Table of Contents
United States
Securities and Exchange Commission
Securities and Exchange Commission
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934
Pursuant to Rule 13a-16 or 15d-16
of the
Securities Exchange Act of 1934
For the month of
April 2010
April 2010
Vale S.A.
Avenida Graça Aranha, No. 26
20030-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)
20030-900 Rio de Janeiro, RJ, Brazil
(Address of principal executive office)
(Indicate by check mark whether the registrant files or will file annual reports under cover of
Form 20-F or Form 40-F.)
(Check One) Form 20-F þ Form 40-F o
(Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1))
(Check One) Yes o No þ
(Indicate by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7))
(Check One) Yes o No þ
(Indicate by check mark whether the registrant by furnishing the information contained in this Form
is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)
(Check One) Yes o No þ
(If “Yes” is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b). 82- .)
Table of Contents
13.1 Description of the compensation policy or practices for the Executive Board, the Statutory and
Non-Statutory Boards, the Fiscal Committee, the Statutory Committees and the Audit, Risk, Finance
and Compensation Committees, covering the following topics:
a. Objectives of the compensation policy or practices
According to the provisions of Article 10, Paragraph 3 of the Bylaws, the Managers’ overall and
annual compensation is set at the Annual General Meeting, and takes into account their
responsibilities, the time they dedicate to their functions, their competences and professional
reputation, and the market value of their services.
Vale is the second largest diversified mining company in the world, and the largest private company
in Latin America. It has operations in over thirty countries, a market value of some US$140
billion, over 500,000 shareholders in every continent, and around 60,000 employees and 32,000
subcontracted workers active in its operations.
Clearly, Vale is a global company of great complexity and magnitude, whose administration requires
an in-depth understanding of its area of business and market, combined with total commitment.
As a global company, Vale is aware that retaining and engaging the right professionals in key
roles, especially executive directors, is critical for its success on the mid and long term. As
such, the market is always the benchmark, from a perspective of global competition, which means its
main competitors, such as the top mining companies and other large global enterprises.
The main factor for compensation and the main objective of the compensation policy adopted is the
company’s performance and growth in the short, medium and long term, in line with its strategic
plan, while also assuring shareholder value. The compensation policy therefore prioritizes serving
the company’s business.
b. Composition of compensation packages
(i) Description of the different elements of the compensation packages and the objectives of each
of them; and (iii) the method for calculating and adjusting each of the elements in the
compensation packages:
Executive Board
Fixed Compensation
The compensation for the members of the Executive Board is made up exclusively of the payment of a
fixed monthly fee. The deputy members receive 50% of the amount paid to the members. The amount
paid as fees is aligned with market values. This fixed compensation is designed to remunerate the
services of each board member, within their scope of responsibility as members of Vale’s Executive
Board. The overall annual compensation for the Managers, including the members of the Executive
Board, the Statutory Board, the Fiscal Council and the advisory committees is set at the annual
general meeting and distributed by the Executive Board. The members of the Executive Board are
eligible to receive a private pension plan from the Vale pension fund (Valia – Fundação Vale do Rio
Doce de Seguridade Social).
Fiscal Board
Fixed Compensation
The compensation for the members of the Fiscal Board is made up of a fixed monthly fee, set at 10%
of the average compensation paid to the Executive Directors, excluding benefits, representation
monies, and profit shares. Aside from this fixed compensation, the active members of the Fiscal
Board have the right to the reimbursement of their transportation, board and lodging expenses
incurred while undertaking their duties. Deputys are compensated when they undertake the function
when a seat is vacant, or when the member of the board in question is absent or unable to exercise
the function. The aim of the fixed compensation is to remunerate the services of each board member,
within their scope of responsibility as members of the Company’s Fiscal Board. The fees for Fiscal
Board members are adjusted in line with any adjustment made to the Executive Directors’
compensation.
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Advisory Committees
Fixed Compensation
The compensation for the members of the Executive Board Advisory Committees (Strategy Committee,
Finance Committee, Executive Development Committee, Financial Control Committee, and Governance and
Sustainability Committee) is paid for each meeting an executive effectively takes part in, said
payment being the same as the monthly fee payable to the deputy members of the Executive Board. As
set forth in Paragraph 2 of Article 15 of Vale’s Bylaws, the committee members who are Vale
Managers will not be eligible for extra compensation for sitting on the committees. The aim of the
fixed compensation is to remunerate each member’s services within the scope of their responsibility
as members of the Company’s respective Advisory Committees. The compensation for Advisory Committee
members is adjusted in line with the compensation paid to members of the Executive Board.
Executive Board (Statutory Directors)
Fixed Compensation
Fixed monthly compensation set according to competitive market rates and adjusted annually by the
IPCA inflation index. The aim of the fixed monthly compensation is to remunerate the services
rendered by the statutory directors within the scope of their individual responsibility in managing
the Company.
Benefits
Package of benefits that is compatible with market practices, including private healthcare,
hospital and dental care, a designated car with driver, private pension scheme and life insurance.
Not only are the benefits in line with market practices, but they are also aimed at assuring the
executives and their dependents peace of mind when it comes to fundamental issues such as
healthcare.
Profit Share
Variable annual payment (profit share bonus) based on the Company’s earnings and defined by
indicators and objective, measurable targets derived from the strategic plan and the annual budget
approved by the Executive Board. While assuring market competitiveness, the main aim of the bonus
is to acknowledge an executive’s contribution to the Company’s performance and earnings. Based on
the rules established in the program, the bonus may even be zero, should the Company fail to meet
the targets set for each year. Meanwhile, if the performance is exceptional, the bonus can be
raised up to a maximum of 150% of the fixed annual amount.
