The remuneration paid to the members of the Executive Board is composed of both per- formance-related and non-performance-related components.
The non-performance-related basic remuneration is a fi xed amount paid as a monthly salary. Executive Board members also receive pension subsidies, and non-monetary compensation, consisting mainly of the fi scal value of company car use, reimbursement of the costs of running two households, and accident insurance contributions. As a rule, pension subsidies are granted up to a maximum of half of the substantiated maximum amount of statutory pension insurance. In the case of Mr Niels Graugaard, this amount is equivalent to 12.5 per- cent of his fi xed salary, in line with his contractual arrangements. Mr Graugaard has not received a pension commitment from the company.
The performance-related remuneration (bonus) is generally determined by the achievement of profi t-related and personal targets specifi ed in individual agreements. The performance targets basically depend on earnings before tax in combination with the EBIT margin (EBIT = earnings before interest and tax), and on the performance of the company’s share relative to the MDAX stock index.
Executive Board members may be granted an additional discretionary bonus if their indi- vidual performance adds exceptional value for the company’s shareholders. The company’s Supervisory Board decides whether such a discretionary bonus should be granted and, if so, its level. No additional discretionary bonuses were awarded for the 2008 fi scal year. The Chairman of the Executive Board, Mr Jürg Oleas, enjoys a contractual pension com- mitment with an individually agreed fi xed amount. This pension is paid if his Executive Board contract ends on or after his 62nd birthday, or if he becomes unable to work. Mr Oleas receives his pension if his employment contract has run for at least 15 years and ends before the above preconditions are met. In this case, or if he becomes permanently unable to work, his pension is paid as a transitional measure until he reaches his 62nd birthday; this amount is reduced by the full amount of any severance payment and – up to his 62nd birthday – any other income from activities commenced after he left the company, but by
If Mr Oleas’ contract as an Executive Board member ends before one of the above-mentioned preconditions is met, he is entitled to a pro-rata annual pension that is calculated based on a maximum possible service period of 180 months. A pension that is being paid is adjusted every year in line with the consumer price index.
All members of the Executive Board are entitled to make their own contributions to a pension scheme in the form of deferred compensation. There is no employer subsidy. The company has set aside pension reserves to cover the future entitlements of Executive Board members. The amounts allocated to these pension reserves in accordance with IFRS for current members of the Executive Board who are active at the end of the reporting year are listed individually in the table below. The relevant amounts consist of the service cost and the interest cost.
The Chairman of the Executive Board is entitled to give unilateral notice in the instance that the Supervisory Board wishes to revoke his appointment as Chairman of the Executive Board. If he chooses to exercise this option to give unilateral notice and to step down from the Executive Board, he is entitled to continue to receive his fi xed salary for the remaining months of his contractual period of offi ce, to a maximum of eight months, however. With respect to a change of control, the following rule applies for all members of the Executive Board: if Executive Board members are removed as Executive Board members of the company, or their contracts as Executive Board members are terminated by mutual consent within six months of the change of control: the bonuses paid for the respective fi scal year – where legally permissible, especially pursuant to § 87 Section 1 of the German Stock Corporation Act (AktG) – will amount to at least K EUR 850 gross for Mr Oleas, at least K EUR 510 gross for Mr Eberlein, and to at least K EUR 467.5 gross for Mr Graugaard. A change of control within this meaning is deemed to have occurred as soon as the com- pany is notifi ed that an investor holds 50 percent or 75 percent or more of the company’s voting capital as per § 21 of the German Securities Trading Act (WpHG), or an affi liation agreement is concluded with the company as a controlled enterprise as per §§ 291 et seq. of the German Stock Corporation Act (AktG), or either a subordination of a dependent entity as per § 319 of the German Stock Corporation Act (AktG), or a change in the com- pany’s legal form as per the Conversion Act, becomes legally eff ective.
The total remuneration paid to the current Executive Board members of GEA Group Aktiengesellschaft amounted to K EUR 5,635 in the reporting year (previous year: K EUR 7,535) and, in addition to a fi xed payment of K EUR 2,460 (previous year: K EUR 2,828), contained a variable bonus of K EUR 3,175 (previous year: K EUR 4,707).
The tables below provide details of the base salary, bonus, other forms of remuneration, and the pension entitlements for each member of the Executive Board.
The table below shows the remuneration paid to each member of the Executive Board in 2008, and the previous year’s comparison: