Remuneration of the Management Board

Strategy and remuneration of the Management Board

METRO’s strategy is exclusively focused on wholesale. This includes increasing customer value by consistently streamlining the product offering and price positioning to meet the needs of professional customers as well as by expanding the multichannel customer experience. In this context and in order to expand the delivery business, the strategy includes optimising the existing store network accordingly. Overall, these strategic value drivers are aimed at increasing the company value long-term.

The remuneration system is designed to ensure that the members of the Management Board contribute actively to the sustainable and long-term development of METRO, and to allow them to share in the benefits of the implementation of the strategic goals. This principle is reflected in the internal management system. Key performance indicators are used for the planning, management and control of business activities. They describe the earnings position as well as the financial and asset position. Selected key figures of the control system form the basis for the Management Board’s variable remuneration component.

The short-term incentive (STI) rewards the operational development of the company based on the business success in the respective financial year.

The long-term incentive (LTI) is based on the sustainable development of the company and sets incentives for a sustainable, long-term increase in the value of the company. It also considers the internal and external performance over a period of several years.

Procedures for determining, implementing and reviewing Management Board remuneration

Pursuant to § 87 Section 1 of the German Stock Corporation Act (AktG), the Supervisory Board determines the remuneration of the Management Board. It is assisted by its Presidential Committee, which prepares the corresponding resolutions of the Supervisory Board.

The Supervisory Board determines a total target remuneration based on a target achievement of 100% for the upcoming financial year and a maximum remuneration for each member of the Management Board. For determination and periodic review of the fixed and variable remuneration, the Presidential Committee and the Supervisory Board take into account that the remuneration is commensurate with the tasks and performance of the member of the Management Board as well as the situation of the company. Furthermore, they ensure that the remuneration does not exceed a customary remuneration in the market without special reasons. In order to assess the customary level of remuneration of all members of the Management Board, the Supervisory Board regularly conducts a horizontal (external) and vertical (internal) comparison.

The Supervisory Board ensures that the targets for variable remuneration are based on ambitious financial and strategic success parameters, whose achievement level determines the amount of the actual payout. When the Supervisory Board selected the success parameters for the variable remuneration components, it made sure that they are clearly measurable and relevant to the strategy. For the past financial year, the Supervisory Board sets the amount of the variable remuneration components and thus the actual total remuneration.

The Presidential Committee periodically reviews the remuneration system for the members of the Management Board. The Supervisory Board decides on changes as needed. If necessary, the Presidential Committee and the Supervisory Board consult an external remuneration expert whose independence from the Management Board and the company is ensured.

In the event of significant changes to the remuneration system, but at least every 4 years, the Annual General Meeting decides on approval of the remuneration system presented by the Supervisory Board. If the Annual General Meeting does not approve the presented remuneration system, a revised remuneration system must be presented no later than at the next general meeting.

If it is necessary in the best interest of the company and its long-term welfare, the Supervisory Board may, upon recommendation of the Presidential Committee, decide to temporarily deviate from the existing remuneration system. This may especially affect the configuration and the fixed amount of the variable components. This gives the Supervisory Board the opportunity to consider extraordinary developments within reasonable limits. The Supervisory Board did not make use of this option in financial year 2021/22.

Overview of the Management Board remuneration

The remuneration of the members of the Management Board of METRO AG consists of non-performance-based (fixed) and performance-based (variable) remuneration components.

The fixed remuneration components include the fixed salary, post-employment benefits and supplemental benefits. They correspond to 36% to 47% of the total target remuneration of a member of the Management Board. The variable remuneration consists of a short-term incentive (STI) and a long-term incentive (LTI). The variable remuneration corresponds to 53% to 64% of the total target remuneration of a member of the Management Board. The variable remuneration consists of STI and LTI at a ratio of approximately 40:60.

Breakdown
Total target remuneration

Ratio of STI to LTI

In accordance with the requirements of the German Stock Corporation Act and the recommendation of the German Corporate Governance Code (GCGC), the remuneration structure is geared towards the sustainable, long-term development of the company. The share of the LTI exceeds the share of the STI.