ILP Plan (Long-Term Incentive Plan, as per the acronym in Portuguese)
Long-term variable payment based on the Company’s expected performance in the future, with the aim
of retaining and engaging the Managers and aligning them with the future vision of the Company. The
sum is defined as 75% of the bonus (profit share) for Executive Directors and 125% of the bonus
(profit share) for the calculated on the value effectively paid for said bonus, and transformed, as
a reference, into a number of ordinary stock issued by Vale (virtual shares), considering the
average price for the Company’s ordinary stock over the last sixty trading days of the previous
year. Should the executive remain with the Company, at the end of three years, the number of
virtual shares is transformed into a pecuniary value by the average price of the ordinary stock
issued by the Company over the last sixty trading days in the third year. The program also compares
the Company’s performance against twenty other companies of a similar size (peer group); should
Vale come out first in this ranking, the amount calculated is increased by 50%. This percentage is
reduced on a sliding scale, such that from first to fifth place, the percentage remains the same,
and as of 15th place in the ranking, no payment is made. The program was introduced in 2007, the
first payment having been made in January 2010. For further details, please see item 13.4 of the
Reference Form.
Prior to the ILP, the Company had a specific program for the Statutory Board, which received 36% of
the bonus, payable after 13 months. This program, which has been replaced by the ILP, no longer
exists, the last payment having been made in January 2009.
Matching
Like the ILP, Matching is a variable, long-term form of compensation based on the Company’s
expected performance in the future. To be eligible to take part in the Matching scheme, an
executive should allocate a percentage of his/her bonus (short-term variable compensation) for the
purchase of Class A preferred stock issued by Vale, through the mediation of a pre-defined
financial institution, under market conditions, on the days set in the scheme, without any benefit
being offered by Vale. The percentage bonus that may be allocated per executive for participating
in the Matching scheme is based on an assessment of their performance and potential. Those
executives who acquire shares under the terms and conditions of the Matching scheme on the
stipulated dates and who are still in the employ of Vale three years after they were acquired and
who have kept the ownership of all the shares purchased will be eligible for a cash prize. At the
end of the three-year period, when the cycle reaches its conclusion, the Managers check that the
terms of the scheme, as set forth in the manual, have been followed. Assuming that the terms of the
plan have been observed, the Company will pay the executive a net value, as a prize, worth the
amount they had purchased in shares as part of the scheme. After the incentive has been paid, the
executives are free to sell the preferred stock issued by Vale that they had acquired to join the
Matching
scheme, in compliance with existing legislation. The main aim of this scheme is to encourage an
“owner’s vision”, while also helping to retain executives and reinforce a sustained performance
culture. For further details, see item 13.4 of the Reference Form.
3
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Non-Statutory Board
The non-statutory directors are Company employees with a labor contract. There are two groups of
executives that fall into this category: “level 5” directors, who normally hold global corporate or
business unit functions; and (ii) “level 4” directors, who generally hold regional or local
corporate functions, or are responsible for operational systems or areas in the Company’s different
businesses.
Fixed Salary
Monthly amount based on the Company’s career plan and accepted practices on the competing market.
All positions are assessed using the Hay System. The aim of the fixed salary is, as set out in the
labor contract signed by each executive, to remunerate the services rendered within the scope of
responsibility attributed to them in undertaking their respective duties within the company. There
is no predefined index or frequency for adjusting fixed salaries; when they are adjusted, this is
based on changes in market values and the merit of the individual executive.
Benefits
Package of benefits that is compatible with market practices, including private healthcare,
hospital and dental care, private pension scheme (Valia) and life insurance. Not only are the
benefits in line with market practices, but they are also aimed at assuring the executives and
their dependents peace of mind when it comes to fundamental issues
such as healthcare.
Profit Share
Variable annual payment (profit share bonus) based on the Company’s earnings and defined by
indicators and objective, measurable targets derived from the strategic plan and the annual budget
approved by the Executive Board. While assuring market competitiveness, the main aim of the bonus
is to acknowledge an executive’s contribution to the Company’s performance and earnings. Based on
the rules established in the program, the bonus may even be zero, should the Company fail to meet
the targets set for each year. Meanwhile, if the performance is exceptional, the bonus can be
raised up to a maximum of 18 times the monthly salary for “level 5” Directors, and up to 15 times
the monthly salary for “level 4” Directors.
Long-Term Incentive Plan (ILP)
Long-term variable payment based on the Company’s expected performance in the future, with the aim
of retaining and engaging the executives and aligning them with the future vision of the Company.
The sum is defined as 75% of the bonus (short-term variable payment) for “level 5” Directors and
50% of the same bonus for “level 4” Directors, calculated on the value effectively paid for said
bonus. This sum is transformed, as a reference, into a number of ordinary stock issued by Vale
(virtual shares), considering the average price for the Company’s ordinary stock over the last
sixty trading days of the previous year. Should the executive remain with the Company, at the end
of three years, the number of virtual shares is transformed into a pecuniary value by the average
price of the ordinary stock issued by the Company over the last sixty trading days in the third
year. The program also compares the Company’s performance against twenty other companies of a
similar size (peer group); should Vale come out first in this ranking, the amount calculated is
increased by 50%. This percentage is reduced on a sliding scale, such that from first to fifth
place, the percentage remains the same, and as of 15th place in the ranking, no payment is made.
The program was introduced in 2007, the first payment having been made in January 2010.
