53. Management Board and Supervisory Board
Remuneration of members of the Management Board in financial year 2019/20
The remuneration of the active members of the Management Board essentially consists of a fixed salary, a short-term variable remuneration component (short-term incentive and special bonuses), as well as the long-term variable remuneration (long-term incentive) granted in financial year 2019/20.
The short-term incentive for members of the Management Board is essentially determined by the development of financial performance targets related to that financial year and also considers the attainment of agreed-upon targets.
The remuneration of the active members of the Management Board in financial year 2019/20 amounted to €11.5 million (2018/19: €9.8 million). This includes €3.8 million (2018/19: €3.5 million) in fixed salaries, €2.1 million (2018/19: €2.0 million) in short-term performance-based remuneration, €5.1 million (2018/19: €3.9 million) in share-based long-term variable remuneration and €0.5 million (2018/19: €0.3 million) in non-monetary and supplemental benefits.
The share-based long-term variable remuneration (performance share plan) granted in financial year 2019/20 is recognised at fair value, taking into account the revised performance targets. The Supervisory Board resolved on 24 September 2020 to adjust the LTI tranche 2019/20 to the current medium-term planning with regard to the target of the EPS component in order to mitigate the effects on the remuneration of the Management Board and to maintain the incentive effect. Furthermore, the TSR component was adjusted with regard to the composition and valuation of the comparison group of competitors. The comparison group of competitors was reduced by the company Bizim Toptan and the median is used instead of the arithmetic mean to determine the TSR value for the comparison group.
The number of conditionally allocated performance shares for the members of the Management Board amounts to a total of 514,821.
In financial year 2019/20, value adjustments resulted from the current share-based tranches of the long-term variable remuneration. The company’s expenses amounted to €0.464 million for Mr Koch, €0.126 million for Ms Euenheim and €0.145 million for Mr Gasset and Mr Poirier each. Provisions of €0.376 million for Mr Baier, €1.171 million for Mr Hutmacher and €0.087 million for Mr Palazzi were reversed in financial year 2019/20.
As of 30 September 2020, the provisions for the members of the Management Board totalled €2.71 million. Of this amount, €1.63 million was attributable to Mr Koch, €0.32 million to Mr Baier, €0.13 million to Ms Euenheim, €0.15 million to Mr Gasset and Mr Poirier each, and €0.34 million to Mr Hutmacher.
Expenses and provisions were determined by external experts using a recognised financial mathematical procedure.
An agreement was reached with Mr Hutmacher in financial year 2018/19 for the premature termination of his employment contract with effect from the end of 31 December 2019. A severance payment of €2,957,700 was agreed to settle the remaining term of his employment contract (1 January 2020 to 30 September 2020) and the short-term incentive for the period from 1 October 2019 to 31 December 2019. This settlement covers Mr Hutmacher’s claims, taking into account the contractually agreed severance payment cap in accordance with the German Corporate Governance Code. The severance payment, which was due in financial year 2019/20, was fully accrued in financial year 2018/19. The tranches of the long-term incentive already granted to Mr Hutmacher will be settled in accordance with the terms of the plan.
In financial year 2019/20, an agreement was reached with Mr Palazzi regarding the early termination of his employment contract with effect from the end of 31 May 2020. The short-term incentive for the period from 1 October 2019 to 31 May 2020 was paid out in May 2020. No severance payment was agreed with Mr Palazzi and the tranches of the long-term incentive granted to him were cancelled without compensation.
In financial year 2019/20, an agreement was also reached on the early termination of the employment contract with Mr Koch with effect from the end of 31 December 2020. In accordance with his contract, the short-term incentive until 31 December 2020 will be paid to Mr Koch. The tranches of the long-term incentive already granted to Mr Koch remain in place and will be settled in accordance with the terms of the plan. No severance payment will be paid to Mr Koch.
Total compensation of former members of the Management Board
There are congruent, reinsured liabilities from pension provisions covered by life insurance contracts of €6.4 million towards former members of the Management Board.
Compensation of members of the Supervisory Board
The total remuneration of all members of the Supervisory Board in financial year 2019/20 amounted to €2.2 million (2018/19: €2.2 million).