. Pension Plan and fringe benefits
Additionally, the Company provides for a Retirement Pension Plan for Executive Directors which was approved by the General Meeting, which is described in point 76.
As established by the Remuneration Committee in 2010, life and health insurance fringe benefits for Directors with executive duties shall continue unchanged. These fringe benefits have no relevant weight on the remuneration of such directors, representing less than 1% of the total remuneration.
6. Revision Process
Ordinarily, at the end of each mandate, and extraordinarily, whenever justified, the Remuneration Committee will assess the need to propose to the shareholders general meeting, the revision of the remuneration policy, taking into account the aforementioned principles. With a view to apply, monitor and define possible proposals to revise the remuneration policy, the Committee meets at least once a quarter, in order to monitor the situation of the Company, and assess the adequacy of the corporate bodies’ remuneration. In the exercise of its duties, the Remuneration Committee also requests the information and the internal and external studies (in this case, ensuring the competence and independence of the service providers that carry them out) that it deems relevant, and when needed, requests the participation of any directorates, departments and services of the Company.
7. Final remarks
The Company continues not to have any type of plan for the attribution of shares or share purchase options to directors, nor has there been any remuneration paid in the form of profit sharing.
The Company did not enter into any contracts with its Directors which mitigate the risk inherent to the remuneration variability set by the Company, nor is the same aware that any such contracts have been entered into between its Directors and third parties.
The Company did not and will not adopt any policy or execute any contracts or arrangements with any Directors, members of the Audit Committee or members of the Company’s Internal Committees, related with the performance of their duties, the applicable notice periods, and the terms of the termination and payment linked to termination.
Accordingly, in the 2025 financial year there was no assumption by the Company of any costs related to the respective termination of functions.
Assessment by the Remuneration Committee of the Chairman of the Board of Directors and Chief Executive Officer in February 2025, in relation to 2024 financial year.
Having considered all the circumstances in which the Chairman of the Board of Directors and Chief Executive Officer developed his activities and led the Group in the effective and challenging management, in a year following the inflationary cycle in sales. Despite the investment in price made as a way to increase volumes in a market without growth, like the polish food market, the growth in volume and diluting costs revealed the vision, focus and commitment with consumers. Taking into account the financial performance of most of the businesses, despite not having achieved all the financial targets set in a very ambitious way facing the conjuncture, as well as the continued progress in the quantitative and qualitative targets deemed relevant, the Committee decided to grant to the Chairman and CEO the incentive award of €2,600,000.
The Remuneration Committee also highlighted that this decision considered the contributions to the sustainable performance of the Group, which, under the very special circumstances that have impacted the year under review, reinforced a solid foundation for the future. In this respect, the Committee members felt worthwhile to note the following elements to support their decision:
The visible success of implementing the concept “All about food” in Portugal, reinforcing the retailing knowledge and culture of the Group and mainly the competitiveness of the new format with a remarkable LfL growth in a crowded market;
Executing carefully the entry in Slovakia, adding another geography and source of growth to Biedronka;
Achieving solid cash generation in Hebe, becoming another contributor to net profits and improving the experience and know-how of the Group on the virtual market and creating conditions either to make Hebe evolve to an international business, or to support e-commerce and q-commerce operations of Biedronka;
Recovery of Ara’s gross margin, without loss of competitiveness, which allowed to present once again positive results in terms of EBITDA (excluding IFRS16);
Undisputed progress across a broad set of criteria of sustainable development for the business, with remarkable achievements such as the ratings awarded by CDP and FTSE, which shows the leading position of Jerónimo Martins among its peers;
Strong investment in our leadership across the board, that will allow us not to lose competitiveness in the future;
A unique investment in our corporate responsibility that anchors our interests in the communities that we serve, through the creation of the Jerónimo Martins Foundation.
1 Jerónimo Martins ensures the competitiveness of Executive Remuneration and its alignment with prevailing market practices through the regular benchmarking of the Chief Executive Officer’s remuneration against the Mercer Executive Remuneration Guidelines (MERG). The peer group adopted for this purpose expressly excludes entities operating in the Banking and Oil & Gas sectors, whose remuneration frameworks differ materially from those of the retail sector, thereby ensuring the relevance and appropriateness of the comparative analysis undertaken. MERG data constitutes a principal reference source for the determination of both fixed and variable remuneration components, supporting conformity with market standards while duly taking into account the individual performance of the Chief Executive Officer and the overall results achieved by the Company.
2 This analysis is based on data from the Mercer Executive Remuneration Guidelines (MERG) for comparable roles, assessed in accordance with Mercer’s job evaluation methodology, thereby ensuring consistency, objectivity, and accuracy in the role‑matching process. In light of the Group’s growth in recent years, and applying the aforementioned methodology, the role has been reviewed whenever deemed appropriate, in order to ensure its continued alignment with organisational requirements and prevailing market practices.