In looking at the cause and effect of high pay packages, we can look at the recent career of Dutch businessman Hein Schumacher.

He was CEO of FrieslandCampina, the Dutch multinational dairy co-op, from 2018 until he announced he was leaving in January last year. In his last full year at the co-op he was paid €1.86m, with €730,00 of that made up of short- and long-term incentives. He was scheduled to earn €2.27m in 2023, with bonuses accounting for €1.35m of that. Obviously, as he left the company he didn’t get the money.

The reason he left FrieslandCampina was because Unilever brought him in as CEO. He’d actually started his career at Unilever, which probably helped his prospects.

Unilever paid him €292,000 in relocation expenses, and even paid him €648,000 to compensate for the loss of bonuses that he would have got had he stayed at FrieslandCampina. On joining Unilever on 1 June last year, Schumacher’s base salary was set at €1.85m – almost exactly what he earned in his last full year at FrieslandCampina, including bonuses.

His short-term bonus has a target of 150% of base salary, and a maximum of 225% of base salary. His longer-term bonus target is 200% of base salary, with a maximum payout of 400% of base salary.

This means that he could receive, under the maximum payout, over €11.5m a year.

Interestingly, Unilever promised to keep Schumacher’s base salary unchanged for two years after almost 60% of shareholders voted against the overall remuneration package proposed at the 2023 AGM. The chair of Unilever’s remuneration committee expressed “gratitude for the valuable feedback” from shareholders.