Staffing of the Management Board and total target remuneration in financial year 2021/22

In financial year 2021/22, the following persons represented the Management Board for the entire year: Dr Steffen Greubel (Chief Executive Officer), Christian Baier (Chief Financial Officer) and Rafael Gasset (Chief Operating Officer). The appointments and employment contracts of Eric Poirier (Chief Operating Officer) and Andrea Euenheim (Chief Human Resources Officer and Labour Director) were terminated on 31 December 2021 and 31 March 2022 respectively. Claude Sarrailh (Chief Customer & Merchandise Officer) was newly appointed to the Management Board with effect on 1 January 2022 and Christiane Giesen (Chief Human Resources Officer and Labour Director) joined the Management Board on 15 September 2022. The Labour Director position was temporarily filled by Dr Steffen Greubel.

In determining the individual remuneration and the target amounts for the individual remuneration components of the members of the Management Board, the Supervisory Board took the function and the task of the respective member of the Management Board into account. On an annual basis, the total target remuneration for financial year 2021/22 is as follows:

In addition to the fixed and variable remuneration components, the remuneration system includes further regulations such as a holdback (malus) and clawback regulation, share ownership guidelines as well as regulations on whether (and if yes, which) payments are made in the event of premature termination of Management Board appointments. The remuneration components and other regulations are explained in detail below.

Fixed salary

The annual fixed salary is contractually agreed with the respective member of the Management Board and is paid in monthly instalments. It ensures an adequate income for the members of the Management Board.

Post-employment benefits plans

The members of the Management Board receive benefits from the company for a retirement pension. This amount is determined by the defined assessment amount: 14% of the fixed salary amount and the STI target amount.

Direct commitment to the executive pension plan

The company pension plan is offered in the form of a direct commitment with a defined contribution component and a defined benefit component. The defined contribution component is financed jointly by the Management Board and the company. This is based on an apportionment of ‘7 + 14’. When a member of the Management Board makes a contribution of 7% of the defined assessment amount, the company will contribute twice the amount.

The defined benefit component ensures a minimum payout in the event of disability or death. In such instances, the total amount of contributions that would have been credited to the member of the Management Board for every calendar year up to a contribution period of 10 years, but limited to the point when the individual turns 60, will be added to the benefits balance. This component of post-employment benefits plans is not covered by life insurance policies and will be provided directly by the company when the benefit becomes due.

When a member of the Management Board leaves the company before benefits become due, the contributions retain the level they have reached. This component of post-employment benefits plans is insured on the basis of matching life insurance policies by Hamburger Pensionsrückdeckungskasse VVaG (HPR). The interest rate for the contributions is paid in accordance with the Articles of Association of the HPR with regard to profit participation, with a guarantee applying to the paid-in contribution.

Entitlement to pension plans exists

• if the employment ends with or after reaching the statutory retirement age in the German statutory pension insurance,
• as premature post-employment benefit if the employment ends after the age of 60 or after the age of 62 for pension commitments granted after 31 December 2011 and before reaching the regular retirement age,
• in the event of disability or death, provided that the relevant conditions of eligibility are met. Payment can be made in the form of a one-time capital payment, instalments or a life-long pension.

Alternative implementation

As an alternative to the executive pension plan, members of the Management Board may choose to build up post-employment benefits by paying the defined amount on a monthly or annual basis. In this case, the pension can only be financed by the company’s contribution without making a personal contribution.

Deferred compensation

Furthermore, members of the Management Board have been offered the option of converting future remuneration components in the fixed salary as well as in the variable remuneration into post-employment benefits plans with HPR as part of a tax-privileged remuneration conversion scheme.

Post-employment benefits for members of the Management Board in financial year 2021/22

The pension expenditure according to IFRS (service cost) for Dr Steffen Greubel amounts to €12,126; no service costs were incurred for the other current and former members of the Management Board.