Matching
Like the ILP, Matching is a variable, long-term form of compensation based on the Company’s
expected performance in the future. To be eligible to take part in the Matching scheme, an
executive should allocate a percentage of his/her bonus (short-term variable compensation) for the
purchase of Class A preferred stock issued by Vale, through the mediation of a pre-defined
financial institution, under market conditions, on the days set in the scheme, without any benefit
being offered by Vale. The percentage bonus that may be allocated per executive for participating
in the Matching scheme is based on an assessment of their performance and potential. Those
executives who acquire shares under the terms and conditions of the Matching scheme on the
stipulated dates and who are still in the employ of Vale three years after they were acquired and
who have kept the ownership of all the shares purchased will be eligible for a cash prize. At the
end of the three-year period, when the cycle reaches its conclusion, the Managers check that the
terms of the scheme, as set forth in the manual, have been followed. Assuming that the terms of the
plan have been observed, the Company will pay the executive a net value, as a prize, worth the
amount they had purchased in shares as part of the scheme. After the incentive has been paid, the
executives are free to sell the preferred stock issued by Vale that they had acquired to join the
Matching scheme, in compliance with existing legislation. The main aim of this scheme is to
encourage an “owner’s vision”,
while also helping to retain executives and reinforce a sustained performance culture. For further
details, see item 13.4 of the Reference Form.
4
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Non-Statutory Committees
The Company also has two non-statutory committees: the Risk Committee and the Communication
Committee. All the seats on the non-statutory committees are held by the Company’s statutory and
non-statutory directors, who do not receive any extra compensation for this function.
(ii) Proportion of each element to make up the total compensation package
The proportions for 2009 were as shown in the table below:
| % of total compensation package paid as: | ||||||||||||||||||||||||
| Fixed | Long-Term | |||||||||||||||||||||||
| Compensation | Benefits | Profit Share | Incentive | Matching | Total | |||||||||||||||||||
Executive Board |
100 | % | — | — | — | — | 100 | % | ||||||||||||||||
Statutory Board |
32.2 | % | 6.9 | % | 44.6 | % | 9.3 | % | — | 100 | % | |||||||||||||
Non-Statutory Board |
40.7 | % | 18.3 | % | 37.3 | % | 3.7 | %1 | — | 100 | % | |||||||||||||
Fiscal Board |
100 | % | — | — | — | — | 100 | % | ||||||||||||||||
Advisory Committees |
100 | % | — | — | — | — | 100 | % | ||||||||||||||||
Note 1 – Relative to plan arising from the acquisition of Vale Inco Limited.
c. Main performance indicators that are taken into consideration when determining each element of
the compensation package
All the definitions concerning the compensation of Statutory Directors are sustained by market
research, supported by one or more specialized consultancies, assessed by the Executive Development
Committee and approved by the Executive Board.
The main performance indicators are the Company’s performance in comparison with its main
competitors (top five mining companies), its cash flow return on gross investments (CFROGI), as
well as general productivity, safety and environmental indicators.
d. How the compensation package is structured to reflect the development of the performance
indicators
The executives’ performance targets, which are used to structure the payment of their profit share
(bonus), derive from the strategic plan and the budget, both approved by the Executive Board, which
are reviewed each year to sustain the targets and expected results for the Company.
Further, the long-term incentive payments (ILP and Matching scheme) are pegged to some of the
Company’s performance indicators: the price of its shares on the market, and its position relative
to its peer group (a group of twenty companies of a similar size).
e. How the compensation policy is aligned with the Company’s short-, medium- and long-term
interests
As already stressed, the main factor for compensation is the Company’s performance and growth on
the short, medium and long term, in line with its strategic plan, while also assuring shareholder
value. As such, the long-term incentives are structured with a three-year elimination period, and
mirror changes in the Company’s performance indicators.
f. Existence of compensation supported by subsidiaries, and direct or indirect affiliates or
holding companies
One of the Company’s executive directors is also the President and Chief Executive Officer of Vale
Inco Limited, a Vale subsidiary. As such, part of this executive’s fixed compensation and benefits
is paid by Vale Inco Limited.
g. Existence of any compensation or benefits connected to the occurrence of a given corporate
event, such as the sale of the Company’s controlling interest
There is no compensation or benefit for the members of the Fiscal or Executive Boards, Statutory or
Non-Statutory Committees, or the Executive or Non-Executive Board that is in any way connected to
the occurrence of any corporate event.
