COMMERZBANK AKTIENGESELLSCHAFT

Group Financial Statements
286
230 Commerzbank Annual Report 2011
d) BRE Bank SA
In March 2008, BRE Bank SA launched two share-based remuneration
plans for the members of its Management Board. The
first plan provides for the subscription of BRE Bank shares and
the second for the subscription of Commerzbank shares. The
members of the Management Board can participate in these
plans from 2009 to 2018. Participation is, however, linked to
various conditions, such as BRE Bank’s return on equity and its
net profit.
While the plan for the subscription of BRE Bank shares has
the same conditions every year, the amount of Commerzbank
shares subscribed is determined each year by their price during
the 30 days prior to their respective subscription dates. Both
plans are classified as share-based payments settled in the form
of equity instruments.
e) Other consolidated companies
In addition, it is possible for selected employees at other
consolidated companies (e.g. comdirect bank Aktiengesellschaft)
to participate through share ownership models in the
performance of the respective companies. Payment in such
cases depends on the extent to which fixed performance targets
are attained. These models include direct investment in shares
of the respective companies. Frequently, these are offered at
reduced prices and/or in combination with call or put options. In
addition, warrants and share subscription rights are also issued.
Bonuses are also granted which may either be used to subscribe
for shares or are paid out in cash. The observance of vesting
periods and agreements for later repurchase determine whether
additional income is received.
2. Accounting treatment and measurement
The staff compensation plans described here are accounted for
under the rules of IFRS 2 - Share-based Payment. IFRS 2
distinguishes between share-based payments settled in the form
of equity instruments and those settled in cash. For both forms,
however, the granting of share-based payments has to be
recognised at fair value in the annual financial statements.
• Equity-settled share-based payment transactions
The fair value of share-based payments settled in the form of
equity instruments is recognised as personnel expense within
equity in the capital reserve. The fair value of the STI
component is determined on the date on which the rights are
granted. The fair value of the LTI component is determined
once only on the date of performance appraisal I (March n+1)
as an average of the XETRA closing prices in the months
January, February and December of the previous year and is
recognised in profit or loss on a straight-line basis over the
term of the vesting period. The amount recognised as an
expense may only be adjusted if the Bank’s estimate of the
number of equity instruments to be finally issued changes.
If rights cannot be exercised because the conditions for
exercise (e.g. a performance target) are not met, no change is
made to the amounts already recognised in equity.
• Cash-settled share-based payment transactions
The portion of the fair value of share-based payments settled
in cash that relates to services performed up to the date of
measurement is recognised as personnel expense while at
the same time being recorded as a provision. The fair value is
recalculated on each balance sheet date up to and including
the settlement date. Any change in the fair value of the
obligation must be recognised through profit or loss. On the
date of settlement, therefore, the provision must correspond
as closely as possible to the amount payable to the eligible
employees. In the case of share awards the portion of the
provisions attributable to share awards is reassigned from
other personnel provisions to the provision for share awards
at the date of the award. The provision is calculated as the
product of the number of rights allocated multiplied by the
average XETRA closing price of Commerzbank shares in
January and February of the year of the award and December
of the previous year. The provisions fluctuate on each balance
sheet date in parallel with the performance of the
Commerzbank Aktiengesellschaft share price. Discounts are
not applied for staff natural wastage as the share awards do
not lapse on the departure or death of an employee. If
Commerzbank pays dividends during the vesting period a
cash payment equal to the dividend will be paid out for each
share award at the payout date in addition to the payout
value of the share awards.