Total remuneration of the Management Board
The Supervisory Board decides and routinely reviews the remuneration system and the essential contract terms and conditions for the Management Board members. Total Management Board remuneration comprises a fixed monthly salary, a management bonus and sharebased payments as well as fringe benefits and pension benefits. The Company does not provide an individualized disclosure of the remuneration with respect to privacy protection. Management Board and Supervisory Board agree that such a disclosure would not contribute to greater transparency in the form of additional information relevant to the capital market. By resolution of the Annual General Meeting of May 13, 2014, the Company is exempt from its legal obligation for individualized disclosure of Management Board remuneration for the period of five years.
Management Board remuneration comprises fixed components and variable incentive components. In financial year 2016, the members of the Management Board received a total fixed remuneration of 1,509 thousand Euro (2015: 1,515 thousand Euro) and variable remuneration of 1,280 thousand Euro (2015: 997 thousand Euro). The variable incentive components are linked to the Group’s current earnings before taxes on the one hand and to personal, individualized targets, agreed on annually with the Supervisory Board, on the other hand. There are indirect pension commitments of a pension fund to members of the Management Board of Elmos. The pension fund has taken out corresponding reinsurance policies for the completely congruent coverage of its plan contributions. In 2016, payments for these reinsurance policies amounted to 408 thousand Euro (2015: 454 thousand Euro), included in the fixed components of the remuneration.
Remuneration paid by the Company to former Management Board members or their surviving dependents amounted to 120 thousand Euro in financial year 2016 (2015: 224 thousand Euro). In addition to that, insurance premiums of 113 thousand Euro were paid for this group of beneficiaries (2015: 111 thousand Euro). Facing these amounts are reimbursements from reinsurance policies in the amount of 116 thousand Euro (2015: 119 thousand Euro). Pension provisions for former Management Board members or their surviving dependents came to 1,520 thousand Euro as of December 31, 2016 (2015: 1,543 thousand Euro). Total pension provisions for former Management Board members or their surviving dependents recognized for the Group are covered in full by the time value of pension plan reinsurance policies.
Apart from pension commitments, insurance benefits and compensation agreements in case of a change of control or as a consequence of a non-competition clause, 25 no additional benefits have been promised to any Management Board member in case of the termination of occupation according to contract. Nor did any member of the Management Board receive benefits or corresponding commitments from third parties with regard to his position on the Management Board in the past financial year. The terms of share-based payments already promised may exceed the respective Management Board member’s occupation period in the individual case.
Total remuneration of the Supervisory Board
The Supervisory Board’s remuneration is defined by Section 9 of the Articles of Incorporation. The Supervisory Board members receive fixed and incentive payments in addition to the reimbursement of their expenses. The incentive remuneration is linked to the dividend and thus oriented toward the Company’s long-term and sustained success. 25% of the fixed remuneration and 50% of the variable remuneration are paid in shares of the Company. A holding period of three calendar years as of the shares’ respective grant date applies to shares received as remuneration. The Supervisory Board members are not granted Elmos stock options for their positions on the Board.
Compliant with the recommendation of the German Corporate Governance Code for Supervisory Board remuneration in consideration of chairmanship and vice chairmanship, the chairman receives twice the amount of the regular fixed and variable payments and the vice chairman receives one and a half times of said amount. The Supervisory Board members’ remuneration is disclosed in summarized form, yet not individualized. This also applies for payments potentially made to Supervisory Board members for individually performed services, particularly consulting and mediation services.
The fixed remuneration paid to members of the Supervisory Board in financial year 2016 amounted to the total of 87 thousand Euro (2015: 84 thousand Euro). This amount includes expenses and disbursements. Payments of variable remuneration amounted to 218 thousand Euro (2015: 218 thousand Euro). The members of the Supervisory Board received no further compensation for individually performed services such as consulting services.