Principles of Board of Management remuneration

Goals

The remuneration system for the Board of Management members aims to promote the Company’s business strategy and its sustainable long-term development. When determining the total remuneration of the individual Board of Management members, Daimler takes the condition of the Company into account as well as the members’ areas of activity and responsibility. This is done in line with legal requirements and with a clear focus on the competition. A balanced combination of non-performance-related (fixed) and performance-related (variable) components of remuneration that also takes into account suitably ambitious performance parameters and performance indicators provides the Board of Management with an incentive to implement the corporate strategy and ensure the Group’s sustained success. In this way, Daimler reconciles the interests of all stakeholders, in particular those of the shareholders as the owners of the Company and those of the employees.

Practical implementation

For each upcoming financial year, the Presidential Committee at first prepares a review by the Supervisory Board of the system and level of remuneration on the basis of a comparison with competitors. The main focus is on checking for appropriateness, based on a horizontal and a vertical comparison.

In the horizontal comparison, the following aspects are given particular attention in relation to a group of comparable companies in Germany:

  • the effects of the individual fixed and variable components, that is, the methods behind them and their performance parameters;
  • the relative weighting of the components, that is, the relationship between the fixed base salary and the short, medium and long-term variable components;
  • and the amount of the target remuneration consisting of a fixed base remuneration, an annual bonus as a short and medium-term variable component, and a long-term variable remuneration, also with consideration of entitlement to a retirement pension and fringe benefits.

The vertical comparison focuses on the ratio of Board of Management remuneration to the remuneration of the senior executives and the entire workforce of Daimler AG in Germany, also in terms of development over time. The Supervisory Board has defined the group of senior executives for this purpose. It consists of the Executive Vice Presidents and the management level 1 of Daimler AG in Germany.

In the event of significant changes in the relationship between the remuneration of the Board of Management and the horizontal and vertical comparison groups the Supervisory Board establishes the causes and in the absence of objective reasons for the deviations adjusts the remuneration of the Board of Management as necessary.

In carrying out this review of the appropriateness of the remuneration system and the remuneration, the Presidential Committee and the Supervisory Board consult independent external advisors. This was also done in late 2019. The result confirmed that the remuneration system for 2019 complied with the requirements of applicable law.

If the review results in a need for changes to the remuneration system for the Board of Management, the Presidential Committee submits the relevant proposals to the entire Supervisory Board for its approval.

On the basis of the approved remuneration system, the Supervisory Board decides at the beginning of the year on the base and target remuneration for the individual members of the Board of Management as well as on total remuneration limits. It also decides on the relevant performance parameters and the respective targets that are to be used in the bonus calculations (the short and medium-term variable remuneration components) for the upcoming financial year. Furthermore, sustainability-based non-financial targets are drawn up for the Board of Management as a whole, as are transformation targets oriented toward the implementation of future-focused measures for the Group’s technological and sustainable realignment. Since the 2019 financial year, the annual bonus for the Board of Management and for managers has been calculated according to uniform goals/criteria and a uniform system.

For the long-term variable component of remuneration, which is referred to as the Performance Phantom Share Plan (PPSP), the Supervisory Board sets an amount to be granted for the upcoming financial year in the form of an absolute amount in euros and sets the respective performance targets. The uniform approach for the targets/criteria and the PPSP system has been in force for the Board of Management and for managers since it was introduced in 2005.

After the end of each financial year, the amount of the annual bonus is determined by measuring the achievement of the financial, non-financial and transformation targets by the Board of Management as a whole. The Presidential Committee then calculates the annual bonus and submits its proposal to the Supervisory Board for its approval.

The amount to be paid out for the long-term variable remuneration component (PPSP) is determined at the end of the four-year plan period and approved for payment after the Presidential Committee and the Supervisory Board have been informed.

The remuneration system was approved by the Annual Shareholders’ Meeting in 2019 with an approval ratio of 97.87 %.

The system of Board of Management remuneration in 2019

The fixed base salary and the annual bonus each comprise approximately 30 % of the target remuneration, while the variable component of remuneration with a long-term incentive effect (PPSP) makes up approximately 40 % of the target remuneration. (See graphic B.44)

Daimler AR2019 B.44 Remuneration structure

As before, only 50 % of the annual bonus is paid out in the March of the following financial year. The other 50 % is paid out a year later (deferral) with the application of a bonus-malus rule, depending on the development of the Daimler share price compared with an automotive index (STOXX Europe Auto Index) (See »Daimler and the Capital Market«), which Daimler AG uses as a benchmark for the relative share-price development. Both the delayed payout of the portion of the annual bonus (with the use of the bonus-malus rule) and the variable component of remuneration from the PPSP with its link to additional, ambitious comparative parameters and to the share price reflect the recommendations of the German Corporate Governance Code as amended on February 7, 2017 and give due consideration to both positive and negative business developments.

