Engineering
Engineering
Engineering
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To our shareholders<br />
1.3 To our shareholders Corporate governance report<br />
www.thyssenkrupp.com<br />
Page 120<br />
Executive Board member contracts at<br />
at ThyssenKrupp do do not not contain a a<br />
change-of-control clause.<br />
32 | 33<br />
the financial-statement auditors, KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, that the chairman of the<br />
Audit Committee would be informed immediately of any possible grounds for exclusion or bias arising during<br />
the audit insofar as they are not immediately eliminated, and that the auditors would report immediately on<br />
any findings or occurrences during the audit which have a significant bearing on the duties of the<br />
Supervisory Board. It was also agreed that the auditors would inform the Supervisory Board or make a note<br />
in the audit report of any facts ascertained during their examination that conflict with the Declaration of<br />
Conformity issued.<br />
Corporate governance declaration<br />
The corporate governance declaration in accordance with § 289a German GAAP (HGB) is presented on<br />
our website at www.thyssenkrupp.com/en/investor/unternehmensfuehrung.html. It contains a description of<br />
how the Executive Board and Supervisory Board operate, the declaration of conformity in accordance with<br />
§ 161 Stock Corporation Act (AktG), and details of key governance practices.<br />
Compensation report<br />
The following compensation report forms part of the management report.<br />
Performance-based compensation for the Executive Board<br />
According to the Act on the Appropriateness of Management Board Remuneration (VorstAG) and a<br />
corresponding provision in the rules of procedure for the Supervisory Board, the full Supervisory Board is<br />
responsible for determining individual Executive Board compensation following preparation by the Personnel<br />
Committee. The compensation system was approved by the Annual General Meeting on January 21, 2011<br />
with a majority of 94.91% of the capital represented.<br />
The compensation for the Executive Board members comprises non-performance-related and performancerelated<br />
components. The non-performance-related components are the fixed compensation, additional<br />
benefits and pension plans, while the performance-related components are the performance bonus and the<br />
LTI as a component with a long-term incentive effect. On top of this there is an additional bonus<br />
representing a cash flow-based management incentive, on the award of which the Supervisory Board makes<br />
a new decision each year.<br />
Criteria for the appropriateness of Executive Board compensation include the duties of the individual<br />
Executive Board members, their personal performance, the business situation, the success and prospects of<br />
the Company and also the prevailing level of compensation at peer companies and the compensation<br />
structure applying in the Company. The performance-related components contain elements that are<br />
measured over several years. They therefore set long-term incentives and focus the compensation structure<br />
on the sustainable development of the Company.<br />
Executive Board member contracts concluded since the start of fiscal year 2008/2009 provide for a<br />
severance payment in the event of early termination without cause. The severance payment is limited to a<br />
maximum of two years’ compensation including benefits (severance payment cap) and compensates no<br />
more than the remaining term of the employment agreement. A promise of payments in the event of early<br />
termination due to a change of control does not exist.