System of Compensation for the Board of Directors.

The Supervisory Board of Wincor Nixdorf AG, acting on the recommendations of its Personnel Committee, which deals with the employment contracts of members of the Board of Directors, determines the overall level of compensation for each member of the Board of Directors. Additionally, it regularly reviews and makes decisions relating to the compensation system for the Board of Directors, as well as the appropriateness of the total compensation payable to each member of the Board of Directors, including all significant elements within the contract. The requirements of the Act on the Appropriateness of Management Board Compensation (Gesetz zur Angemessenheit der Vorstandsvergütung – VorstAG) dated July 31, 2009, have been met with regard to existing employment contracts and to the extension of employment contracts with 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, contribution, and performance of each member 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 successful work that contributes in turn to the organization’s sustained development as part of a high-performance culture. Wincor Nixdorf AG regularly takes part in remuneration reviews relating to both its own industry and other MDAX enterprises, with the express purpose of ensuring horizontal comparability of Board of Director compensation. Furthermore, when determining compensation levels for its Board of Directors, the pay scale and remuneration system within the Wincor Nixdorf Group are taken into account (verticality).

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 (short-term performance-based component)
  3. Share-based compensation (long-term incentive component)
  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 (earnings before interest, taxes, depreciation, and amortization) and Group net income. Each target receives the same weighting and is 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 for calculating the bonus amounts payable for fiscal 2015/2016 were defined at the Supervisory Board meeting of September 23, 2015. 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. For each member of the Board of Directors, the share-based compensation as a long-term incentive component should lie between 30% and 40% of target annual income. The remainder should be derived from the member’s fixed annual salary and pension commitment (35%-50%) and from variable compensation (20%-35%) (bonus). Full details are established by the Supervisory Board.

The non-performance-based and short-term, performance-based components of compensation for members of the Board of Directors are itemized below and relate to all duties performed within the Group:

 

Non-performance-based

Performance-based

Total

 

Fixed basic salary

Fringe benefits

 

 

 

 

 

2015/2016

2014/2015

2015/2016

2014/2015

2015/2016

2014/2015

2015/2016

2014/2015

1)

Member of the Board of Directors since March 1, 2016.

2)

Left the Company effective from April 30, 2015.

Eckard Heidloff

700,000.00

700,000.00

37,301.13

39,379.59

1,400,000.00

18,550.00

2,137,301.13

757,929.59

Dr. Jürgen Wunram

500,000.00

500,000.00

25,618.51

25,509.04

1,000,000.00

13,250.00

1,525,618.51

538,759.04

Olaf Heyden

396,666.73

350,000.00

24,114.68

23,331.03

793,333.46

9,275.00

1,214,114.87

382,606.03

Dr. Ulrich Näher1)

250,833.38

0.00

19,289.89

0.00

501,666.76

0.00

771,790.03

0.00

Jens Bohlen2)

0.00

204,166.69

0.00

12,472.63

0.00

9,275.00

0.00

225,914.32

Total

1,847,500.11

1,754,166.69

106,324.21

100,692.29

3,695,000.22

50,350.00

5,648,824.54

1,905,208.98

The performance-related payments for the fiscal years shown in the table take into account differences between the accrued amounts at the corresponding reporting dates and the amounts actually paid out in the subsequent periods.

In line with German Corporate Governance Code (GCGC) recommendations, compensation payable to the Board of Directors for fiscal 2015/2016 has been disclosed in an itemized format based on the so-called model tables recommended by the GCGC. One of the key features of this presentation is the separate disclosure of benefits granted and actual allocations.

The benefits granted include fixed compensation and fringe benefits as well as short-term variable target compensation in the event of full target attainment and long-term share-based compensation measured at fair value at the date of granting. The details presented with regard to benefits granted also include benefit expense. Additionally, the minimum and maximum figures attainable are listed for each component of compensation.

The allocation includes fixed compensation actually granted in fiscal years 2014/2015 and 2015/2016 as well as the total amount of variable compensation paid by the Company. In accordance with GCGC recommendations, the list also includes the respective benefit expenses, despite the fact that these are not, strictly speaking, considered to be allocations.

Benefits Granted and Disbursements in Accordance with the German Corporate Governance Code (GCGC) – Eckard Heidloff.

Eckard Heidloff
President & CEO
Board member since March 8, 2004

Benefits granted

Allocation

2014/2015

2015/2016

2015/2016
(min.)

2015/2016
(max.)

2014/2015

2015/2016

1)

Possible range between 0% (no payment) and 200% (maximum payment).

2)

Payments for prior years.

3)

n.m. = no maximum amount; the contracts of employment include suitable provisions to ensure that the amount allocated does not exceed compensation granted in an unreasonable manner.

Fixed compensation

700,000.00

700,000.00

700,000.00

700,000.00

700,000.00

700,000.00

Fringe benefits

39,379.59

37,301.13

37,301.13

37,301.13

39,379.59

37,301.13

Total fixed compensation

739,379.59

737,301.13

737,301.13

737,301.13

739,379.59

737,301.13

Short-term variable compensation1)

700,000.00

700,000.00

0.00

1,400,000.00

18,550.002)

1,400,000.00

Long-term share-based compensation

 

 

 

 

 

 

Share option program 2012 (2012-2016)

1,511,734.18

Share option program 2015 (2015-2019)

893,226.07

Share option program 2016 (2016-2020)

817,010.48

0.00

n.m.3)

Total variable compensation

1,593,226.07

1,517,010.48

0.00

n.m.3)

18,550.00

2,911,734.18

Service cost

126,082.00

126,082.00

126,082.00

126,082.00

126,082.00

126,082.00

Total

2,458,687.66

2,380,393.61

863,383.13

n.m.3)

884,011.59

3,775,117.31

Benefits Granted and Disbursements in Accordance with the German Corporate Governance Code (GCGC) – Dr. Jürgen Wunram.

