The recommendations of our external compensation committee, which was established last year, were taken into consideration in the decisions on the compensation packages for the year 2012.
Based on the reduction of the proportion of variable remuneration it dropped less than 10% of earnings in 2012 – the lowest level in many years.
We improved the transparency of remuneration and completely eliminated multi-year bonus guarantees.
Bonus payments for our senior management are now geared to the sustainability of success and are consequently disbursed over several years in the form of deferred remuneration.
At the highest management level, the deferral period for bonus payments has been extended: In the future a one-time payment will be remitted only after five years (instead of payments over a period of three years).
The system also foresees “malus” penalty provisions (“claw backs”)
Control mechanisms were reinforced in order to reduce the scope for inacceptable behavior. Violations will have an impact on promotions and determination of annual bonuses.