The maximum amounts of remuneration of Board of Management members are limited, both overall and with regard to the variable components.

As in the prior year, the maximum amounts of remuneration (cash payments) of the members of the Board of Management were set for financial year 2019 at 1.9 times the target remuneration for its members. It was 1.5 times the target remuneration for its Chairman, who was in office until the end of the Annual Meeting 2019, and is 1.7 times the target remuneration for the new Board of Management Chairman. The target remuneration consists of the base salary, the target annual bonus and the grant value of the PPSP, excluding fringe benefits and retirement benefit commitments. With the inclusion of fringe benefits and retirement benefit commitments from the respective financial year, the maximum limit of total remuneration increases by these amounts. The possible cap on the amount exceeding the maximum limit takes place with the payment of the PPSP issued in the relevant financial year, i.e. for the year 2019, with payment of the PPSP 2019 in 2023. (See table B.45)

B.45 Maximum limit of total remuneration1 2019 (cash payments)

Chairman of the Board of Management 1.7 times the target
remuneration1
Other members of the Board of Management 1.9 times the target
remuneration1
Base salary in 2019
+ target bonus = 100 % of the 2019 base salary
+ PPSP value when granted for 2019
Target remuneration1 2019
Base salary in 2019
+ annual bonus fo
r 2019(50 % paid out in 2020 + 50 % in 2021)
+ PPSP payment for 2019 (in 2023)
incl. dividend equivalent payments
Total remuneration1 in 2019
 
The possible cap on the amount exceeding the maximum limit takes place with the payment of the PPSP for 2019 in 2023.
Excluding fringe benefits and retirement benefit commitments in all cases.

The individual components of the remuneration system are as follows:

The base salary is fixed remuneration relating to the entire year, oriented toward the area of responsibility of each Board of Management member and paid out in twelve monthly installments. (See graphic B.46)

Daimler AR2019 B.46 Base salary

The annual bonus is a short and medium-term variable remuneration, the level of which during the reporting period is primarily linked to the operating profit of the Daimler Group (EBIT) in the form of a comparison of actual and target values. For the past financial year, the Supervisory Board has derived the target value for the annual bonus from the growth targets and the especially ambitious level of the medium-term return that is based on the competition’s performance. (See graphic B.47)

Daimler AR2019 B.47 Annual bonus short and medium term performance related remuneration

The annual bonus is also impacted by the transformation targets set by the Supervisory Board as well as by the sustainability-oriented non-financial targets for the Board of Management as a whole. These factors can raise or lower the annual bonus by up to +/-25 % and +/-10 %, respectively.

Primary reference parameter:

  • comparison of actual EBIT in 2019 with EBIT targeted for 2019.

Amount with 100 % target achievement (target annual bonus):

In 2019, this is equivalent to the respective base salary.

Daimler AR2019 B.48 Overview of the determination of the annual bonus

Range of possible target achievement:

Financial target

The range of possible target achievement is between 0 % and 200 %. The lower limit of this range is 50 % of the EBIT target value; the upper limit is approximately 117 % of the EBIT target value. If the actually achieved EBIT value is at or under the lower limit of the range, the target achievement degree is always 0 %. The total absence of a bonus is therefore possible. If the EBIT target is achieved, the degree of target achievement amounts to 150 %.

If the actually achieved EBIT value is at or above the upper limit of the range, the degree of target achievement is always the maximum 200 %. The range of target achievement develops linearly within the range. (See graphic B.49)

Daimler AR2019 B.49 Financial Target

Transformation targets

The transformation targets represent both quantitative and qualitative aspects. They can add or deduct up to 25 percentage points to/from the degree to which the financial target has been achieved.

In order to take into account the implementation of the future-oriented measures for the technological and sustainable realignment of the Group, the divisions defined key performance indicators and target values at the beginning of financial year 2019 for the future-oriented CASE fields - Connected, Autonomous, Shared & Services, Electric.

