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DES - Online Annual Report 2009

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Remuneration

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Remuneration

Remuneration system for the Executive Board

Remuneration for the Executive Board is set by the Executive Committee of the Supervisory Board. The remuneration system provides for a fixed basic annual remuneration component based on the individual Executive Board member’s duties and a variable remuneration component. This remuneration component is paid annually and is based on personal performance and the performance of the Executive Board as a whole, as well as the Company’s economic situation, success and future prospects, and takes account of the comparative environment. The variable remuneration is paid after the Supervisory Board approves the consolidated financial statements. There are no share option plans or similar securities-based incentive systems.

In the event that the Company does not wish to renew the existing contracts of the members of the Executive Board upon their expiration, Claus-Matthias Böge would receive a one-time severance payment of €150,000 and Olaf Borkers would receive three months’ salary.

The remuneration rules have been reviewed with respect to the Gesetz zur Angemessenheit der Vorstandsvergütung (VorstAG – German Act on the Appropriateness of Executive Board Remuneration) enacted in 2009 and current changes to the Corporate Governance Code. Adjustments to the current rules will be implemented during financial year 2010. For further details, please refer to the supplementary disclosures on remuneration in the notes.

Remuneration system for the Supervisory Board

The remuneration of the Supervisory Board is based on section 8 (4) of the Articles of Association of Deutsche EuroShop AG. In accordance with the Articles of Association, the remuneration amounts to €50,000 for the chairman, €37,500 for the deputy chairman and €25,000 for each of the other members of the Supervisory Board. Committee membership is not additionally taken into account when determining the remuneration of the Supervisory Board. Moreover, the remuneration does not contain any performance-based elements. The remuneration is determined on the basis of the business model and size of the Company and the responsibility associated with the role. The Company’s financial position is also taken into consideration. If a member of the Supervisory Board should leave the Supervisory Board during the financial year, the member shall receive their remuneration pro rata. Cash expenses are also reimbursed in accordance with section 8 (5) of the Articles of Association.

Miscellaneous

Members of the Executive and Supervisory Boards do not receive loans from the Company.

No pensions are paid to former members of the Executive or Supervisory Boards or to their dependents.

Compensation agreements concluded by Deutsche EuroShop AG with Executive Board members or employees of the Company for the event of a change of control

A change-of-control arrangement has been agreed with two employees. Under this arrangement, if and insofar as the Company informs them that they will no longer be employed in their current positions, these employees will have a special right of termination with a notice period of one month up to the end of the quarter, which will be valid for twelve months from the date the change of control takes effect.

A change of control arises if Deutsche EuroShop AG merges with another company, if a public takeover bid has been made under the Deutsches Wertpapiererwerbs- und Übernahmegesetz (WpÜG – German Securities Acquisition and Takeover Act) and accepted by a majority of shareholders, if the Company is integrated into a new group of companies or if the Company goes private and is delisted.

In the event of the termination of the employment relationship, these employees will receive a one-time payment amounting to three months’ gross salary multiplied by the number of years that they have worked for the Company, but limited to a maximum of 24 months’ gross salary.

The Deutsche EuroShop Group does not currently have any other compensation agreements with members of the Executive Board or other employees for the event of a change of control.

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