Due to the form of the commitment, the company’s contributions to the defined contribution component of the executive pension plan are disclosed in the table of granted and owed remuneration for financial year 2021/22 in the column ‘supplemental benefits/post-employment benefits’.

Rafael Gasset, Claude Sarrailh and Eric Poirier have (or had previously) opted for an alternative implementation method to build up a retirement pension at their own discretion. In all 3 cases, it was ensured that the company’s contributions do not exceed the defined contribution over the office term of the member of the Management Board. These company contributions are also disclosed in the table of granted and owed remuneration for financial year 2021/22 in the column ‘supplemental benefits/post-employment benefits’.

Short-term incentive (STI)

The STI incentivises the operational performance based on the success in the respective financial year.

The success is based on 2 parameters: the financial and strategic performance targets. The financial success parameters are aimed at profitable growth. The strategic performance parameters are based on a highly focused list of objectives consisting of group targets and individual departmental targets of the respective member of the Management Board. They also specifically include the company’s ESG targets (environmental, social and governance).

Short-term incentive

For financial year 2021/22, the overall target achievement factor is 2.0, which is explained below.

Financial performance parameters

The STI for financial year 2021/22 is based on the following financial performance parameters of the group:

• exchange rate-adjusted total sales growth, at 40%,
• exchange rate-adjusted earnings before deduction of interest expenses, taxes, depreciation/amortisation (EBITDA), adjusted for real estate transactions and transformation costs, at 40%,
• exchange rate-adjusted Return on Capital Employed (RoCE), excluding real estate transactions and transformation costs, at 20%,

in each case based on the target amount.

Instead of one of the financial performance parameters applicable for financial year 2021/22, the Supervisory Board may also apply any of the other financial performance indicators listed in the combined management report and the group management report for subsequent financial years; for example, this may be the case if it is convinced that the alternative parameter is more suitable as a performance indicator for the long-term development of the company. In financial year 2021/22, the Supervisory Board did not make use of this provision.

For each of the 3 financial performance parameters, the Supervisory Board set target values before the start of financial year 2021/22. The targets are based on the budget plan approved by the Supervisory Board. A factor was allocated to the specific degree of target achievement.

• If the degree of target achievement is 100%, the factor is 1.0.
• If the degree of target achievement is lower or equal to the floor/entry hurdle, then the factor is 0.0.
• In the case of intermediate values and values over 100%, the factor for target achievement is calculated using linear interpolation and/or extrapolation.

STI performance parameter: total sales growth

Target achievement in financial year 2021/22: 470% = Factor 4.7

STI performance parameter: EBITDA

Target achievement in financial year 2021/22: 410% = Factor 4.1

STI performance parameter: RoCE

Target achievement in financial year 2021/22: 320% = Factor 3.2

To determine whether the EBITDA target has been achieved, the Supervisory Board is authorised to adjust the EBITDA for any possible impairment losses on company value. No adjustments were made in financial year 2021/22.

The overall target achievement of the financial performance parameters is calculated from the determined target achievement factors for each of the financial performance targets. The weighted arithmetic mean of the individual factors is the overall target achievement factor, which is limited to a factor of 2.0.

Strategic performance parameters

Generally before the beginning of each financial year, the Supervisory Board determines department-specific and joint priority topics for each member of the Management Board. The topics are related to the current development of the company and aligned with the strategic orientation. To ensure that they can be properly assessed, the Supervisory Board established clearly defined, fundamentally measurable criteria and determined the target achievement level for them. For example, these priority topics include implementation of ongoing large-scale projects at Management Board level as well as customer satisfaction, employee satisfaction, succession planning, diversity and sustainability (environment/social/governance [ESG] goals). The factor determined from the target achievement of the strategic performance parameters can be between 0.8 and 1.2 and accordingly reduces or increases the determined payout amount based on the financial performance parameters.

The department-specific and the collective key topics are weighted equally.

