talanx group annual report 2011 en

Nature of risks Notes on the balance
Notes on the balance
sheet – assets
sheet – liabilities
Notes on the
statement of income
Share-based remuneration
Other information
List of shareholdings
The following share-based remuneration schemes were operating within the Group in the 2011
financial year:
stock appreciation rights scheme (ABR) of Hannover Rückversicherung AG (operating since 2000)
share award scheme (share-based remuneration in the form of virtual shares, operating since
2011)
These schemes and their impact on the profit for the year and the Group’s net assets, financial position
and net income are described below.
Stock appreciation rights scheme of Hannover Rückversicherung AG
With the approval of the Supervisory Board, the Executive Board of Hannover Rückversicherung AG
introduced a virtual stock option scheme with effect from 1 January 2000 that grants stock appreciation
rights to certain managerial staff. The content of the stock option scheme is based solely
on the Conditions for the Granting of Stock Appreciation Rights. All members of the Hannover Re
Group’s senior management are eligible for the award of stock appreciation rights. Exercising the
stock appreciation rights does not entitle the holder to demand actual Hannover Re shares but only
to payment of a cash amount linked to the performance of Hannover Re’s shares. Recognition of
transactions involving stock appreciation rights with cash settlement is governed by the requirements
of IFRS 2 “Share-based Payment.”
For the year under review, a resolution passed by the Supervisory Board on 8 November 2010 revoked
the Conditions for the Granting of Stock Appreciation Rights in respect of any stock appreciation
rights that could have been granted to the Executive Board members on the basis of those
Conditions (partial termination). Stock appreciation rights that have already been assigned may be
exercised up at the time of their expiry. The Conditions continue in force with regard to all other
entitled managerial staff in the year under review.
Stock appreciation rights were first granted for the 2000 financial year and are awarded separately
for each subsequent financial year (allocation year), provided that the performance criteria defined
in the Conditions for the Granting of Stock Appreciation Rights are satisfied.
The internal performance criterion is achievement of the target performance defined by the Supervisory
Board, which is expressed in terms of the diluted earnings per share (EPS) calculated in accordance
with IAS 33 “Earnings per Share.” If the target EPS is surpassed or undershot, the provisional
basic number of stock appreciation rights initially granted is increased or reduced accordingly to
produce the EPS basic number. The external performance criterion is the development of the share
price in the allocation year. The benchmark used in this regard is the (weighted) RBS Global Reinsurance
Index. This index maps the performance of listed reinsurers worldwide. Depending upon the
extent to which this index is out- or underperformed, the EPS basic number is increased – subject
to a cap at 400% of the EPS basic number – or reduced – but by no more than 50% of the EPS basic
number.
Talanx Group. Annual Report 2011
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