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Remuneration

Remuneration of the Executive Board

The remuneration of the members of the Executive Board is determined by their tasks and their own individual performance as well as by the success of the company. The amount of remuneration is based overall on the level customary in the comparable business environment.

Under the remuneration system valid in 2018, remuneration consisted of the following components: an annual fixed basic salary (to be paid out in equal monthly installments), supplementary benefits (consisting mainly of making a company car available for private use), variable annual remuneration, and a pension commitment. Variable remuneration depends partly on the personal performance of the individual Board member in the respective financial year and partly on the success of the company, measured by the return on capital employed (ROCE) calculated as an average of the past five years. The multi-year assessment basis has an incentive effect that promotes the sustainable development of the company. The two components of the variable remuneration are capped.

The amount of pension commitment depends on the length of service to the Group and is a maximum 60 % of the fixed salary. The variable remuneration components are not relevant for pension commitments. Pension entitlement is valid when an Executive Board member reaches the age of 65. If Prof. Dr.-Ing. Fuhrmann retires from the company at its request after having reached the age of 59 or at his own wish at the age of 61, he will be deemed eligible for payments as if he had already reached the age of 65. In the event that the company does not offer Mr. Becker a further term of office when his employment contracts expires, upon reaching the age of 61 he will be deemed eligible for payments as if he had reached the age of 65. In the event of premature termination of Executive Board member activities due to a change of control, the Board members are entitled to settlement in the amount of overall remuneration for the remaining term of their contracts of employment. This settlement is, however, capped to the value of three years of remuneration. Should Executive Board activities be terminated without an important reason, the Executive Board members are entitled to the remuneration agreed until expiry of the contract. However, this entitlement is restricted to the amount of two years’ remuneration (fixed and variable components). No benefits were granted or pledged by external parties to the individual members of the Executive Board in the financial year 2018 or in 2017 for their activities as Executive Board members.

In 2018, the Supervisory Board approved a restructuring of Executive Board remuneration that is to apply to future Executive Board member employment contracts. This new structure reflects the most recent recommendations of the German Corporate Governance Code under which variable components should fundamentally be calculated on a multi-year basis that is essentially forward looking. Accordingly members of the Executive Board will continue to receive an annual fixed basic salary in case of new contracts (to be paid out in equal monthly installments), supplementary benefits (consisting mainly of making a company car available for private use), variable annual remuneration, and a pension commitment. Variable remuneration, however, in the future will consist, on the one hand, of an annual bonus, 70 % of which depends on earnings before taxes (EBT) and 30 % depending on the degree to which targets set individually by the Supervisory Board are achieved; half of the bonus is only paid out after three years depending on how the share price of the Salzgitter share has performed in the respective period. On the other, additional remuneration is paid out each year, with 70 % depending on the Group’s return on capital employed (ROCE) over the next four years respectively and 30 % on the degree to which the stakeholder targets determined by the Supervisory Board are achieved within the next four years respectively (performance cash award).

In respect of the pension scheme (pension commitment), a commitment for a pension benefit in a certain amount will no longer be made for the Executive Board members in the future (defined benefit obligation). Instead, a certain amount will be made available for each year of service as a member of the Executive Board (defined contribution commitment).

Remuneration received by the individual members of the Executive Board (benefits accorded for the year)

Prof. Dr.-Ing.
Heinz Jörg Fuhrmann
CEO
Burkhard Becker
CFO
in k€ 2017 2018 2018 (min.) 2018 (max.) 2017 2018 2018 (min.) 2018 (max.)
Fixed remuneration 1,050 1,140 1,140 1,140 555 600 600 600
Benefits 17 17 17 17 25 25 25 25
Total 1,067 1,157 1,157 1,157 580 625 625 625
One-year variable remuneration1)2) 740 830 0 665 400 450 0 350
Multi-year variable remuneration 0 0 0 950 0 0 0 500
Total1) 1,807 2,083 1,157 2,772 980 1,075 625 1,475
Pension expenses3) 358 375 375 375 185 196 196 196
Total remuneration1) 2,165 2,458 1,532 3,147 1,165 1,271 821 1,671
Michael Kieckbusch
Personnel
in k€ 2017 2018 2018 (min.) 2018 (max.)
Fixed remuneration 555 600 600 600
Benefits 42 46 46 46
Total 597 646 646 646
One-year variable remuneration1)2) 400 450 0 350
Multi-year variable remuneration 0 0 0 500
Total1) 997 1,096 646 1,496
Pension expenses3) 237 252 252 252
Total remuneration1) 1,234 1,348 898 1,748

Remuneration received by the individual members of the Executive Board members (income for the year)

Prof. Dr.-Ing.
Heinz Jörg Fuhrmann
CEO
Burkhard Becker
CFO
Michael Kieckbusch
Personnel
in k€ 2017 2018 2017 2018 2017 2018
Fixed remuneration 1,050 1,140 555 600 555 600
Benefits 17 17 25 25 42 46
Total 1,067 1,157 580 625 597 646
One-year variable remuneration1)2) 740 830 400 450 400 450
Multi-year variable remuneration 0 0 0 0 0 0
Total1) 1,807 2,083 980 1,075 997 1,096
Pension expenses3) 358 375 185 196 237 252
Total remuneration1) 2,165 2,458 1,165 1,271 1,234 1,348

Overall remuneration received by the active members of the Executive Board for their activities in the financial year 2018 amounted to k€ 5,177 in total (previous year: k€ 4,564).

Pensions

Annual payment Allocation to
pension provision
Present value
of the obligation
In € upon pension eligibility according to HGB according to IFRS according to HGB according to IFRS
Prof. Dr.-Ing.
Heinz Jörg Fuhrmann
Chairman
2018
2017
684.0002)
612,000
3,124,920
962,258
2,314,629
1,068,317
12,460,885
9,335,965
15,837,507
13,522,878
Burkhard Becker
 
2018
2017
345.6003)
324,000
1,145,766
476,480
617,131
568,755
5,424,151
4,278,385
7,197,547
6,580,416
Michael Kieckbusch
 
2018
2017
331.2004)
324,000
903,694
464,420
376,695
595,113
4,547,268
3,643,574
6,194,326
5,817,631
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