Due to the short time remaining in financial year 2021/22, no strategic performance targets were agreed with Christiane Giesen, who took up her position as a member of the Management Board on 15 September 2022. Accordingly, the factor was set at 1.0 by resolution of the Supervisory Board. For Andrea Euenheim and Eric Poirier, who left the Management Board in financial year 2021/22, the factor for the strategic performance targets was already set at 1.0 as part of the cancellation of the employment contracts.

Determination of the payout amount

The payout amount of the STI for the members of the Management Board is calculated by multiplying the target amount by the factor of the overall target achievement of the financial performance parameters and the respectively determined factor for the strategic performance parameters. The payout amount of the STI is limited to a maximum of 200% of the individually determined target value (payout cap).

An additional condition for the payout of the STI is that it generates positive free cash flow. Thus, payout of the STI never occurs if the free cash flow for the financial year in question is negative, unless the negative free cash flow is based on a plan approved by the Supervisory Board. This condition was met because a positive free cash flow was generated in financial year 2021/22.

The calculation of the payout amount for the members of the Management Board for the STI in financial year 2021/22 is shown in the table below:

The STI of the members of the Management Board is generally payable 4 months after the end of the financial year, but not before approval of the annual and consolidated financial statements by the Supervisory Board for the financial year for which the incentive was agreed.

When a member of the Management Board joins or leaves the Board in the course of a financial year, the STI for this financial year is determined pro rata temporis and paid out as outlined in the system.

Long-term variable remuneration (long-term incentive, LTI)

The LTI reinforces the sustainable development of the company and sets incentives for a sustainable, long-term increase in the value of the company. It also considers the internal and external value development over a period of several years as well as the interests of the shareholders.

The tranches of the LTI granted from financial year 2018/19 onwards, whose performance period either has not yet ended or ended in financial year 2021/22, consist of the performance share plan (2018/19 and 2019/20 tranches) and the performance cash plan (from 2020/21 tranche onwards).

Overview of LTI tranches

Dr Steffen Greubel, Christian Baier, Rafael Gasset, Claude Sarrailh and Andrea Euenheim were granted a new tranche of the performance cash plan in financial year 2021/22.

Current and former members of the Management Board also have access to the following tranches of the LTI granted during their Management Board activities, whose term has not yet ended: Christian Baier, Rafael Gasset, Andrea Euenheim (member of the Management Board until 31 March 2022) and Eric Poirier (member of the Management Board until 31 December 2021) via the 2019/20 tranche and the 2020/21 tranche; Olaf Koch (Chairman of the Management Board until 31 December 2020) via the 2019/20 tranche.

Granted LTI in financial year 2021/22

Since financial year 2020/21, the long-term incentive has been structured as a performance cash plan. The second tranche of the performance cash plan was granted in financial year 2021/22:

The tranches to be granted annually have a term of 4 years, which begins on 1 October of the financial year for which the tranche is granted (grant year). The cut-off date for granting of the tranches is the 21st stock exchange trading day after the Annual General Meeting in the grant year.

The performance cash plan is based on the achievement of 2 performance targets:

• the relative development of the total shareholder return (TSR) of the METRO ordinary share, each weighted in half in comparison to the MDAX and a peer group, at 60%,
• the basic earnings per share (EPS) against a defined absolute target value, at 40%.

Long-term incentive (performance cash plan)

TSR component: the target achievement factors of the TSR component are measured by the development of the total shareholder return of the METRO ordinary share in the TSR performance period relative to a defined benchmark index and to a defined peer group – half against the development of the MDAX TSR and half against the development of the TSR of a defined peer group over the same period as the METRO TSR. The TSR value of the peer group is determined individually for the members of the peer group and then the median is determined. The peer group is composed of the following companies: Bidcorp (ISIN ZAE000216537), Marr (ISIN IT0003428445), Eurocash Group (ISIN PLEURCH00011), Performance Food Group (ISIN US71377A1034), US Foods (ISIN US9120081099), Sysco (ISIN US8718291078) und Sligro (ISIN NL0000817179). Only companies that are listed for the entire performance period are included in this group. If TSR values are available for fewer than 6 companies in this peer group, then the complete METRO TSR will be compared with the MDAX TSR.

