In advance of the company's AGM tomorrow, Ahold has published details of the bonuses which Moberg will receive if he achieves certain goals in the current year.
If Moberg achieves all of his performance criteria and delivers what the company called an "outstanding performance" in 2003, then he will receive a bonus of up to 250 per cent of his base salary.
Seven criteria have been set for 2003, each with a particular bonus attached if the target is met.
Three criteria relate to the company's financial performance. As part of the Road to Recovery plan he introduced earlier in the autumn, Moberg has pledged to maximise the company's cash flow and reduce debts. His specific targets for the current financial year are to improve cash flow before financing activities, reduce rolling inventory days and reduce cash tangible capital expenditures.
The company said that the specific figures set for these targets were commercially sensitive and that it would not therefore disclose them. It added, however, that meeting the targets set out in all three areas would entitle Moberg to receive a bonus of 40 per cent of the maximum bonus for 2003.
An outstanding performance would result in Moberg being entitled to receive 70 per cent of the maximum bonus for 2003.
Two criteria relate to Ahold's strategy: developing the appropriate corporate strategy for Ahold and its acceptance by the Supervisory Board, shareholders and the financial community, and developing a successful financing strategy and its acceptance by the Ahold Supervisory Board, banks and the financial markets.
If both these strategic criteria are fully achieved, Moberg will be entitled to receive 24 per cent of his maximum 2003 bonus amount.
The remaining two criteria relate to the stabilisation of aspects of the company's operations. These are: ensuring that the internal controls required to put Ahold's house in order are in place through improved financial controls, internal audit procedures, functional reviews and a return to a normal reporting cycle; and the hiring of new management for US Foodservice, the company at the heart of an accounting fraud which has cost the company nearly €1 billion.
If these criteria are fully achieved, Moberg will be entitled to receive 6 per cent of the maximum 2003 bonus.
The company said that, based on a pro rata salary for 2003 of €980,775, this would mean a maximum pay out of around €2.5 million, if all the criteria are met and the company puts in an outstanding performance. If the performance is merely satisfactory, Moberg would receive around €1.7 million.
Shareholders will ultimately have the final say in whether the bonus package is approved, and have proven sceptical in the past. Moberg's appointment earlier this year was almost blocked as shareholders revolted over his remuneration package: Moberg could have received up to €10 million in pay and bonuses.
Shareholders eventually backed down, believing, quite rightly, that not appointing Moberg would be even more disastrous for the company, but the new CEO took on board their concerns and agreed to reduce his remuneration by removing the guaranteed elements of severance pay and bonuses.
Argentine bid confirmed
As part of Moberg's master plan, the company's sell off of underperforming units is continuing, with operations in Asia, Latin America and Spain all up for sale.
Rumours began circulating last week that Cencosud, the Chilean retail group which bought Ahold's operations there earlier in the year, was planning to buy the Argentine business as well, and Cencosud yesterday confirmed that it had made a formal offer for the Disco chain.
Cencosud has joined forces with three venture capital firms, Capital International, AIG Capital Partners and the International Finance Corp., to buy Disco. The retailer will take a 50 per cent stake while the three financial investors will share the remaining 50 per cent.
Cencosud said that after the purchase, Disco would be merged with its Jumbo supermarket in Argentina.
The price paid was not disclosed, but Disco is thought to be worth some $200 to $350 million.
Cencosud will lift its market share in Argentina to over 25 per cent with the acquisition, which comes hot on the heels of its $94.5 million takeover of Ahold's Santa Isabel business in Chile.