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13.2 With respect to compensation acknowledged in the results of the last 3 accounting reference
periods and the estimated compensation for the current accounting reference period for the
Executive Board, the Statutory Board and the Fiscal Board
[1]:
Estimates for the Accounting Reference Period to be closed on December 31, 2010
| Executive Board | Statutory Board | Fiscal Board | Total | |||||||||||||
Number of members |
11 full members and 11 deputy members | 8 | 1 | 4 full members and 4 deputy members |
38 | |||||||||||
Annual fixed compensation (in BRL) |
— | — | — | — | ||||||||||||
Salaries or pro-labore fees |
4,554,000.00 | 17,001,252.00 | 1,152,000.00 | 22,707,252.00 | ||||||||||||
Direct and indirect benefits |
— | 3,425,413.00 | — | 3,425,413,00 | ||||||||||||
Compensation for
participation in Committes |
— | — | — | — | ||||||||||||
Other |
— | — | — | — | ||||||||||||
Variable Compensation (in BRL) |
— | — | — | — | ||||||||||||
Bonus |
— | 20,902,657.00 | — | 20,902,657.00 | ||||||||||||
Profit share |
— | — | — | — | ||||||||||||
Compensation for
participation in meetings |
— | — | — | — | ||||||||||||
Commissions |
— | — | — | — | ||||||||||||
Other |
— | — | — | — | ||||||||||||
Post-employment benefits |
— | — | — | — | ||||||||||||
Employment cessation benefits |
— | 7,422,638.00 | 2 | — | 7,422,638.00 | |||||||||||
Stock-based compensation |
— | 23,575,073.00 | 3 | — | 23,575,073.00 | |||||||||||
Amount of compensation per board
or committee |
4,554,000.00 | 72,327,03.00 | 1,152,000.00 | 78,033,033.00 | ||||||||||||
Notes:
| 1 | – Upon the expectation that the two vacancies in the Executive Board be fulfilled. |
|
| 2 | – Payments made to three former Executive Managers who quit the Company in the accounting
reference periods closed in 2008 (2) and 2009 (1). |
|
| 3 | – Taking into consideration the amounts described under item 13.1(b) above with respect to ILP
Program. |
Accounting reference period closed on December 31, 2009
| Executive Board | Statutory Board | Fiscal Board | Total | |||||||||||||
Number of members |
11 full members and 10 deputy members | 6.33 | 4 full members and 3 deputy members |
34 | ||||||||||||
Annual fixed compensation (in BRL)
Salaries or pro-labore fees |
||||||||||||||||
Salaries or pro-labore fees |
3,249,794.00 | 13,763,807.00 | 824,000.00 | 17,837,601.00 | ||||||||||||
Direct and indirect benefits |
— | 2,975,951.00 | — | 2,975,951.00 | ||||||||||||
Compensation for participation in
Committes |
— | — | — | — | ||||||||||||
Other |
— | — | — | — | ||||||||||||
Variable Compensation (in BRL) |
— | — | — | — | ||||||||||||
Bonus |
— | 19,057,843.00 | — | 19,057,843.00 | ||||||||||||
Profit share |
— | — | — | — | ||||||||||||
Compensation for participation in
meetings |
— | — | — | — | ||||||||||||
Commissions |
— | — | — | — | ||||||||||||
Other |
— | — | — | — | ||||||||||||
Post-employment benefits |
— | — | — | — | ||||||||||||
Employment cessation benefits |
— | 2,981,751.00 | 2 | — | 2,981,751.00 | |||||||||||
Stock-based compensation |
— | 3,985,738.00 | 3 | — | 3,985,738.00 | |||||||||||
Amount of compensation per board or
committee |
3,249,794.00 | 42,765,090.00 | 824,000.00 | 46,838,884.00 | ||||||||||||
Notes:
| 1 | – The criterion adopted was the annual average number of members of the Statutory Board
as per the monthly records. For the other boards and committees, the number of members remained
constant throughout the year. |
|
| 2 | – This amount includes payments made to 2 Executive Managers whose contracts were rescinded in
Dec 2008 and Mar 09, respectively. |
|
| 3 | – Amounts paid within the scope of the ILP Program, as described under item 13.1(b) above. |
Pursuant to the provisions of art. 67 of CVM directive no. 480/09, no information concerning 2007
and 2008 accounting reference period shall be submitted.
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13.3 With respecto to variable compensation in the last 3 accounting reference periods and
compensation estimated for the current accounting reference period for the Executive Board, the
Statutory Board and the Fiscal Board:
Estimates for the accounting reference period to be closed on December 31, 2010
| Executive Board | Statutory Board | Fiscal Board | Total | |||||||||||||
Number of members |
11 full members and 11 deputy members | 8 | 1 | 4 full members and 4 deputy members |
38 | |||||||||||
Bonus (em BRL)
|
||||||||||||||||
Minimum amount
estimated by
compensation
plan |
— | 0 | — | 0 | ||||||||||||
Maximum amount
estimated by
compensation
pla |
— | BRL 26,615,414.00 | 2 | — | BRL 26,615,414.00 | |||||||||||
Amount
estimated by
the
compensation
plan if
pre-established
goals are met |
— | BRL 17,743,609.00 | 3 | — | BRL 17,743,609.00 | |||||||||||
Profit share (em BRL)
|
||||||||||||||||
Minimum amount
estimated by
compensation
plan |
— | — | — | — | ||||||||||||
Maximum amount
estimated by
compensation
pla |
— | — | — | — | ||||||||||||
Amount
estimated by
the
compensation
plan if
pre-established
goals are met |
— | — | — | — | ||||||||||||
Notes:
| 1 | – Taking into consideration 2 vacant positions in the Executive Board. |
|
| 2 | – Amount stands for 150% of Fixed Annual Compensation paid to the Statutory Board. |
|
| 3 | – Amount stands for 100% of Fixed Annual Compensation paid to. |
Accounting reference period closed on December 31, 2009
| Executive Board | Statutory Board | Fiscal Board | Total | |||||||||||||
Number of members |
11 full members and 11 deputy members | 7 | 1 | 4 full members and 3 deputy members |
37 | |||||||||||
Bonus (em BRL)
|
||||||||||||||||
Minimum amount
estimated by
compensation
plan |
— | 0 | — | 0 | ||||||||||||
Maximum amount
estimated by
compensation
pla |
— | BRL 23,153,617.00 | 2 | — | BRL 23,153,617.00 | |||||||||||
Amount
estimated by
the
compensation
plan if
pre-established
goals are met |
— | BRL 15,435,745.00 | 3 | — | BRL 15,435,745.00 | |||||||||||
Amount actually
acknowledged in
the formal
results |
— | BRL 19,057,843.00 | — | BRL 19,057,843.00 | ||||||||||||
Profit share (em BRL)
|
||||||||||||||||
Minimum amount
estimated by
compensation
plan |
— | — | — | — | ||||||||||||
Maximum amount
estimated by
compensation
pla |
— | — | — | — | ||||||||||||
Amount
estimated by
the
compensation
plan if
pre-established
goals are met |
— | — | — | — | ||||||||||||
Amount actually
acknowledged in
the formal
results |
— | — | — | — | ||||||||||||
Notes:
| 1 | – Taking into consideration one Executive manager do whose contract was rescinded during
the accounting reference period of 2009. |
|
| 2 | – Amount stands for 150% of Fixed Annual Compensation paid to the Statutory Board. |
|
| 3 | – Amount stands for 100% of Fixed Annual Compensation paid to. |
Pursuant to the provisions of art. 67 of CVM directive no. 480/09, no information concerning 2007
and 2008 accounting reference period shall be submitted.
