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Remuneration of the Board of Management
Individual Remuneration
The individual remuneration of members of the Board of Management is based on their individual performance and the performance, financial position and future prospects of the company, taking into account peer group performance.
Remuneration of the Board of Management
The remuneration paid to the members of the Board of Management comprises a fixed base salary, a variable annual bonus (short-term incentive plan) and a long-term incentive plan.
Fixed base salary
The fixed base salary also covers the assumption of functions on the supervisory boards of subsidiaries, non-cash benefits (e.g. a company car) and other payments (e.g. reimbursement of business expenses). Variable payments comprise payments made under the short-term incentive plan, which are based on the attainment of individually agreed objectives for the fiscal year, and payments under the long-term incentive plan. The long-term incentive plan is based on two key financial performance indicators, ROCE (return on capital employed) and EBITDA (earnings before interest, taxes, depreciation and amortization). It is not linked to the share price of Degussa. Under the long-term incentive plan, the members of the Board of Management are granted performance options, which run for a maximum of five years. There is a cap on the maximum value of these options.
Performance Options
There is a two-year lock-up period, after which the number of performance options that each member can exercise is determined by the ROCE in a given year. The value of individual performance options is derived from the extent to which the EBITDA trend exceeds the average EBITDA trend for a group of European specialty chemical companies (peer group).
Pension Entitlement
In addition, the members of the Board of Management have been granted a pension entitlement.
Total Remuneration
The total remuneration of the Board of Management was € 5.2 million in 2005 (2003:€ 4.2 million). € 1.7 million (2003: € 1.6 million) comprised fixed base salaries, which also cover the assumption of functions on the supervisory boards of subsidiaries, non-cash benefits and other payments. Short-term variable payments for annual bonuses totaled € 2.4 million (2003: € 2.6 million) and relate to the fulfillment of individually agreed performance targets. In 2005 a total of 70,500 performance options (2004: 70.500) were issued to members of the Board of Management under the Long-Term Incentive Plan (LTI Plan).
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Remuneration of the Board of Management
The table below shows the remuneration paid to individual members of the Board of Management for 2005:
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Annual Income |
| |
Fixed salary |
Variable bonus |
LTI options exercised |
Total |
| |
in €'000 |
in €'000 |
in €'000 |
in €'000 |
| Prof. Dr. Utz-Hellmuth Felcht |
618.6 |
770.0 |
337.3 |
1,725.9 |
| Dr. Alfred Oberholz |
360.9 |
583.0 |
239.9 |
1,183.8 |
| Dr.Thomas Schoeneberg |
367.8 |
530.0 |
239.9 |
1,137.7 |
| Heinz-Joachim Wagner |
387.2 |
557.0 |
239.9 |
1,184.1 |
| Total |
1,734.5 |
2,440.0 |
1,057.0 |
5,231.5 |
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Total LTI options*) |
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No. of options held as of Dec. 31, 2004 |
No. of options exercised in 2005 |
No. of options granted in 2005 |
No. of options held as of Dec. 31, 2005 |
| Prof. Dr. Utz-Hellmuth Felcht |
45,000 |
8,370 |
22,500 |
59,130 |
| Dr. Alfred Oberholz |
32,000 |
5,952 |
16,000 |
42,048 |
| Dr.Thomas Schoeneberg |
32,000 |
5,952 |
16,000 |
42,048 |
| Heinz-Joachim Wagner |
32,000 |
5,952 |
16,000 |
42,048 |
| Total |
141,000 |
26,226 |
70,500 |
185,274 |
* The tranches of the LTI Plan were valued as of December 31, 2005, where appropriate, with the aid of estimates for the peer group companies. Subsequent payments under the LTI Plan will be based on the budget set following correction of these estimates in the light of the published data on the peer group companies.