This criteria-based consideration of the future-oriented CASE fields was based on assessments of the success of product-related, technical and economic activities/progress. Furthermore, the Company assessed the progress of sustainability/Environment Social Governance (ESG) aspects and the success of strategic M&A activities. The defined key performance indicators are used for measuring the degree to which the transformation targets have been achieved. They also support the corresponding activities, corrections or implementation steps of the Group’s sustainability strategy (for example, investment volume, growth of revenue from digital services, activation and connectivity rates of digital services, proportion of alternative drive systems, emission targets, development discipline with regard to the development progress of products and digital services, number of online contracts, proportion of digital self-services, revenue from mobility services).

After the conclusion of financial year 2019, a comparison of the actual and target values was conducted for the transformation targets of each division. The Supervisory Board derived the Board of Management’s shared degree of target achievement from the divisions’ degrees of target achievement as well as the strategic, organizational and structural contribution of the Board of Management as a whole, taking into account the economic environment and the competitive situation and positioning of the Group. For the financial year 2019 this leads to the addition of 22 % to the degree to which the financial target has been achieved.

Non-financial targets

The non-financial targets, which are oriented toward sustainability and cultural aspects and have been uniform at all management levels since financial year 2019, are divided into four categories. Each category is weighted equally and receives an addition or a deduction of up to 2.5 percentage points to or from the degree of achievement of the financial target. After the end of the financial year, the degree of target achievement is calculated by comparing the target value and the actual value. On this basis, an addition to or a deduction from the degree of financial target achievement of up to a total amount of 10 percentage points is possible. The total of the addition or deduction resulting from the non-financial targets is rounded to two significant figures. For the financial year 2019 this results in an addition of +3 % (rounded).

Specifically:

Achievement of the Group-level targets regarding the further development and permanent establishment of integrity was measured on the basis of certain standardized questions in a global employee survey. This measurement was based on the achieved approval rate of any question and the average approval rate achieved across all questions (integrity indicator). This served as the basis for determining that +2.0 % of the target was achieved at the Group level. (See table B.50)

B.50 Integrity

Degree of target achievement Addition or deduction Integrity
indicator
+ Approval rate
of any question
Excellent 2.5 % > 80 %   > 74 %
Good 2.0 % 71-80 %   65-74 %
Average 1.0 % 61-70 %   60-64 %
Low -2.5 % 60 %   59 %

Quality and/or customer satisfaction targets (quality KPIs of all divisions) were defined by the individual divisions for the financial year. With regard to vehicles, a comparison of the target number and the actual number of claims during a predefined period of time (MIS xx) was carried out. With regard to services, this comparison was carried out by means of a customer satisfaction index. The degree of target achievement at the Group level (-2.5 %) was derived as a weighted average of the individual divisional degrees of target achievement. (See table B.51)

B.51 Quality

Degree of target achievement Addition or deduction of all divisions
Excellent 2.5 % The addition or deduction is dependent on the respective target value, which is defined for each specific division and product.
Good 2.0 %
Average 1.0 %
Low -2.5 %

The degree of the employees’ commitment to the Group (employee engagement) was calculated on the basis of their answers to certain standardized questions in our global employee survey. These answers, together with the participation rate achieved in the employee survey, were used to derive a +1.0 % degree of target achievement at the Group level for the maintenance and enhancement of a high level of satisfaction and motivation among the employees. (See table B.52)

B.52 Employee engagement

Degree of target achievement Addition or deduction engagement + Participation rate
Excellent 2.5 % > 35 % > 70 %
Good 2.0 % 31-35 % 66-70 %
Average 1.0 % 25-30 % 61-65 %
Low -2.5 % 25 % 60 %

A target for the proportion of women in executive positions was defined at the Group level for a period of several years on the basis of Daimler’s in-house guidelines for the proportion of women in management positions (Gender Diversity Aspirational Guidelines), which go beyond the legally obligatory targets. A +2.0 % degree of target achievement was determined for this in a comparison of actual and target values that was conducted at the end of the financial year. (See table B.53)

B.53 Diversity

Degree of target achievement Addition or deduction Gender Diversity
Aspirational Guidelines
Excellent 2.5 % Target overachieved 10 %
Good 2.0 % Target overachieved < 10 %
Average 1.0 % Target achieved
Low -2.5 % Target not achieved

Compliance

Agreements have been reached with all the members of the Board of Management allowing for the partial reduction or complete elimination of the annual bonus for any member who violates the duties of Section 93 of the German Stock Corporation Act (AktG) or in particular the principles laid down in the Company’s Integrity Code. If it is not possible to reduce a future bonus payment or a payment that has yet to be made, the Board of Management member in question will be required to pay back the amount of the bonus reduction. The Supervisory Board has the final decision on all such bonus reductions.