7
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13.4 With respect to the stock-based compensation plan for the Executive Board and the Statutory
Board, which was in force in the last accounting reference period and which is estimated for the
current accounting reference period corrente:
The Company has two stock-based compensation plans for the Statutory Board, which are not extended
to the Executive Board. Neither plan grants permission for Company stock purchasing option, but
only the payment of a bonus as per the market quotation for the Company stock.
a. General Terms and Conditions
ILP Plan (Long-Term Incentive Plan, as per the acronym in Portuguese)
Long-term variable payment based on the Company’s expected performance in the future, with the aim
of retaining and engaging the Managers and aligning them with the future vision of the Company. The
sum is defined as 75% of the bonus (profit share) for Executive Directors and 125% of the bonus
(profit share) for the calculated on the value effectively paid for said bonus, and transformed, as
a reference, into a number of ordinary stock issued by Vale (virtual shares), considering the
average price for the Company’s ordinary stock over the last sixty trading days of the previous
year. Should the executive remain with the Company, at the end of three years, the number of
virtual shares is transformed into a pecuniary value by the average price of the ordinary stock
issued by the Company over the last sixty trading days in the third year. The program also compares
the Company’s performance against twenty other companies of a similar size (peer group); should
Vale come out first in this ranking, the amount calculated is increased by 50%. This percentage is
reduced on a sliding scale, such that from first to fifth place, the percentage remains the same,
and as of 15th place in the ranking, no payment is made. The program was introduced in 2007, the
first payment having been made in January 2010.
• Matching. Like the ILP, Matching is a variable, long-term form of compensation based on the
Company’s expected performance in the future. To be eligible to take part in the Matching scheme,
an executive should allocate a percentage of his/her bonus (short-term variable compensation) for
the purchase of Class A preferred stock issued by Vale, through the mediation of a pre-defined
financial institution, under market conditions, on the days set in the scheme, without any benefit
being offered by Vale. The percentage bonus that may be allocated per executive for participating
in the Matching scheme is based on an assessment of their performance and potential. Those
executives who acquire shares under the terms and conditions of the Matching scheme on the
stipulated dates and who are still in the employ of Vale three years after they were acquired and
who have kept the ownership of all the shares purchased will be eligible for a cash prize. At the
end of the three-year period, when the cycle reaches its conclusion, the Managers check that the
terms of the scheme, as set forth in the manual, have been followed. Assuming that the terms of the
plan have been observed, the Company will pay the executive a net value, as a prize, worth the
amount they had purchased in shares as part of the scheme. After the incentive has been paid, the
executives are free to sell the preferred stock issued by Vale that they had acquired to join the
Matching scheme, in compliance with existing legislation. The main aim of this scheme is to
encourage an “owner’s vision”, while also helping to retain executives and reinforce a sustained
performance culture.
b. Major Plan Objectives
The major objectives of both the ILP and the Matching Plan are retention of the Company`s major
executives by fostering their engagement to the Company and encouraging a “stockholder view”, so
that they become committed to mid and long term results.
c. How the plans contribute for the achievement of these objectives
Both the ILP and the Matching Plan promote the aligment of the stockholders`and the statutory board
members`interests, as they ensure gains for the board members only as long as there are gains for
the Company as well.
d.
Where the plans fit into the Company’s compensation policy
Both the ILP and the Matching Plan fit into Vale`s compensation policy once they constantly foster
a competitiveness level that complies with the Company business and the competitive market context.
Both the ILP and the Matching Plan have been designed upon the support provided by specialized
consulting servicees and upon the consideration of domestic and international market trends and
moves.
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e. How the plans promote the alignment between management and the Company interests at short, mid
and long term
The design of both the ILP and the Matching Plan lies upon the executive`s annual performance and
its baseline is the profit share bonus as assigned incentives. The Plans also comprise the
Company`s performance rate upon company stocks fluctuated value in the past three years and the
Company`s performance relative to other companies of similar size within the same industry and the
same reference period.
f. Maximum number of comprised stocks
Not applicable. No stock purchasing option is granted within the scope of either the ILP or the
Matching Plan. The number of virtual ordinary stocks granted as reference within the scope of ILP
plan varies according to each executive`s profit share bonus and the average quotation for Vale`s
issued stocks within a specific number of stock market floor sessions prior to such grant. Within
the scope of the Matching Plan, an executive is given the option to allocate 30 or 50% of his/her
bonus to purchase the Company`s class A preferred stocks and so become elligible to the plan.
g. Maximum number of options to be granted
Not applicable. No stock purchasing option is granted within the scope of either the ILP or the
Matching Plan.
h. Stock purchasing conditions
Not applicable. No Company stock purchasing option is granted within the scope of either the ILP or
the Matching Plan. Once assessed, the amount owed to executives within the scope of either Plan is
paid in cash.
i. Criteria for stock pricing or option reference period
Not applicable. As no stock purchasing option nor stock purchase are granted within the scope of
either Plan, it makes no sense setting criteria for stock pricing or option reference period.
