❚ Remuneration of the Executive Board members
The Executive Board’s remuneration is decided by the Supervisory Board and regularly reviewed. Apart from fi xed remuneration and incidental benefi ts, Executive Board remuneration consists of a variable performance-based component. Based on assessments by the Supervisory Board, the total remunera- tion and the individual components of the compensation are appropriate for the tasks of the Executive Board member concerned, his personal performance, the economic situation, and the success and fu- ture prospects of REALTECH AG. It also takes into account comparable situations and the remunerati- on structure which applies elsewhere in society.
❚ Remuneration structure
The total remuneration of the Executive Board is performance-oriented. It is made up of two compo- nents: non-performance-related remuneration (fi xed salary) and performance-related remuneration (bo- nuses). The fi xed salary is paid out each month.
A bonus amounting to 3.5 percent of Group EBIT, adjusted for special effects, after minority holdings is granted, providing Group EBIT in the relevant fi scal year is at least EUR 2 million. The maximum variab- le remuneration is EUR 500,000. Bonuses are due after the General Meeting of the following fi scal year.
Furthermore, Executive Board members are required to use at least 10 percent of the variable remune- ration they are paid in each calendar year to purchase REALTECH shares and to hold these for at least three years from the date of purchase. This also applies to the time after they have left the company. It is therefore ensured that the variable remuneration also takes into account the sustained development of the company where the basis of measurement extends over a number of years.
The Supervisory Board is of the opinion that a more extensive arrangement on the long-term nature of the variable remuneration would not result in any further advantages, bearing in mind REALTECH AG’s business model. The majority of REALTECH AG’s revenues are still generated by the consultancy busi- ness. This requires all employees and the Executive Board to have the ability to respond very quickly
to continuously changing markets and customer situations. The main aspect of daily decision-making processes is purely the benefi t provided for customers, with a view to making maximum use of the con- sultants’ capacity, whilst also charging out consultants at the highest possible daily rates. Consequent- ly, this is hardly amenable to medium-term planning. If this is used as the basis for measurement with variable remuneration, it could even be counterproductive when it comes to operative decision-making processes. A remuneration structure that is primarily determined by the annual Group EBIT yet with re- latively low fi xed remuneration means that a substantial proportion of personnel costs become variable costs that depend on profi t. This is a remuneration structure which has been successfully applied at all levels of REALTECH AG over many years and, consequently, is also used at Executive Board level.
In view of the obligation to invest part of the variable remuneration in the company’s shares and to hold these for a minimum of three years, the Supervisory Board considers that this provides the mem- bers of the Executive Board with suffi cient incentive to achieve a good performance for the company in the long term. The obligation to purchase the company’s shares therefore supersedes the discontinu- ed convertible bond scheme. It is also considerably easier to operate and the associated administrative expenses are lower. The long-term incentive is reinforced through the increase in the number of shares held during the retention period.
The Executive Board and the Supervisory Board presented the remuneration system to the General Meeting on May 21, 2010 in accordance with Section 120, paragraph 4 of the German Stock Corporati- on Act (AktG). The General Meeting approved the company remuneration system with a large majority of around 99.98 percent of the votes cast.
❚ Leaving the Executive Board
The contracts of the Executive Board members do not provide for any promised severance payments in the event of a “Change of Control” or premature termination of work for the Executive Board without good reason.
❚ Remuneration in fi scal year 2012
Remuneration received by the Executive Board in fi scal year 2012 totaled EUR 382 thousand (compa- red to EUR 760 thousand in the previous year). The fi xed portion (including non-monetary benefi ts from company cars and social security allowances) was EUR 382 thousand (previous year: EUR 535 thousand), while variable remuneration totaled EUR 0 thousand (previous year: EUR 204 thousand). Share-based remuneration was EUR 0 thousand (previous year: EUR 21 thousand). As in the previous year, no options were granted in fi scal year 2012.
The Executive Board members and managers were last allocated convertible bonds in fi scal year 2006 under the remuneration system valid at the time, in accordance with the resolution passed by the REAL- TECH General Meeting on May 16, 2002 concerning the granting of convertible bonds, which the holder is entitled to exchange for company shares (100 shares per convertible bond). The Convertible Bond Pro- gram expired on July 31, 2011 with the consequence that the convertible bonds held also expired.
The breakdown of the remuneration for the Executive Board members is shown in the following table (in EUR thousand):
Group Management Report
Up to and including March 15, 2013, Nicola Glowinski, who left the Executive Board on July 31, 2011, will receive a monthly severance payment of EUR 22 thousand each month for the remaining term of his contract in line with his contractual remuneration, against which Nicola Glowinski must offset other in- come received from employment, in full, up to March 23, 2013. If, through a written statement, Nico- la Glowinski exercises his right to withdraw from the obligation to offset and to submit appropriate evi- dence regarding the level of his remuneration, he will then receive only 50 percent of the severance payment installments that were originally to be paid until March 2013 as a one-off payment. In fi scal ye- ar 2012, severance payments paid to Nicola Glowinski amounted to EUR 269 thousand.
❚ Remuneration of the Supervisory Board members
According to Section 11 of the company‘s Articles of Association, since the 2012 fi scal year each Super- visory Board member receives fi xed annual remuneration of EUR 15 thousand. The Chairman of the Su- pervisory Board receives annual remuneration of EUR 25 thousand. The fi nancial expert in the sense of Section 100, Paragraph 5 of the German Stock Corporation Act (AktG) receives an additional EUR 5 thousand per year. In addition to this, the members of the Supervisory Board receive a fee of EUR 1,500 each time they attend a Supervisory Board meeting. In addition, each Supervisory Board member recei- ves reimbursement for any proven expenses and any value added tax.
No performance-related remuneration is paid (previous year: EUR 0 thousand).
Remuneration received by the Supervisory Board in fi scal year 2012 totaled EUR 78 thousand (previous year: EUR 72 thousand). The fi xed component was EUR 60 thousand (previous year: EUR 45 thousand), while the component for attendance fees and travel expenses amounted to EUR 18 thousand (previous year: EUR 27 thousand).
These remuneration rules applied for the fi rst time in fi scal year 2012.
IX. RESPONSIBILITY STATEMENT BY THE EXECUTIVE BOARD
To the best of our knowledge, and in accordance with the applicable reporting principles, the consolida- ted fi nancial statements give a true and fair view of the net assets, fi nancial position and earnings of the Group, taking account of the applicable accounting standards, and the Group management report inclu- des a fair review of the development and performance of the business and the position of the Group, to- gether with a description of the principal opportunities and risks associated with the expected develop- ment of the Group. beschrieben sind.
Walldorf, March 4, 2013 REALTECH AG The Executive Board
Name Dr. Rudolf Caspary Thomas Mayerbacher Nicola Glowinski (until 31.07.2011) Variable component 0 0 0 0 31.12.2012 31.12.2011 Variable component 102 0 102 204 Share-based component 16 5 0 21 Share-based component 0 0 0 0 Fixed component 215 167 0 382 Fixed component 205 166 164 382