Limit for the annual bonus

The total amount to be paid out from the annual bonus is limited to 2.35 times the base salary of the respective financial year.

The Performance Phantom Share Plan (PPSP) is a variable element of remuneration with long-term incentive effects. At the beginning of the plan, the Supervisory Board specifies a grant value (absolute amount in euros) in the context of setting the individual annual target remuneration. This amount is divided by the relevant average price of Daimler shares calculated over a predefined long period of time, which results in the preliminary number of phantom shares allocated.

Also at the beginning of the plan, performance targets are set for a period of three years (performance period). Depending on the achievement of these performance targets with a possible range of 0 % to 200 %, after three years the phantom shares allocated at the beginning of the plan are converted into the final number of phantom shares allocated.After another plan year has elapsed (retention period), the amount to be paid out is calculated from this final number of phantom shares and the applicable share price at that time. The share price relevant for the payout under this plan is also relevant for allocating the preliminary number of phantom shares for the plan newly issued in the respective year. (See graphic B.54 and table B.55)

Daimler AR2019 B.54 PPSP

B.55 PPSP 2019

dependent upon  
   
Development of
the performance factor
– 50 % relates to the “return on sales” achieved in a three-year comparison
with the defined group of competitors
(See Remuneration Report )
Bandwidth of possible target achievement:
0 % – 200 %1 – 50 % relates to “relative share performance,” i.e. the performance of Daimler’s share in a three-year comparison with the performance of the defined
group of competitors (index).
Bandwidth of possible target achievement:
0 % – 200 %
Development of the
Daimler share price
Price when issued and price at the end of the plan period Bandwidth of possible price development:
maximum of 2.5 times the issue price
Maximum performance development (total cap):
2.5 times the amount granted (including dividend equivalent payments
throughout the plan period)
Stock ownership guidelines
Share purchase obligation of up to 25% of the gross remuneration
until the defined number of shares (between 20,000 and 75,000) has
been purchased (shares to be held until the end of the term of service)
1 Maximum of 195 % if, in the event of target achievement of 195 % – 200 %, the strategic return target has not been reached.

Performance parameters for Plan 2019:

  • 50 % relates to the Group’s return on sales in a three-year comparison with a group of competitors comprising listed vehicle manufacturers with an automotive component of more than 70 % by revenue and an investment-grade credit rating (BMW, Ford, GM, Honda, Hyundai, Isuzu, Kia, Mazda, Nissan, Paccar, Subaru, Suzuki, Toyota, Volvo and Volkswagen). For the measurement of success, the competitors’ average return on sales is calculated over a period of three years. Target achievement occurs to the extent to which Daimler’s return on sales deviates by a maximum of +/-2 percentage points from 105 % of the calculated average of the competitors.
  • Target achievement of 100 % only occurs when the average return on sales of the Daimler Group reaches 105 % of the revenue-weighted average return on sales of the group of competitors. Maximum target achievement of 200 % occurs if Daimler’s return on sales exceeds 105 % of the revenue-weighted average of the competitors by 2 percentage points or more. An additional limitation was implemented starting with PPSP 2015: If a target achievement of between 195 % and 200 % occurs, the maximum target achievement calculated from the performance parameter of return on sales compared to the group of competitors will only be deemed to be 200 % if the actual return on sales for Daimler’s automotive business reaches at least the strategic target for return on sales in the third year of the performance period. Otherwise, target achievement will be limited to 195 %.
  • Target achievement of 0 % occurs if Daimler’s return on sales is 2 percentage points or more lower. In the deviation range of +/- 2 percentage points, target achievement varies in proportion to the deviation.
  • 50 % relates to “relative share performance,” i.e. the performance of Daimler’s share in a three-year comparison with the performance of the defined group of competitors (index). If the performance of Daimler’s share (in percent) is the same as that of the index (in percent), target achievement is deemed to be 100 %. If the performance of Daimler’s share price (in percent) is 50 percentage points or more below (above) the performance of the index, target achievement is deemed to be 0 % (200 %). In the deviation range of +/- 50 percentage points, target achievement varies in proportion to the deviation.

Range of possible target achievement:

0 to 200 %, that is, the plan has an upper limit. It may also be zero.

Value upon allocation:

Determined annually by the Supervisory Board; for 2019, approximately 1.4 times the base salary.