With respect to the ILP Plan, the amount owed to executives is calculated as per the valuation of a
given number of Vale`s virtual ordinary stocks within the period of the past three years, and is
based upon the stock average initial quotation of the last 60 stock market floor sessions prior to
the incentive grant, and the stock average final quotation at the closing of the last 60 stock
market floor sessions of the third year. This figure is then multiplied by a Company performance
factor as a relative value to a peer group comprising 20 similar-size global companiies. Face to
the Company ranking within the latter global companies group, the ILP Plan may have its amount
expanded by up to 50% or it might be even zeroed.
However, for the Matching Plan, the net amount to be paid to executives as incentives is calculated
upon the number of Company class A preferred stocks purchased by the executive in order to become
eligible to the Plan.
j. Criteria for establishing the reference period
Not applicable. As mentioned above, no Company stock purchasing option is granted within the scope
of either the ILP or the Matching Plan. Therefore, there is no reference period.
However, both the ILP and the Matching Plan preestablish that the payment of incentives be made after a three-year grace period.
However, both the ILP and the Matching Plan preestablish that the payment of incentives be made after a three-year grace period.
k. Liquidation conditions
Both the ILP and the Matching Plan pre-establish that premiums be paid in cash.
l. Restrictions to stock transfer
With respect to the Matching Plan, the executive will lose his/her right to the premium if he/she
transfers, within the three-year period, any Company preferred stock that is plan-bonded.
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Not applicable to the ILP Plan, though, once this Plan`s participants are not required to retain
their stockholding position in the company nor are they granted any stocks within the scope of the
Plan.
m. Criteria and events that, upon occurrence, shall result in the plan suspension, change or
extinction
With respect to the Matching Plan, any transference of Vale`s issued preferred stocks that are
plan-bonded before the three-year grace period or the executive`s severance generate the extinction
of any rights whatsoever that they would otherwise be entitled to within the scope of the Plan.
However, with respect to the ILP Plan, the executive`s severance generates the extinction of any
rights whatsoever that they would otherwise be entitled to within the scope of the Plan.
n. Effects generated by the Company`s Board and Committee Manager`s departure upon his/her rights
as provided by the stock-based compensation plan
As the Plan works as a retention mechanism, if the Manager resigns, he/she shall lose all his/her
rights to the long-term plans – ILP and Matching. In case the Manager`s contract is rescinded or no
t renewed by the Company, the participant shall receive all the ILP Plan incentives he had
purchased prior to the contract rescision or termination date.
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13.5 Number of stocks or direct or indirect stock holdings, either in Brazil or overseas, and other
securities that might be converted into stock or quotas, issued by the Company, direct or indirect
affiliates, subsidiaries or companies under common control, by members of the Executive Board, of
the Statutory Board or the Fiscal Board, grouped per board or committee, on the closing date of the
last accounting reference period:
| (a) | the number of stocks or direct or indirectly quotas of stocks issued by Vale either in Brazil
or overseas held by its Board of Directors members, Executive Officers and Fiscal Council
members, brouped by board or committee, on the closing day of the last accounting reference
period: |
VALE S.A.
| Stockholders | Common | Preferred | ||||||
Board of Directors |
1.284 | 54.075 | ||||||
Executive Officers |
156.056 | (*) | 953.345 | (*) | ||||
Fiscal Council |
0 | 0 | ||||||
Total |
157.340 | 1.007.420 | ||||||
| (*) | Including 20.00 VALE shares and 70.560 VALE.P shares owned as American Depositary Receipts
(ADRs), at the New York Stock Exchange. |
| (b) | the number of stocks or direct or indirectly quotas of stocks issued by Vale either in Brazil
or overseas held by its Board of Directors members, Executive Officers and Fiscal Council
members, grouped by board or committee, on the closing day of the last accounting reference
period: |
VALEPAR S.A.
| Stockholders | Common | Preferred | ||||||
Board of Directors |
13 | 0 | ||||||
Executive Officers |
0 | 0 | ||||||
Fiscal Council |
0 | 0 | ||||||
Total |
13 | 0 | ||||||
BRADESPAR S.A.
| Stockholders | Common | Preferred | ||||||
Board of Directors |
408 | 1.648 | ||||||
Executive Officers |
0 | 0 | ||||||
Fiscal Council |
2104 | 6384 | ||||||
Total |
2.512 | 8.032 | ||||||
BNDES PARTICIPAÇÕES S.A. — BNDESPAR
| Non-convertible | Convertible | |||||||
| Debentures | Debentures | |||||||
| Stockholders | (BNDP-41) | (BNDP-42) | ||||||
Board of Directors |
0 | 0 | ||||||
Executive Officers |
0 | 0 | ||||||
Fiscal Council |
10 | 1 | ||||||
Total |
10 | 1 | ||||||
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MITSUI & CO., LTD
| Stockholders | Common | Preferred | ||||||
Board of Directors |
50.140 | 0 | ||||||
Executive Officers |
0 | 0 | ||||||
Fiscal Council |
0 | 0 | ||||||
Total |
50.140 | 0 | ||||||
BANCO DO BRASIL S.A.
| Subscription | ||||||||
| Stockholders | Common | Bonds | ||||||
Board of Directors |
3.307 | 5.021 | ||||||
Executive Officers |
0 | 0 | ||||||
Fiscal Council |
1068 | 0 | ||||||
Total |
4.375 | 5.021 | ||||||
BANCO BRADESCO S.A.
| Stockholders | Common | Preferred | ||||||
Board of Directors |
165 | 24.145 | ||||||
Executive Officers |
2.970 | 22.953 | ||||||
Fiscal Council |
23350 | 65200 | ||||||
Total |
26.485 | 112.298 | ||||||
| (c) | number of stocks or direct or indirectly quotas of stocks and other securities that might be
converted in stocks or quotas of stocks issued either in Brazil or overseas by Vale’s
affiliates and subsidiaries held by its Board of Directors members, Executives Officers and
Fiscal Council members, grouped by board or committee on the closing day of the last
accounting reference period: |
FERROVIA CENTRO ATLÂNTICA S.A.
| Stockholders | Common | Preferred | ||||||
Board of Directors |
0 | 0 | ||||||
Executive Officers |
0 | 0 | ||||||
Fiscal Council |
0 | 0 | ||||||
Total |
0 | 0 | ||||||
FERROVIA NORTE SUL S.A.
| Stockholders | ON | PN | ||||||
Board of Directors |
0 | 0 | ||||||
Executive Officers |
1 | 0 | ||||||
Fiscal Council |
0 | 0 | ||||||
Total |
1 | 0 | ||||||
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LOG-IN – LOGÍSTICA INTERMODAL S/A
| Stockholders | Common | Preferred | ||||||
Board of Directors |
0 | 0 | ||||||
Executive Officers |
402 | 0 | ||||||
Fiscal Council |
0 | 0 | ||||||
Total |
402 | 0 | ||||||
MRS LOGÍSTICA S.A.
| Stockholders | Common | Preferred | ||||||
Board of Directors |
0 | 0 | ||||||
Executive Officers |
0 | 0 | ||||||
Fiscal Council |
0 | 0 | ||||||
Total |
0 | 0 | ||||||
PT INTERNATIONAL NICKEL INDONESIA TBK
| Stockholders | Common | Preferred | ||||||
Board of Directors |
0 | 0 | ||||||
Executive Officers |
0 | 0 | ||||||
Fiscal Council |
0 | 0 | ||||||
Total |
0 | 0 | ||||||
13.6 With respect to stock-based compensation, as acknowledged in the past three accounting
reference periods and as estimated for the current accounting reference period, for Executive Board
and the Statutory Board.
The Matching Plan was established in 2008 and provides for a three-year grace period. Therefore,
the incentive within the scope of this Plan shall only be due by the Company in April 2011.
As informações abaixo se referem ao Plano de Incentivo a Longo Prazo (ILP) descrito detalhadamente
no item 13.4 (I). Como o Plano não contempla a outorga de opções de compra de ações, mas apenas se
baseia nas cotações das ações ordinárias da Companhia para definir o valor em espécie a ser pago a
título de incentivo aos diretores executivos, grande parte das informações das tabelas abaixo não é
aplicável.
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Estimates for the accounting reference period to be closed on December 31, 2010
| Executive Board | Statutory Board | Total | ||||||||||
Number of members |
— | 6 | 6 | |||||||||
With respect to each option grant
|
||||||||||||
Grant datea |
— | March 2010 | — | |||||||||
Number of granted options |
— | — | — | |||||||||
Deadline for options to become redeemable |
— | January 2013 | — | |||||||||
Deeadline for redeeming options |
— | — | — | |||||||||
Grace period for stock transfer |
— | — | — | |||||||||
Pondered average price within accounting
reference period for each of the following
option groups |
||||||||||||
Outstanding at the beginning of the
accounting reference period |
— | — | — | |||||||||
Not redeemed throughout accounting
reference period |
— | — | — | |||||||||
Redeemed within accounting reference period |
— | — | — | |||||||||
Expired within accounting reference period |
— | — | — | |||||||||
Fair option price on grant date |
— | BRL 18,986,037.00 | 1 | BRL 18,986,037.00 | ||||||||
Potential dilution in case all granted options
were redeemed |
— | — | — | |||||||||
Note: |
||
| 1 | – Calculations performed upon bonus % (profit share) as paid on March 2010. |
|
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Accounting reference period closed on December 31, 2009
| Executive Board | Statutory Board | Total | ||||||||||
Number of members |
— | 7 | 5 | |||||||||
With respect to each option grant
|
||||||||||||
Grant datea |
— | February 2009 | — | |||||||||
Number of granted options |
— | — | — | |||||||||
Deadline for options to become redeemable |
— | January 2012 | — | |||||||||
Deeadline for redeeming options |
— | — | — | |||||||||
Grace period for stock transfer |
— | — | — | |||||||||
Pondered average price within accounting reference
period for each of the following option groups
|
||||||||||||
Outstanding at the beginning of the accounting
reference period |
— | — | — | |||||||||
Not redeemed throughout accounting reference
period |
— | — | — | |||||||||
Redeemed within accounting reference period |
— | — | — | |||||||||
Expired within accounting reference period |
— | — | — | |||||||||
Fair option price on grant date |
— | BRL 14,566,434.00 | 1 | BRL 14,566,434.00 | ||||||||
Potential dilution in case all granted options were
redeemed |
— | — | — | |||||||||
Note: |
||
| 1 | – Calculations performed upon bonus % (profit share) as paid on February 2009. |
|
13.7 With respect to outstanding options for the Executive Board and the Statutory Board at the
closing of the last accounting reference period
Not applicable. See items 13.4 and 13.6 above.
13.8 With respect to redeemed and delivered options for the Executive Board and the Statutory
Board, in the past three accounting reference periods
Not applicable. See items 13.4 and 13.6 above.
13.9 Summary of relevant information aiming at a broader understanding of data presented under
items 13.6” through 13.8 above, as well as an explanation of the pricing method used for stock and
option values
Not applicable.
13.10 Private Pension Funds in force granted to members of the Executive Board and the Statutory
Board
Pursuant to contract provisions, the Company pays for both the employer`s and the employee`s share,
up to 9% of the fixed compensation, to Valia – Fundação Vale do Rio Doce de Seguridade Social (Vale
do Rio Doce Social Security Foundation), or to any other private pension fund chosen by the
Statutory Board member.
