pdf (2.5 MB) - METRO Group

METRO GROUP : ANNUAL REPORT 2010 : BUSINESS
→ GROUP MANAGEMENT REPORT : 8. REMUNERATION REPORT
8. Remuneration report
The following report describes the remuneration received
by the Management Board and the Supervisory Board of
METRO AG for the financial year 2010 paid in accordance to
standards laid down by the German Commercial Code
(handelsgesetzbuch). It is also a remuneration report in
terms of the German Corporate Governance Code and outlines
the system of Management Board compensation and
its further modification. Furthermore, the remuneration
report contains information about share-based compensation
for executives of METRO GROUP.
The remuneration system for members of the
Management Board
The remuneration system for the Management Board has
been approved by the Supervisory Board of METRO AG. The
Supervisory Board was advised in this matter by its Personnel
Committee.
Management Board remuneration consists of a fixed salary
and two variable components: performance-based compensation
(short-term incentive) and a long-term incentive. The
Company also offers pension provisions and supplemental
benefits. Total remuneration and the individual compensation
components are geared appropriately to the responsibilities of
each individual member of the Board, his or her personal performance
and the Company’s economic situation, and fulfil
legal stipulations regarding customary remuneration. The
incentives serve as an inducement for the Management Board
to increase the Company’s value. They are designed to generate
sustainable company growth and are in line with the recommendations
of the German Corporate Governance Code.
Fixed salary
The fixed salary is contractually set and is paid in twelve
monthly instalments.
Performance-based compensation (short-term incentive)
The short-term incentive for members of the Management
Board is determined mainly by the development of return on
capital employed (RoCE) and net earnings. The use of the key
ratio net earnings in combination with RoCE rewards profitable
growth of METRO GROUP. Net earnings principally
amount to profit for the period. The Supervisory Board may
resolve an adjustment for special items.
→ p. 110
The members of the Management Board receive €1,400
(€2,100 for the Board Chairman) per 0.01 percentage point
of RoCE above a minimum value of 7 percent. For each
€1 million in net earnings, they receive €850 (€1,275 for the
Board Chairman). The amounts are set by the Supervisory
Board based on the Company’s strategy and medium term
targets, are regularly reviewed and are adjusted if necessary.
The payout of the performance-based compensation
granted for RoCE and net earnings is capped each year at
€3.9 million for the Board Chairman and at €2.6 million for
the other members of the Management Board.
The short-term incentive for Mr Saveuse is also tied to the
business targets of the Real sales division. For compensation
applying to 2010, the Supervisory Board of METRO AG
has set a target value for EBITaC (EBIT after Cost of Capital)
at the Real Group. An EBITaC factor will be determined from
the degree of target attainment, and this factor will be multiplied
by the agreed-upon base bonus. The EBITaC-based
remuneration for Mr Saveuse has been contractually capped
at €2.7 million per year. The annual payout of the base bonus
(€900,000) is guaranteed. Payouts of the short-term incentivederivedfromnetearningsandtheRoCEofMETRO
GROUP
are credited against the performance-based compensation
of Mr Saveuse paid in accordance with the EBITaC of the
Real Group.
The performance-based compensation of all members of
the Management Board will be paid out in the following
financial year following the approval of the annual financial
statements.
Share-based compensation (long-term incentive)
The long-term incentive is a compensation component with
long-term incentive effect. It is designed to achieve sustainable
growth in the Company’s value.
Share bonus programme 2004–2008
In 2004, METRO AG introduced a share bonus programme.
Its final tranche was paid in 2008. The programme was
based on cash bonuses whose size depended on the performance
of the Metro share price in parallel consideration
of benchmark indices. The programme is divided into a
tranche for each year, to which various target parameters
apply. The full bonus was paid when the share price reached
the respective target price and so-called equal performance
compared to the benchmark indices. The maturity of each
tranche was three years. The payout of share bonuses can