Value of the phantom shares on payout:

During the four-year period between the allocation of the preliminary phantom shares and the payout of the plan proceeds, the phantom shares earn a dividend equivalent in the amount of the actual dividend paid on ordinary Daimler shares.

The value of the phantom shares to be paid out after the conclusion of the plan period depends on target achievement measured according to the criteria described above and on the share price relevant for the payout. This share price is limited to 2.5 times the share price at the beginning of the plan. In addition, the amount to be paid out is limited to 2.5 times the absolute euro amount specified at the beginning of the plan, which is relevant for the preliminary number of phantom shares allocated. This maximum amount also includes the dividend equivalent paid out during the four-year plan period.

The terms governing the PPSP include a provision that allows for the partial reduction or complete elimination of the annual bonus for any member of the Board of Management who clearly violates the principles laid down in the Company’s Integrity Code or any other professional obligations, prior to the payout of the plan proceeds. The Supervisory Board has the final decision on all such bonus reductions.

Policies for share ownership

As a supplement to these three components of remuneration, “Stock Ownership Policies” exist for the Board of Management. These guidelines require the members of the Board of Management to purchase Daimler shares over several years and to hold those shares until the end of their Board of Management membership. The number of shares to be held is set between 20,000 and 75,000. In fulfillment of the policies, up to 25 % of the gross remuneration out of each Performance Phantom Share Plan is generally to be used to acquire ordinary shares in the Company, but the required shares can also be acquired in other ways.

Daimler AR2019 B.56 Overview of the determination of the annual bonus

Further refinement of the remuneration system with effect from January 1, 2020

Change to the annual bonus as a short-term and medium-term component of the remuneration

Effective in financial year 2019, the annual bonus was revised in view of the fundamental technological changes and the associated changes in the competitive environment in our industry, as well as changing customer behavior, the need for significant investments in new technologies, and the expectations of our shareholders. The main focus was on the implementation of the new corporate strategy and on safeguarding the Group’s future by expanding our business model as an automaker and a provider of mobility services.

At the beginning of 2020, the Act on the Implementation of the Second Shareholders’ Rights Directive (Gesetz zur Umsetzung der zweiten Aktionärsrechterichtlinie/ARUG II) went into effect. Subject to the implementation periods specified therein, it will extensively change the requirements regarding Board of Management remuneration. The new German Corporate Governance Code (DCGK), which is expected to come into effect in the first quarter of 2020, will also contain new recommendations regarding the remuneration of members of the Board of Management. The Supervisory Board took this opportunity to reassess the Board of Management remuneration system. In its meeting in December 2019, the Supervisory Board decided to further refine the Board of Management remuneration system as of January 1, 2020. This decision was made on the basis of the latest conditions, Daimler’s in-house corporate strategy, and the expectations of our shareholders. The changes only affect the organization of the annual bonus and are explained below.

Because the Supervisory Board and the Board of Management continue to consider it important to have a uniform incentive system, the Board of Management has also decided to make a corresponding adjustment to the annual bonus for all the other management levels.

Additional financial target

In times of comprehensive transformation, it is especially important to align the incentives in the remuneration system with a responsible prioritization of the allocation of capital. As a result, the free cash flow of the industrial business will be included as an additional financial target and have equal weight to the Daimler Group’s operating result (EBIT). In addition to EBIT, the free cash flow of the industrial business is one of the most important financial performance indicators for the Daimler Group’s operational financial performance.

The free cash flow of the industrial business, which comprises the cash flows at the automotive business divisions and the cash flows from taxes and other reconciliation items that cannot be allocated to the divisions, is of particular importance for the financial strength of the Daimler Group.

The target value of EBIT for each financial year continues to be derived on the basis of the desired medium-term return, which is set by the Supervisory Board and is ambitious and oriented toward the competitive environment, and derived from the growth targets. The starting point of the calculation is now the revenue of the previous financial year. The target value for the free cash flow of the industrial business in the respective financial year is based on the defined target EBIT of the segments of the automobile business (which, in turn, is derived from the strategic growth and return on sales targets) as well as on a strategic target for the cash conversion rate. The cash conversion rate is the proportion of the period’s result that is scheduled to flow into the Group’s liquidity after the payments for the necessary investments in research, development, tangible fixed assets, and working capital are taken into account as part of the strategic growth target.

