SEC Form 20-F - Deutsche Bank Annual Report 2012

Deutsche Bank
Annual Report 2010 on Form 20-F
Item 6: Directors, Senior Management and Employees 105
The bonus, for which an individual target figure has been defined (full Management Board member € 1,150,000,
Management Board Chairman € 4,000,000) comprises of two components; these components have a multi-year
basis of assessment and their amounts are each calculated with the half of the target figure and a respective
factor. The first factor depends on our achieved two year average return on equity in comparison to our internal
plan for each respective year. The second factor depends on the amount of our two year achieved average
return on equity to which a pre-defined multiplier is linked. For the 2010 financial year for the second factor only
our 2010 return on equity is considered, as a respective measure for the previous year was not contractually
agreed. Extraordinary effects are not taken into account when determining the return on equity which is basis
for the factors. The bonus calculated accordingly is limited to 150 % of the target figure (a “cap”). The bonus is
not payable if certain previously defined minimum levels are not reached. The calculated bonus may be
increased or reduced by up to 50 % especially in consideration of the individual’s contributions and risk-based
factors. Accordingly, the maximum bonus may amount to 225 % of the target figure.
The LTPA is based on the performance of the Deutsche Bank share. The LTPA reflects the ratio between our
total shareholder return based on a three year period and the corresponding average figure for a select group
of comparable companies of six leading banks. Of these, two are from the eurozone, two are from Europe
outside the eurozone and another two are from the United States of America (eurozone: Banco Santander and
BNP Paribas; Europe outside the eurozone: Barclays and Credit Suisse; USA: Goldman Sachs and J.P. Morgan
Chase). The amount of the LTPA to be paid to the Management Board members is based on an individual
target figure (full Management Board member € 2,175,000, Management Board Chairman € 4,800,000) and
derived from the achieved relative total shareholder return. In case of an over-performance, a limit of 125 % of
the target figure applies. If our total shareholder return as described is less than the corresponding average of
the group of comparable companies, the disbursal of the LTPA is reduced on a greater than one-to-one basis.
If the ratio specified above moves below a defined minimum value, disbursal is fully forfeited.
The amount of the Division Incentive is determined by considering the individual contribution of the Management
Board member with such entitlement as well as the performance of the CIB Group Division (e.g., on the basis
of net income before taxes), also in relation to peers and set targets, as well as risk aspects (e.g., the development
of risk-weighted assets or Value-at-Risk).
Long-Term Incentive
At least 60 % of the variable compensation (bonus, LTPA and if applicable the Division Incentive) is granted as
deferred compensation, so that its delivery is spread out over a longer vesting period and it is subject to forfeiture
until vesting. A minimum of 50 % of deferred compensation is granted as equity-based compensation
(Restricted Equity Awards). The final value of the Restricted Equity Awards depends on the value of the
Deutsche Bank share upon their delivery. The part of the deferred compensation that is not equity-based is
granted as deferred cash-based compensation (Restricted Incentive Awards).
Both the Restricted Equity Awards and the Restricted Incentive Awards vest in four equal tranches, starting
approximately one and a half years after grant and then in intervals of one year, in each case, so that their
vesting stretches over a total period of approximately four and a half years. All deferred compensation components
(Restricted Equity Awards and Restricted Incentive Awards) have a long-term incentive effect as they are
subject to certain forfeiture conditions until they vest. Awards may be forfeited based on a negative Group
result, but also due to individual misconduct (e.g., upon a breach of regulations) or individual negative contributions
to results. Members of the Management Board are not permitted to limit or cancel out the risk in connection
with the deferred compensation components through hedging transactions or other countermeasures.