An important element of the remuneration system is the variable component, which is closely linked to corporate performance. The ratio between the fixed and performance-linked components (without severance payments) of the Executive Board's total compensation in the period under review was 38% to 62%.
The emoluments paid to the members of the Executive Board are detailed in the Notes of the Annual Report 2011.
The performance bonus of the Executive Board is determined as a percentage of the Group profit (EBT) as shown in the consolidated income statement before deduction of income tax and non-controlling interests. An incremental reduction is made in this percentage in line with increases in the consolidated profit. The severance-pay arrangements are based upon the regulatory stipulations. Following any cessation of the employer/employee relationship, the company will not be burdened by any subsequent contributions to the company pension scheme, or any vested right to future pension payments, on behalf of the Executive Board Member concerned.
The new contract concluded with Dieter Siegel as CEO is linked to sustainable long-term performance criteria, as stipulated by Rule 27, and includes a two-year assessment period for determining the variable remuneration component. Only financially quantifiable criteria are taken into account for this purpose; non-financial criteria have been disregarded, as these cannot be measured objectively. Since the percentage used as the basis for calculating the variable remuneration component decreases incrementally in line with any increase in the consolidated profit, there is no need for a ceiling defined as a maximum amount or as a percentage of the fixed remuneration components.
In view of the long-termist, sustainability-oriented nature of appointments to the Executive Board, it has been deemed unnecessary to make contractual provision for reclaiming variable remuneration components. The circumstances accompanying the departure of an Executive Board Member, and the economic situation of the company, will be taken into consideration at the time of such premature termination of Executive Board Membership, as appropriate. It has been decided to dispense with any explicit such provision in the Executive Board employment contract. In the event of premature termination without a material breach, the severance payment will not exceed two years' total remuneration.
No stock option program is in place, either for Members of the Executive Board or for senior managers. A D&O (Directors & Officers) insurance policy is in force for the Group, the costs of which are borne by Rosenbauer International AG.