At Valia, the minimum required age for benefit eligibility, including a retirement plan, is 45
years of age, after having contributed for the given plan for a minimum grace period of 5 years.
Six of the seven current members of the Executive Board are members of this plan and they have all
already acquired the right to enjoy the benefits.
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Valia – Fundação Valor do Rio Doce de Seguridade Social
| Executive Board | Statutory Board | Total | ||||||||||
Number of members |
11 full members and 10 deputy members | 5 | 26 | |||||||||
| Plan name | Pre-Established Contribution Plan “Vale Mais” |
|||||||||||
Number of managers that are eligible for
retirement benefits |
— | 5 | 5 | |||||||||
Eligibility to early retirement |
— | — | — | |||||||||
Updated value of accumulated contributions to
social security and pension plan up until the
closing of the last accounting reference period,
minus amounts paid by managers |
— | BRL 5,015,938.00 | BRL 5,015,838.00 | |||||||||
Total accumulated amount of contributions paid
throughout the last accounting reference period,
minus amounts paid by managers |
— | BRL 854,559.00 | BRL 854,559.00 | |||||||||
Eligibility for advanced redemption and conditions |
— | — | — | |||||||||
One of the members of the Statutory Board is a member of a private pension fund managed by Bradesco
Vida e Previdência S.A., which is described below:
Bradesco Vida e Previdência S.A.
| BD Plan (Pré-established Benefits) and PGBL Plan (Pre-established |
||||
| Plan name | Contribution) | |||
Number of managers that are eligible for
retirement benefits |
1 | |||
Eligibility to early retirement |
1 | |||
Updated value of accumulated contributions to
social security and pension plan up until the
closing of the last accounting reference period,
minus amounts paid by managers |
BRL 3,282,520.00 | |||
Total accumulated amount of contributions paid
throughout the last accounting reference period,
minus amounts paid by managers |
BRL 425,884.00 | |||
Eligibility for advanced redemption and conditions |
— | |||
13.11 Managers`Average Compensation
Information not disclosed due to injunctive relief granted by the Honorable Judge of the 5th
Circuit Court of Federal Justice of Rio de Janeiro to IBEF/RJ, to which Vale and the company
executives are linked.
13.12 Contract agreements, insurance policies or other instruments that might underlie the
compensation or indemnity mechanisms applicable to managers in the occurrence of dismissal or
retirement, and the financial burden they result in for the Company
The contracts signed by members of the Statutory Board have a provision for indemnity for contract
rescission or non-renewal once such events are generated by the Company. In the latter case, the
following amounts and conditions are provided for: (i) 2 (two) fixed annual salaries for the
Managing President; or (ii) 1 (one) fixed annual salary for the Executive Managers. Indemnity
payment is made in four quarterly payments and conditioned to a non-compete agreement to be in
force for the following 12 months.
The contract also provides for a Life Insurance Policy, whose insured capital is worth twice as
much as the fixed annual compensation, for the purposes of death or total permanent disability
(TPD).
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No other type of contract agreement is drawn with members of the Executive Board or the Fiscal
Board. The same applies to any other types of contract agreements, life insurance policies or any
other instruments that might underlie compensation or indemnity mechanisms in case an executive is
dismissed or retires.
13.13
With respect to the last three accounting reference periods, disclose the percentage of
total compensation for each board or committee as acknowledged in the Company results and
which applies to members of the Executive Board, of the Statutory Board or the Fiscal Board,
that are somehow connected to direct or indirect affiliates, in compliance with the accounting
rules that govern this matter.
| Board or Committee | Accounting reference period closed on December 31, 2009 | |||
Executive Board |
83.37 | % | ||
Statutory Board |
0 | % | ||
Fiscal Board |
25.00 | % | ||
Pursuant to the provisions of art. 67 of CVM directive no. 480/09, no information concerning 2007
and 2008 accounting reference period shall be submitted.
13.14 With respect to the last three accounting reference periods, disclose the amounts as
acknowledged in the Company results for compensation paid to members of the Executive Board, of the
Statutory Board or the Fiscal Board, grouped by board or committee, for any purpose other than the
function they perform, such as commissions, consulting or advisory services.
No payments of any other type rather than for the function they perform were made to any member of
the Executive Board, of the Statutory Board or the Fiscal Board.
13.14
With respect to the last three accounting reference periods, disclose the amounts as
acknowledged in the results released by direct or indirect affiliates, subsidiaries or
companies under common control, by members of the Executive Board, of the Statutory Board or
the Fiscal Board, grouped per board or committee, specifying the purpose of such amounts paid
to the referred individuals.
| Board or Committee | Accounting reference period closed on December 31, 2009 | |||
Executive Board |
— | |||
Statutory Board |
BRL 707,352.00 ‘(Annual fFxed Compensation: BRL 515,523.00 / Direct and indirect benefits: BRL 191,829.00) | |||
Fiscal Board |
— | |||
Note:
| 1 | – The above amount refers to compensation paid to an Executive Manager working a tour controlled
company Vale Inco Limited, in Canada. |
De acordo com a faculdade prevista no art. 67 da Instrução CVM nº 480/09, não serão apresentadas as
informações relativas aos exercícios de 2007 e 2008.
13.16 Other information that the Company might judge relevant
There are no other relevant information with respect to item “13”.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Vale S.A. (Registrant) |
||||
| Date: April 14, 2010 | By: | /s/ Roberto Castello Branco | ||
| Roberto Castello Branco | ||||
| Director of Investor Relations | ||||