For the TSR component, the Supervisory Board usually establishes a floor/entry hurdle and a TSR target value for the 100% target achievement at the beginning of the financial year in which the tranche of the performance cash plan is granted.

To determine target achievement, the Xetra closing prices of the METRO ordinary share are determined over a period of 20 consecutive stock exchange trading days immediately after the company’s Annual General Meeting in the year in which the tranche is granted. The arithmetic mean calculated from this figure is called the starting share price. The performance period for this component begins on the 21st trading day after the Annual General Meeting. 3 years after the starting share price has been determined and the tranche has been issued, the Xetra closing prices of the METRO ordinary share are again determined over a period of 20 consecutive stock exchange trading days immediately after the Annual General Meeting. This is used again to establish the arithmetic mean, the so-called closing share price. The TSR is determined as a percentage on the basis of the change in the METRO ordinary share price and the total amount of hypothetically reinvested dividends throughout the performance period in relation to the starting share price.

The resulting METRO TSR is compared to the TSR of the 2 peer groups in the performance period determined in the same way. A factor is allocated to the specific degree of target achievement.

Determination of target achievement for TSR performance

EPS component: for the EPS component, the Supervisory Board generally decides before the beginning of the financial year in which the tranche of the performance cash plan is granted on a floor/entry hurdle for target achievement and an EPS target value for 100% target performance for the 3^rd financial year of the EPS performance period. A factor is allocated to the specific degree of target achievement.

The EPS target values for the tranche of the performance cash plan granted in financial year 2021/22 had been set by the Supervisory Board in September 2021 based on the medium-term planning available at that time. In January 2022, the Management Board, with the approval of the Supervisory Board, presented METRO’s new strategy, under which annual investments are to be increased. This leads to a correspondingly reduced expectation for earnings per share in the affected planning years. With that in mind, the EPS target was adjusted in May 2022.

Determination of EPS performance target achievement

Determination of the payout amount: the amount to be paid out at the end of the tranche term is determined from the target achievement factors of the TSR and EPS components based on the target amount attributable to the performance target in each case. The target achievement factor for each individual component is limited to a maximum of 3.0. The payout amount is limited to a maximum of 250% of the individually determined target amount (payout cap).

The tranches of the performance cash plan are paid out in the month following the end of the term, but not before all annual and consolidated financial statements of METRO AG for the financial years of the EPS performance period have been determined and/or approved by the Supervisory Board. The term of the tranche granted in financial year 2021/22 ends on 30 September 2025.

Leaving the Management Board

If a member of the Management Board leaves the Management Board as scheduled after the end of his or her office term, entitlements acquired during the term of the employment contract do not become due for payment prematurely. In accordance with the terms and conditions of the LTI, they become due at the regular end of the tranches in the same manner as for the current members of the Management Board.

No payments will be made from the LTI upon departure from the Management Board in the following cases:

• release of a member of the Management Board for good cause,
• immediate dismissal of a member of the Management Board for good cause,
• termination of the employment contract by the company for good cause, and
• premature termination of the employment contract or cancellation of the Management Board appointment or release by the company at the request of the respective member of the Management Board. If the Supervisory Board has indications of justified exceptions, such as cases of hardship, it may deviate from this regulation at its reasonable discretion.

If the appointment of a member of the Management Board is terminated by mutual consent and/or the employment contract of a member of the Management Board is terminated prematurely by mutual consent, and if the request of the respective member of the Management Board is not decisive for this decision, claims acquired during the term of the employment contract do not become due for payment prematurely. Rather, they become due for payment in accordance with the conditions at the regular end of the tranches in the same manner as for the current members of the Management Board. In the event of premature termination of the employment contract, tranches not yet granted are generally paid out in the form of a single payment.

Termination of LTI performance period in financial year 2021/22

The tranche of the LTI granted in financial year 2018/19, whose performance period ended in financial year 2021/22 at the end of the 40th stock exchange trading day after the Annual General Meeting 2022, was based on the performance share plan:

Long-term incentive (performance share plan)

No payout was made from this tranche, as the set TSR and EPS targets were not achieved. The target-setting curve of the TSR component of the 2018/19 performance share plan tranche is unchanged from that of the 2021/22 tranche of the performance cash plan. The METRO starting share price for the TSR component was €14.64 compared to the determined ending share price of €8.23 and did not reach the barrier of entry compared to the equally determined TSR of the peer groups (MDAX and defined peer group) of the 2018/19 tranche. With regard to the EPS target, the barrier of entry was also not reached (barrier of entry: €0.95 in financial year 2020/21).

In addition to Christian Baier, the beneficiaries of the 2018/19 tranche were the former members of the Management Board Olaf Koch (Chairman of the Management Board until 31 December 2020) and Heiko Hutmacher (member of the Management Board until 31 December 2019).

Other non-monetary and supplemental benefits

The supplemental benefits to be granted to the members of the Management Board are contractually agreed, but vary individually in their amount and scope based on the respective contractual situation. They may include the following benefits and non-cash benefits, including any corresponding taxes: provision of a company car with the option of using an internal driving service; conclusion of an accident insurance policy, inclusion in a Directors and Officers (D&O) insurance policy subject to the statutory deductible requirement; subsidy for a preventive health check-up; subsidies for health and long-term care insurance; assumption of costs for security installations, school fees and relocation costs; as well as extended continued pay in the event of illness. Furthermore, there is the option to use company car budgets that have not been fully utilised for post-employment benefits. In exceptional cases, compensation payments may be made to newly appointed members of the Management Board for remuneration promised by the previous employer that lapses due to the change.

In the event of the death of a member of the Management Board during active service, his or her surviving dependants will be paid the fixed salary for the month in which the death occurred as well as for additional 6 months.

Share ownership guidelines

The members of the Management Board are mandated to build up a self-financed investment in METRO ordinary shares (personal investment) over a period of 5 years of service. The amount to be invested for the personal investment is 100% of the fixed salary for a regular member of the Management Board and 200% for the Chairman of the Management Board.

A sale of ordinary shares is only permitted if the personal investment is fulfilled and only for a number of ordinary shares exceeding the mandated personal investment. The personal investment must be retained until at least the date of retirement from the Management Board of the company.

According to the remuneration system, no shares or share options have been granted or promised to the members of the Management Board in financial year 2021/22.

Supplementary clauses

The employment contracts of the members of the Management Board also contain the following clauses:

Holdback (malus)/clawback clause

The Supervisory Board reserves the right to take extraordinary developments into account within reasonable limits. In the event of serious violations by a member of the Management Board of his or her legal obligations, the Supervisory Board is entitled, at its sole discretion, to withhold in whole or in part any components of the STI and the LTI that have not yet been paid out (holdback/malus) and to reclaim any components of the LTI that have already been paid out (clawback). The option of withholding and reclaiming exists even if the appointment as a member of the Management Board or the employment contract has already ended. However, the clawback option is only available until the end of the 3rd year after payment of the respective LTI.

In addition, the Supervisory Board has the right not to pay the remuneration of a member of the Management Board in whole or in part if he or she negligently or intentionally breaches his or her duties and the company suffers a loss as a result.

This is without prejudice to the right to reduce the remuneration to be paid in the future in the event of a deterioration of the company’s position according to § 87 Section 2 of the German Stock Corporation Act (AktG).

The Supervisory Board did not make use of these clauses in financial year 2021/22.

Post-contractual restraint on competition

In addition, the employment contracts of the members of the Management Board generally provide for a post-contractual restraint on competition. Accordingly, the members of the Management Board are prohibited from rendering services to or for a competitor for a period of 12 months after termination of the employment contract. For this purpose, compensation for non-competition has been agreed which corresponds to the target remuneration consisting of the fixed salary, STI and LTI for the duration of the post-contractual restraint on competition and is paid in monthly instalments. These payments are offset against remuneration earned through other work. The company has the option to waive the post-contractual restraint on competition prior to or upon termination of the employment contract with effect from receipt of the corresponding declaration. If the employment contract ends at the agreed contract end date, notification is given, no later than 9 months before the agreed contract end date, as to whether or not the Supervisory Board waives the post-contractual restraint on competition. The Supervisory Board has not issued a post-contractual restraint on competition for Andrea Euenheim and Eric Poirier, who left the Management Board in financial year 2021/22.

Contractual term and benefits in the event of employment termination

The term of the employment contracts is linked to the duration of the appointment. The initial appointment of members of the Management Board should not exceed 3 years.

Severance payments in cases of premature terminations of management roles without good cause are limited to 2 annual remunerations (severance cap) and must not exceed the remuneration that would be paid for the remaining term of the employment contract.

Change of control clause

In the event of a change of control, Christian Baier, with whom this clause was already agreed in a previously existing employment contract, has been granted the right to resign from office for good cause within a period of 6 months after the change of control with a notice period of 3 months to the end of the month and to terminate the Management Board contract on this date (extraordinary termination right).

The contractual provisions assume a change of control if either a single shareholder or a number of jointly acting shareholders acquire a controlling interest in the meaning of § 29 of the German Securities Acquisition and Takeover Act (WpÜG) by way of holding at least 30% of the voting rights and the change of control significantly interferes with the responsibilities of a member of the Management Board.

If the extraordinary termination right is exercised, or if the employment contract is terminated on the basis of an amicable agreement within 6 months from the change of control, there is an entitlement to a one-time remuneration payment for contractual claims during the remaining term of the employment contract. In this case, the amount of the severance pay is limited to 150% of the above referenced severance payment cap. The entitlement to a severance payment lapses if the employment is terminated by the company for good cause pursuant to § 626 of the German Civil Code (BGB).

No such clause has been agreed with the other members of the Management Board. No ‘change of control’ clause is agreed for new employment contracts (initial appointment).

Special remuneration

The Supervisory Board may decide on any – even retrospective – special remuneration for extraordinary performance at its reasonable discretion. The Supervisory Board did not make use of this clause in financial year 2021/22.

Sideline activities

The assumption of supervisory board mandates and offices of a comparable nature in companies outside the group, activities in associations and other committees that are in the interest of the company, as well as the assumption of tasks in charitable, social and other non-profit organisations require prior consent by the Presidential Committee.

If the members of the Management Board assume intra-group mandates, the remuneration of these mandates must be offset against the Management Board remuneration. Generally, this also applies to non-group mandates; however, the Presidential Committee may decide otherwise.

Granted and owed remuneration in financial year 2021/22

The following table shows the remuneration granted and owed to the current and former members of the Management Board in accordance with § 162 Section 1 Sentence 1 of the German Stock Corporation Act (AktG). The granted and owed remuneration includes the remuneration received in financial year 2021/22 as well as the remuneration components that were fully earned in financial year 2021/22 and whose performance period ends at the end of financial year 2021/22, even if payment is not made until financial year 2022/23. Thus, the STI shows the short-term variable remuneration for financial year 2021/22, which will be paid as scheduled in January 2023 (vesting period-based perspective). For the long-term incentive, the 2018/19 LTI tranche, which ended in financial year 2021/22, is disclosed in the granted and owed remuneration and thus the resulting inflow in financial year 2021/22 (payment-based perspective).

The supplemental benefits include the company’s contributions to the pension scheme. The fixed salary includes one-off payments or severance payments made to Christiane Giesen, Andrea Euenheim and Eric Poirier in financial year 2021/22. For Eric Poirier, it also includes a provision made at METRO AG for a contractual relationship with a group company. Christiane Giesen was granted a compensation payment at the start of her contract for remuneration promised by her previous employer, which will lapse as a result of her transfer to METRO AG; Andrea Euenheim and Eric Poirier received payments as part of their departure.

