Financial Statements and Management Report - Thyssenkrupp
Financial Statements and Management Report - Thyssenkrupp
Financial Statements and Management Report - Thyssenkrupp
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1.7 <strong>Management</strong> report Legal informations<br />
The discount share purchase <strong>and</strong> MTI programs described will be replaced by the LTI in the future. The LTI<br />
employs a system comparable with the MTI. Under the LTI, too, stock rights are issued <strong>and</strong> their<br />
performance measured over a three-year period on the basis of TKVA; on expiration of the plan participants<br />
receive a cash payout equivalent to the value of the stock rights. The plan differs from the MTI in that the key<br />
data have been changed <strong>and</strong> the group of participants significantly exp<strong>and</strong>ed. In fiscal year 2010/2011 the<br />
LTI was awarded to only a few selected executives, the program has not yet been fully implemented. The<br />
resultant expenses amounted to €6.0 million.<br />
In addition it was decided to modify the structure of the variable compensation component for further<br />
selected executives in such a way that 20% of the bonus awarded for each fiscal year must now be<br />
converted into ThyssenKrupp AG stock rights <strong>and</strong> is only paid out in cash after the expiration of three fiscal<br />
years on the basis of the average ThyssenKrupp share price in the 4th quarter of the 3rd fiscal year. This will<br />
be implemented for the first time for the 2010/2011 fiscal year.<br />
Appropriate Supervisory Board compensation<br />
The compensation of the Supervisory Board, which is based on the duties <strong>and</strong> responsibility of the<br />
Supervisory Board members <strong>and</strong> on the business situation <strong>and</strong> performance of the Group, is regulated in<br />
§14 of the Articles of Association of ThyssenKrupp AG.<br />
In addition to reimbursement of their expenses <strong>and</strong> a meeting attendance fee of €500, Supervisory Board<br />
members receive compensation comprising three elements: fixed compensation of €50,000 <strong>and</strong> two<br />
performance-related elements. The first is a performance bonus of €300 for each €0.01 by which the<br />
dividend paid out to shareholders for the past fiscal year exceeds €0.10 per share. On top of this there is a<br />
component based on the long-term performance of the Company in the form of an annual compensation of<br />
€2,000 for each €100 million by which average earnings before taxes (EBT) in the last three fiscal years<br />
exceed €1 billion.<br />
The Chairman receives three times the above fixed compensation, performance bonus <strong>and</strong> long-term<br />
performance-based component, <strong>and</strong> the Vice Chairman double these amounts. In accordance with the<br />
German Corporate Governance Code, chairmanship <strong>and</strong> membership of the Supervisory Board committees<br />
are compensated separately. Supervisory Board members who only serve on the Supervisory Board for part<br />
of the fiscal year receive a proportionally reduced compensation amount. If a Supervisory Board member<br />
does not attend a meeting of the full Supervisory Board or a committee meeting, his/her compensation is<br />
reduced proportionally.<br />
On the basis of the proposed dividend, members of the Supervisory Board will receive total compensation,<br />
including meeting attendance fees, for the reporting year of €1.8 million (prior year: €1.8 million). The<br />
individual members will receive the amounts listed in the following table. As the average EBT of the last<br />
three fiscal years is below the threshold of €1 billion – as in the previous year – no payment will be made<br />
from the long-term compensation component for fiscal year 2010/2011.<br />
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