The Company's Management by Objectives System (DEO) is a management model that reflects the strategy in objectives measured by indicators linked to the results of said objectives that allow us to align the strategies with the different aspects of the Company. This System is used to define variable compensation, according to the degree of fulfilment of these objectives. This system applies for all employees which have variable compensation as part of their wages.
The DEO is composed of three blocks of targets which are weighted in accordance to the impact that each level has on the Company’s strategy and its closeness to the operations of the Company: The Global Targets, common to all positions and profiles; the Objectives of the area of influence, related to business objectives and functional areas; and finally added to the Individual Targets, regarding direct strategic and leadership responsibilities.
This method is a balanced scorecard system, which is consistent with the strategy of the organization and considers allocation and control elements. This contributes to planning and management, facilitating communication, providing better information at all levels, connecting financial perspectives with resource management and service to our customers as well as internally contributing to the efficient management and the generation of opportunities for improvement in the capacities of the key people, by evaluating the achievement of goals, which is necessary for the management of compensation as a consequence and not the reason for the existence of the goal setting model.
The company has predefined metrics for the CEO's variable compensation, which are aligned with the company's strategy and long-term results, including internal financial goals (meeting company goals such as recurring net income; execution of our budgets, cash flow from operating activities, EBIT), external perception metrics (performance on sustainability indices), environmental indicators (carbon footprint, energy efficiency and waste treatment) and social metrics (health and safety indicators and the implementation of sustainable development programs).
