Compensation components
Executive Board compensation includes three main components: base salary, profit sharing and the Long-Term Incentive Plan. It is complemented by contributions to the company pension plan as well as additional benefits. Additional compensation arrangements also exist for the members of the Executive Board, in particular malus and clawback provisions and a Share Ownership Guideline.
The performance-related compensation elements – profit sharing and the Long-Term Incentive Plan – are based on a multi-year performance period and as such are fully oriented toward the company’s long-term development. In addition, there is a strong reference to the company’s share price, to provide for special focus on our shareholders’ interests. The key performance indicators selected for variable compensation are derived from the corporate strategy and form part of our central controlling system. In this way, the variable compensation of the Executive Board members is used as a strong steering tool to ensure a focus on our objective of long-term profitable growth accompanied by strong cost discipline.
The following diagram provides an overview of all the elements of the compensation system for Executive Board members:
