The Personnel Committee of the Supervisory Board of Wincor Nixdorf AG is responsible for determining the structure and extent of remuneration payable to members of the Board of Directors.
The compensation of members of the Board of Directors of Wincor Nixdorf AG is determined on the basis of the company’s size and global presence, its economic and financial situation as well as the level and structure of management board compensation offered by similar companies based in Germany and abroad. In addition, the duties and the contribution of the respective members of the Board of Directors are taken into account. The level of compensation is designed to be competitive within the market for highly qualified executives and to provide incentives for a successful labor within a high-performance environment.
The remuneration of the Board of Directors is focused on performance and comprises the four components described below:
1. Fixed basic salary plus fringe benefits
2. Variable compensation (bonus) dependent on the attainment of specific targets (performance-based component)
3. Share-based compensation (long-term incentive component) and
4. Pension commitment.
Within this context, the fixed basic salary, the fringe benefits and the pension commitment represent non-performance-based components. The fixed basic salary is payable in monthly installments of equal amounts. The fringe benefits mainly comprise contributions made to accident and liability insurance policies as well as the provision of a company car. Additionally, all members of the Board of Directors of Wincor Nixdorf AG are entitled to retirement benefits, as described in detail in the section entitled Pension Commitments.
Variable, performance-based compensation payable in the form of a bonus is dependent on the attainment of specific targets defined within the respective employment contracts. These targets are set on the basis of EBITDA (Glossary) (earnings before interest, taxes, depreciation and amortization) and Group net profit. Each target receives the same weighting and will be settled separately. If the agreed budget per target is met in full (100%), the member of the Board of Directors receives 100% of his/her annual fixed basic salary as a bonus. If he/she falls short of the agreed budget by a maximum of 20%, the bonus is reduced on a straight-line basis. If the specified targets are met to an extent equivalent to 80%, the member of the Board of Directors receives 25% of the agreed bonus. If the level of target attainment remains below 80% with regard to one of the two targets, the entitlement to a bonus payment is no longer applicable; in this case, the Supervisory Board must decide, as in duty bound, on the granting of a bonus and the possible extent of such a bonus. If the level of target attainment reaches 120%, the associated bonus rises to 175% of the applicable fixed basic salary of the Board member in question. In accordance with contractual requirements, variable compensation may be equivalent to a maximum of 200% of the respective fixed annual basic salary. All targets are focused on increasing enterprise value. The targets to be applied as a basis of calculation for the bonus amounts payable for fiscal 2006/2007, were defined at the Supervisory Board meeting of September 19, 2006. The bonus is payable in December, following adoption of the Group financial statements by the Supervisory Board.
Members of the Board of Directors receive share options as a form of compensation with a long-term incentive effect. The number of share options to be issued to each member of the Board of Directors is specified as part of an individual contractual agreement. The conditions of exercise for share options granted to the Board of Directors are identical to the conditions of exercise specified for other entitled persons. For a detailed description of the company’s share-based payment programs, please refer to 16 in the notes to the Group financial statements.
The fixed basic salary and the variable compensation are used as the basis for determining so-called annual target remuneration. Annual target remuneration is specified for the entire term of the contract.
The non-performance-based and performance-based components of compensation are itemized below and relate to all duties performed by the members of the Board of Directors within the Group:
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€ |
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Components of compensation | |||
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Non performance-based |
Performance-based |
Total | |
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Fixed basic salary |
Fringe benefits |
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Karl-Heinz Stiller1) |
750,000.00 |
9,763.63 |
375,000.00 |
1,134,763.63 |
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Eckard Heidloff2) |
533,333.33 |
24,834.03 |
825,000.00 |
1,383,167.36 |
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Stefan Auerbach |
400,000.00 |
26,151.39 |
600,000.00 |
1,026,151.39 |
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Jürgen Wilde |
275,000.00 |
47,184.89 |
412,500.00 |
734,684.89 |
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Dr. Jürgen Wunram3) |
233,333.33 |
10,983.05 |
350,000.00 |
594,316.38 |
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Total |
2,191,666.66 |
118,916.99 |
2,562,500.00 |
4,873,083.65 |
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1) |
In coordination with the Supervisory Board, Karl-Heinz Stiller stepped down from the post of President & CEO and member of the Board of Directors of Wincor Nixdorf AG, effective from the close of the AGM on January 29, 2007, and was elected to the Supervisory Board of Wincor Nixdorf AG as a successor to Johannes P. Huth. |
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2) |
Eckard Heidloff was appointed as President & CEO of Wincor Nixdorf AG, effective from January 29, 2007, thereby succeeding Karl-Heinz Stiller on the Board of Directors. |
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3) |
Dr. Jürgen Wunram was appointed as a member of the Board of Directors of Wincor Nixdorf AG, effective from March 1, 2007. |
In coordination with the Supervisory Board, Karl-Heinz Stiller stepped down as President & CEO and member of the Board of Directors, effective from the close of the Annual General Meeting of Shareholders on January 29, 2007, and was elected by the Annual General Meeting of Shareholders on January 29, 2007, as the successor to Johannes P. Huth on the Supervisory Board of Wincor Nixdorf AG. In consideration of his early withdrawal from the Board of Directors, as coordinated with the Supervisory Board, and the termination of his contractual agreement as a member of Board of Directors, which had an original term until April 30, 2009, Mr. Stiller received a one-off payment of €500,000, which has been presented as a component of fixed basic salary in the table of compensation. In addition, an agreement was concluded whereby Mr. Stiller shall be entitled to exercise the options received as part of the share-based payment programs of 2005 and 2006 (in each case 15,000 options, after stock split), subject to the other conditions of the programs once the two-year lock-up period specified for each program has elapsed.
