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METRO GROUP : ANNUAL REPORT 2010 : BUSINESS → NOTES : OThER NOTES The bonus values for the target bonus of the tranche 2008 are based on the condition that the target price is attained. The payment of the share bonus may be limited to the amount of the gross annual fixed salary. Performance share plan and share ownership guidelines (2009–2013) In 2009, METRO AG replaced the previous Share bonus programme with a performance share plan. Executives are given an individual target amount for the performance share plan (target value) in accordance with the significance of their functional responsibilities. The target number of performance shares is calculated by dividing this target value by the share price upon allotment (based on the average price of the Metro share during the three months up to the allotment date). A performance share entitles its holder to a cash payment matching the price of the Metro share on the payment date (based on the average price of the Metro share during the three months up to the payment date). Based on the relative performance of the Metro share compared to the median of the dAX 30 and dow Jones Euro Stoxx Retail indices – total return – the final number of payable performance shares is determined after the end of a performance period of at least 3 and at most 4.25 years. It corresponds to the target number of shares when an equal performance with said stock market indices is achieved. up to an outperformance of 60 percent, the number increases on a straight-line basis to a maximum of 200 percent of the target amount. up to an underperformance of 30 percent, the number is accordingly reduced to a minimum of 50 percent. In the case of an underperformance of more than 30 percent, the number is reduced to 0. Payment can be made at six possible times. The earliest payment date is three years after allotment of the performance shares. from this time, payment can be made every three months. Executives can choose the payment date upon which they wish to exercise their performance shares. A distribution over several payment dates is not allowed. The payment cap amounts to five times the target value. METRO GROuP introduced so-called share ownership guidelines along with its performance share plan: as a pre- → p. 210 condition of payments of performance shares, eligible executives are obliged to undertake a continuous selffinanced investment in Metro shares up to the end of the three-year blocking period. This ensures that, as shareholders, they will directly participate in share price gains as well as potential losses of the Metro share. The required investment volume amounts to between about 50 percent and 85 percent of the individual target value. The value of the performance shares allotted in 2010 amounted to €26.7 million (previous year: €34.6 million) at the time of the allotment and was calculated by external experts using recognised financial-mathematical methods (Monte Carlo simulation). The following conditions apply: Tranche End of blocking period 3-month average price before allotment Number of performance shares 2010 August 2013 €42.91 766,954 2009 August 2012 €36.67 780,747 Total expenses on share-based compensation programmes after the cost of hedging transactions amount to €32 million (previous year: €21 million) in the financial year 2010. The related provisions as of 31 december 2010 amount to €60 million (previous year: €13 million). The 2008 tranche with a remaining term of up to one year accounts for €31 million (previous year: €8 million) of this total, the 2009 tranche for €23 million (previous year: €5 million) and the 2010 tranche for €6 million. 50. Management Board and Supervisory Board Compensation of members of the Management Board in the financial year 2010 Remuneration of the active members of the Management Board essentially consists of a fixed salary and performance-based entitlements (short-term incentive) as well as the share-based payments (long-term incentive) granted in the financial year 2010. The amount of the performance-based remuneration for members of the Management Board essentially depends on the development of net earnings and the return on capital employed (RoCE) and may also consider the attainment of individually set targets. The use of the key ratio net earnings
METRO GROUP : ANNUAL REPORT 2010 : BUSINESS → NOTES : OThER NOTES combined with RoCE rewards profitable growth of METRO GROuP. Remuneration of the active members of the Management Board in the financial year 2010 amounted to €17.3 million (previous year: €16.0 million). This includes €4.3 million (previous year: €4.7 million) in fixed salaries, €10.7 million (previous year: €7.7 million) in performance-based entitlements, €1.7 million (previous year: €3.0 million) in sharebased remuneration and €0.6 million (previous year: €0.6 million) in other remuneration. Share-based remuneration granted in the financial year 2010 (performance shares) is posted at fair value at the time of granting. Share-based remuneration with expiration dates in the financial year 2010 or beyond resulted in expenses of €3.0 million. The members of the Management Board received 48,939 performance share units. Other remuneration consists of non-cash benefits and expense allowances. Total compensation of former members of the Management Board former members of the Management Boards of METRO AG and the companies that were merged into METRO AG as well as their surviving dependants received €27.4 million (previous year: €4.3 million). The cash value of provisions for current pensions and pension entitlements made for this group amounts to €48.3 million (previous year: €47.4 million). The information released pursuant to § 314 Section 1 No. 6a Sentence 5 to 9 of the German Commercial Code can be found in the extensive remuneration report in chapter 8 of the Group management report. Compensation of members of the Supervisory Board The total remuneration of all members of the Supervisory Board in the financial year 2010 amounted to €1.7 million (previous year: €1.7 million). Additional information on the remuneration of members of the Supervisory Board can be found in the extensive remuneration report in chapter 8 of the Group management report. → p. 211 51. Auditor’s fees The following fees related to the services rendered by auditor KPMG AG Wirtschaftsprüfungsgesellschaft and its associated companies were recorded as expenses. Since the integration of KPMG CIS as of 1 february 2010, this national KPMG subsidiary has also been an associated company of KPMG AG Wirtschaftsprüfungsgesellschaft in accordance with § 271 Section 2 of the German Commercial Code. The disclosure requirement of KPMG CIS relates to services rendered after 31 January 2010. € million 31/12/2010 31/12/2009 Audit 13 12 Other certification or evaluation 3 2 Tax consultation services 2 1 Other services 3 2 21 17 Only services that are consistent with the task of the auditor of the annual financial statements of METRO AG were provided. 52. Declaration of compliance with the German Corporate Governance Code The Management Board and the Supervisory Board of METRO AG in May and december 2010 made declarations of compliance with the recommendations of the Government Commission on the German Corporate Governance Code pursuant to § 161 of the German Stock Corporation Act, which can be accessed on the METRO AG website (www.metrogroup.de). 53. Election to be exempt from §§ 264 Section 3 and 264b of the German Commercial Code The following domestic subsidiaries in the legal form of stock corporations or partnerships will use the exemption requirements according to § 264 Section 3 and § 264b of the German Commercial Code, and will thus refrain from disclosing their annual financial statements for 2010 as well as mostly from disclosing their notes and management report (according to the German Commercial Code).
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