THE NATURE OF OUR BUSINESS – STABLE GROWTH - Symrise

ability of achieving these targets was made based on a “Black-
Scholes” formula using a share price of € 9.50 and an anticipated
volatility of 43.5%. A dividend yield is not factored into the required
performance of the share component.
The “Symrise Value Added” is a value-oriented assessment basis
which is calculated independently from the share price and which
comprises an absolute earnings value less an interest yield on capital
employed. The cumulative target value for the three year period
of the plan is € 233.8 million.
The legally binding specifications for the long-term incentive program
are defined in the “Legal Terms and Conditions for Tranche
2008,” which was also approved by the Supervisory Board.
No other members of senior management have been included in
the program.
Strategic Share Bonus
With effect from January 1, 2008, the Executive Board launched a
global share-based bonus program for a total of 24 strategically
important employees and senior managers for the first time. For
all 24 of these employees, a monetary bonus has been defined.
55,905 virtual shares were “issued” based on a share price of €
20.39.
The cash payment is to be made at the end of a term of two years
(term to the end of 2009) based on the quoted average share price
for the last 20 trading days on the stock exchange. Thus, the bonus
is tied to the development of the share price. The fair value was
calculated at T€ 466 based on the closing share price of € 9.50 at
the balance sheet reporting date.
Any dividends were not considered in determining the fair value.
In order to retain the commitment of the strategically important
employees to the organization if the share price falls, a virtual
hedge was fixed for 50% of the share price relevant for bonus purposes.
Furthermore, to exclude non-performance-related share
price impacts, a maximum share price was fixed as being 200% of
the share price relevant for bonus purposes.
6.4. Selling and Marketing Expenses
In addition to the costs of the marketing departments and the field
sales forces, selling and marketing expenses include costs for advertising,
logistics and commissions.
6.5. Research and Development Costs
In addition to the costs of research departments, this item also includes
costs for external services and costs related to trials.
Activities in this area include basic research as well as development
of products to generate sales revenues and also development
of new or improved processes to reduce the cost of sales.
Information regarding allocation of research and development cost
by geographical region is available under the segment reporting
disclosures in note 5 above.
6.6. Administration Expenses
Administration expenses are made up as follows:
T€
Information technology
Finance and financial controlling
Human resources
Other administration expenses
Subtotal
Performance-related remuneration
Total
2007
-22,515
-18,830
-9,653
-25,044
-76,042
-1,978
-78,020
2008
-21,291
-19,465
-9,362
-23,699
-73,817
-338
-74,155
6.7.Other Operating Expenses
The increase in costs is mainly due to higher outlays for other external
services.
118 Annual Report 2008 Symrise AG