As part of the comparison of target and actual values, the actually achieved value used in determining the free cash flow target achievement is adjusted for certain factors that were already taken into account in the target achievement of the annual bonus in 2019 or earlier.

The range of possible target achievement for the two financial targets (EBIT and free cash flow of the industrial business) is between 0 % and 200 %. The lower limit of this range is 25 % of the target value; the upper limit is 125 % of the target value. If the actually achieved value is at or under the lower limit of the range, the target achievement degree is always 0 %. The total absence of a bonus is therefore possible. If the actually achieved value is at or above the upper limit of the range, the target achievement degree is 200 %, which is the maximum it can reach. The degree of target achievement develops linearly within the range. (See graphic B.57)

Daimler AR2019 B.57 Financial Targets

The total amount to be paid out from the annual bonus is limited to 2 times the base salary of the respective financial year.

Non-financial targets

The non-financial targets are uniform at all management levels and continue to be divided into four equally weighted categories. Each category receives an addition or a deduction of up to 2.5 percentage points to or from the degree of achievement of the financial target.

After the end of the financial year, the degree of achievement of the non-financial targets is calculated by comparing the target values and the actual values. An addition to or deduction from the degree of target achievement of the financial targets of up to a total of 10 percentage points is possible. The relevant target tiers for financial year 2020 can be found in tables B.58, B.59, B.60 and B.61.

B.58 Integrity

Degree of target achievement Addition or deduction Integrity
indicator
+ Approval rate
of any question
Excellent 2.5 % > 80 % > 74 %
Good 2.0 % 71-80 % 65-74 %
Average 1.0 % 61-70 % 60-64 %
Low -2.5 % 60 % 59 %

B.59 Quality

Degree of target achievement Addition or deduction of all divisions
Excellent 2.5 % The addition or deduction is dependent on the respective target value, which is defined for each specific division and product.
Good 2.0 %
Average 1.0 %
Low -2.5 %

B.60 Employee engagement

Degree of target achievement Addition or deduction engagement + Participation rate
Excellent 2.5 % > 35 % > 70 %
Good 2.0 % 31-35 % 66-70 %
Average 1.0 % 25-30 % 61-65 %
Low -2.5 % 25 % 60 %

B.61 Diversity

Degree of target achievement Addition or deduction Gender Diversity
Aspirational Guidelines
Excellent 2.5 % Target overachieved 10 %
Good 2.0 % Target overachieved < 10 %
Average 1.0 % Target achieved
Low -2.5 % Target not achieved

Transformation targets

Effective as of financial year 2019, transformation targets replaced the previous shared performance value for the Board of Management as a whole, which was derived from the Board of Management members’ individual target agreements and degrees of target achievement. Especially during the transformation phase, these transformation targets refer to quantitative as well as qualitative aspects and are assessed and evaluated accordingly by the Supervisory Board. Sustainability/Environment Social Governance (ESG) aspects will play an even more explicit role for the transformation targets in the future, because sustainability is an integral part of our corporate strategy and thus an important factor in our business activities.

Against this backdrop, other performance continues to be taken into account in the transformation targets within the context of the implementation of our sustainability strategy (for example, growth of revenue from digital services, activation and connectivity rates of digital services, proportion of alternative drive systems, emission targets, development discipline, development progress of products and digital services, number of online contracts, proportion of digital self-services, revenue from mobility services). In order to further reduce the methodological complexity of the Board of Management remuneration system, the target tier of the transformation targets was aligned so that it can no longer result in a deduction from the degree of target achievement for the financial targets in the future.

Reduction of the maximum target achievement in the annual bonus (cap)

The maximum target achievement in the annual bonus (cap) will be reduced from 235 % to 200 % of the target bonus. In this way we are maintaining the current opportunity-risk profile of the annual bonus while at the same time taking the adjustment of the target tier of the transformation targets into account. The higher relative weighting of the non-financial targets and transformation targets in the total target achievement further underlines their significance.

No change in the other components of the remuneration system

The remainder of the remuneration system, in particular the composition of the remuneration of the Board of Management from the non-performance-related base salary, the annual bonus as a short-term and medium-term variable component with deferral and the long-term variable component PPSP, also remains unchanged, as does the relationship between the individual components of the remuneration. The current design of the PPSP, with the four-year duration of the plan, the measurement of the success targets compared to a defined and regularly monitored group of competitors that face the same strategic challenges, and the linkage with the absolute development of the share price, is already oriented toward the long-term success of the company.

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Board of Management remuneration in 2019
Events after 2019