Dr. Jürgen Wunram
Deputy President & CEO
Board member since March 1, 2007

Benefits granted

Allocation

2014/2015

2015/2016

2015/2016
(min.)

2015/2016
(max.)

2014/2015

2015/2016

1)

Possible range between 0% (no payment) and 200% (maximum payment).

2)

Payments for prior years.

3)

n.m. = no maximum amount; the contracts of employment include suitable provisions to ensure that the amount allocated does not exceed compensation granted in an unreasonable manner.

Fixed compensation

500,000.00

500,000.00

500,000.00

500,000.00

500,000.00

500,000.00

Fringe benefits

25,509.04

25,618.51

25,618.51

25,618.51

25,509.04

25,618.51

Total fixed compensation

525,509.04

525,618.51

525,618.51

525,618.51

525,509.04

525,618.51

Short-term variable compensation1)

500,000.00

500,000.00

0.00

1,000,000.00

13,250.002)

1,000,000.00

Long-term share-based compensation

 

 

 

 

 

 

Share option program 2012 (2012-2016)

 

1,079,808.36

Share option program 2015 (2015-2019)

638,017.48

Share option program 2016 (2016-2020)

583,581.44

0.00

n.m.3)

Total variable compensation

1,138,017.48

1,083,581.44

0.00

n.m.3)

13,250.00

2,079,808.36

Service cost

100,000.00

100,000.00

100,000.00

100,000.00

100,000.00

100,000.00

Total

1,763,526.52

1,709,199.95

625,618.51

n.m.3)

638,759.04

2,705,426.87

Benefits Granted and Disbursements in Accordance with the German Corporate Governance Code (GCGC) – Olaf Heyden.

Olaf Heyden
Member of the Board of Directors since May 1, 2013

Benefits granted

Allocation

2014/2015

2015/2016

2015/2016
(min.)

2015/2016
(max.)

2014/2015

2015/2016

1)

Possible range between 0% (no payment) and 200% (maximum payment).

2)

Payments for prior years.

3)

n.m. = no maximum amount; the contracts of employment include suitable provisions to ensure that the amount allocated does not exceed compensation granted in an unreasonable manner.

Fixed compensation

350,000.00

396,666.73

396,666.73

396,666.73

350,000.00

396,666.73

Fringe benefits

23,331.03

24,114.68

24,114.68

24,114.68

23,331.03

24,114.68

Total fixed compensation

373,331.03

420,781.41

420,781.41

420,781.41

373,331.03

420,781.41

Short-term variable compensation1)

350,000.00

396,666.73

0.00

793,333.46

9,275.002)

793,333.46

Long-term share-based compensation

 

 

 

 

 

 

Share option program 2012 (2012-2016)

Share option program 2015 (2015-2019)

446,617.03

Share option program 2016 (2016-2020)

501,882.16

0.00

n.m.3)

Total variable compensation

796,617.03

898,548.89

0.00

n.m.3)

9,275.00

793,333.46

Service cost

50,000.00

50,000.00

50,000.00

50,000.00

50,000.00

50,000.00

Total

1,219,948.06

1,369,330.30

470,781.41

n.m.3)

432,606.03

1,264,114.87

Benefits Granted and Disbursements in Accordance with the German Corporate Governance Code (GCGC) – Dr. Ulrich Näher.

Dr. Ulrich Näher
Member of the Board of Directors
since March 1, 2016

Benefits granted

Allocation

2014/2015

2015/2016

2015/2016
(min.)

2015/2016
(max.)

2014/2015

2015/2016

1)

Possible range between 0% (no payment) and 200% (maximum payment).

2)

n.m. = no maximum amount; the contracts of employment include suitable provisions to ensure that the amount allocated does not exceed compensation granted in an unreasonable manner.

3)

Share options from 2015 were granted prior to appointment as member of the Board of Directors.

Fixed compensation

0.00

250,833.38

250,833.38

250,833.38

0.00

250,833.38

Fringe benefits

0.00

19,289.89

19,289.89

19,289.89

0.00

19,289.89

Total fixed compensation

0.00

270,123.27

270,123.27

270,123.27

0.00

270,123.27

Short-term variable compensation1)

0.00

250,833.38

0.00

501,666.76

0.00

501,666.76

Long-term share-based compensation

 

 

 

 

 

 

Share option program 2012 (2012-2016)

Share option program 2015 (2015-2019)3)

446,617.03

Share option program 2016 (2016-2020)

501,882.16

0.00

n.m.2)

Total variable compensation

446,617.03

752,715.54

0.00

n.m.2)

0.00

501,666.76

Service cost

0.00

29,166.67

29,166.67

29,166.67

0.00

29,166.67

Total

446,617.03

1,052,005.48

299,289.94

n.m.2)

0.00

800,956.70