Maximum remuneration

The Supervisory Board has limited the amount of the total remuneration for the respective financial year (maximum remuneration). Moreover, the amounts of the individual remuneration components (variable remuneration, post-employment benefits plans, supplemental benefits) are also limited. The theoretically achievable maximum remuneration in the remuneration system is limited to €8.5 million for the Chairman of the Management Board and €5 million for an ordinary member of the Management Board. The theoretically achievable maximum remuneration under the current contractual agreement with the members of the Management Board is below these caps defined in the remuneration system. The theoretically achievable maximum remuneration for the members of the Management Board is determined individually by the Supervisory Board based on the remuneration components within the stated caps in each case. It is based on the negotiated fixed salary, the maximum payout amount of the STI (2 times the target amount) and the LTI (2.5 times the target amount) as well as the cap for the supplemental benefits (pension plus other supplemental benefits such as company cars). For financial year 2021/22, the individually agreed maximum amounts of remuneration granted in a full financial year are €6,271,600 for Dr Steffen Greubel, €4,516,000 for Christian Baier, €4,040,000 for Rafael Gasset, €2,996,000 for Christiane Giesen and €3,932,500 for Claude Sarrailh. For Andrea Euenheim, who left the Management Board on 31 March 2022, the maximum limit in a full financial year was €3,260,480; for Eric Poirier, who left the Management Board on 31 December 2021, it amounted to €4,065,000. Compliance with the maximum remuneration can be determined for the first time in the financial year in which the 4-year term of the LTI granted in financial year 2021/22 ends and the payment amount is determined. The individually determined maximum limits were carefully determined to ensure that they cannot be exceeded under the remuneration system.

Appropriateness of Management Board remuneration

The Presidential Committee and the Supervisory Board as a whole review the appropriateness of Management Board remuneration and its market conformity at regular intervals. The review is based on a horizontal and vertical comparison.

The horizontal (external) review of the appropriateness of the remuneration is based on a defined specific peer group and the MDAX. The specific peer group consists of 14 companies: Casino Guichard-Perrachon SA, Carrefour SA, CECONOMY AG, Fielmann AG, Kesko Oyi, Koninklijke Ahold Delhaize N.V., Wm Morrison Supermarkets PLC, ProSiebenSat.1 Media SE, PUMA SE, Rewe-Zentralfinanz eG, J Sainsbury plc, Sligro Food Group N.V., Tesco PLC and TUI AG. The peer group selection for the horizontal comparison is based on METRO’s business segment, on international presence as well as on key financial figures, market capitalisation and number of employees.

The vertical review of the Management Board remuneration compares the remuneration of the senior executives (Executive Vice Presidents, Senior Vice Presidents), managers (Vice Presidents) and non-managerial employees of METRO AG.

The last appropriateness review of the remuneration of the Management Board was carried out in financial year 2021/22 with the assistance of an independent external remuneration expert. The appropriateness of the Management Board’s remuneration was confirmed during this review.

Termination benefits in financial year 2021/22

An agreement was reached with Eric Poirier in financial year 2021/22 for early termination of his employment contract with effect from the end of 31 December 2021. The pro rata temporis STI until 31 December 2021 will be paid to Eric Poirier in accordance with the agreement. The tranches of the LTI (performance share plan tranche 2019/20 and performance cash plan tranche 2020/21) already granted to Olaf Koch remain in place and will be settled in accordance with the terms of the plan. Eric Poirier received a severance payment of €2,675,000. Furthermore, a provision of €1.2 million was created for a contractual relationship that still exists for limited time.

An agreement on early termination of the employment contract was also reached with Andrea Euenheim in financial year 2021/22. It was terminated with effect from the end of 31 March 2022. In accordance with the contract, the pro rata temporis STI until 31 March 2022 will be paid to Andrea Euenheim. Additionally, the tranches of the already granted LTI (performance share plan tranche 2019/20 and performance cash plan tranche 2020/21 as well as tranche 2021/22) will be settled in accordance with the plan conditions. Andrea Euenheim received a one-off payment of €225,000 in connection with the early termination of her employment contract.