It starts with bringing ultimate transparency on the progress of all of these and it starts with linking remuneration to these objectives and making sure that there are direct consequences. And I think that links to your question on remuneration and what are we doing? Well, a few things that I want to say about that. On remuneration, there is a proposal on remuneration for executive directors that we’ve gone through with quite a number of you and that will be for voting next year in the AGM. So that links our executive director compensation more directly to shareholder interest. So I think that’s number one. But then, as you say, probably even more important is what do we do internally? And just let me give you just two examples where I feel that we’re making a change.
First of all, for approximately 15,000 employees, and that is not a factory personnel. So it’s office and manager level. But for 15,000 we have changed the remuneration structure as per immediate and that we take out the long-term incentive plan to which they have very little line of sight to, but we’re going to dial up remuneration and the performance component on in-year performance. Still, the payout to them will be partially in long-term plans, such as shares and so forth but we’re taking — we’re dialing up or in-year performance there. Secondly, we’re significantly increasing the line of sight in terms of remuneration structure. So there where people, for example, were rewarded on a total Unilever level, we’re actually increasing the component in total remuneration for the business unit or the business group that they are directly responsible for to the vast majority of their variable pay.
Now these are just two examples and of measures that we have taken as part of this action plan and that I’m going to communicate right after this call to the whole Unilever internal community. So, I think that’s something just to emphasize. Then on the external part — or sorry, on the appointments. Look, I believe that I was really on the CFO appointment, for example, this is about an action plan, and this is about making business progress. And I believe that after a long and thorough search, it was super clear that Fernando is by far the best partner for me in doing that. He has an outstanding operational track record. He’s an economist and a finance leader by background. And I’m confident that together, we’re going to accelerate on this plan, a plan that he is square behind.
And there’s still a vacancy on the Nutrition side. Obviously, now in the future, there could be more change. So I’m definitely not excluding external appointments. But when we have the right and people available internally that are buying into what we want to do that gives us a flying — definitely a flying start. When you talked about superiority, just a very quick one, yes, we measure product superiority. As I said, approximately 70% of our current portfolio has product superiority, we believe. But moving towards unmissable superiority, yes, we are quantifying that. That is a score, that’s an internal mechanism. We’re clearly measuring all of these aspects, and we’re holding these top 30 — we’re rolling that through to these top 30 brands with great speed.
And it is actually a very disciplined and a very quantifiable approach. So I’d like to leave that here for now because going into specific scores on these different metrics is probably not the right time, but it is indeed a very quantifiable method.
Jemma Spalton: Our next question comes from Jeff at BNP. Go ahead, Jeff.
Jeff Stent: The first one is, I appreciate that you said that you think you’ll create most value just by running the existing business groups better. But if you could just explain in the new business group structure, what really is the value add of Unilever itself and in particular, keeping food and HPC together, given you’ve now got these separate business groups. That’s the first question. And the second one is, I think Graeme explained that to hit top four TSR, which is your objective, you need to deliver the upper end of 3% to 5% so with that in mind, why are you guiding just to 3% to 5%, not to the upper end of it because 3% to 5% would seem to be inconsistent with the other target for top five TSR.
Hein Schumacher: Thanks, Jeff, for your questions. I’ll take the first one and hand over to Graeme for the second one on the financial — on the framework. Look, I mean, on the total, I think since the inception of Unilever of bringing together Lever Brothers and the Margarine Unie from the Netherlands. There have been always questions about are we better together? Or should there be more focused? So I’m super well aware of that. But the first couple of months have convinced me that at this point in time, the biggest value creation opportunity that we have is to simply run these businesses better. And yes, there is a significant amount of synergy between the different portfolios, whether that’s in buying, whether that’s in developing digital and technology, whether that is — but also go to market if you think about it, and I spent quite some time in Indonesia and Africa, for example, if you deliver food products to distributive trade that is all going in the same van.
It’s the same ordering pattern than for HPC type of product. So the synergies are undoubtedly there. But apart from the synergy discussion, I believe, at this point in time, there is a value creation opportunity for all businesses to further improve. Graham.
