Investor Relations

On Focus

Compensation system for the Board of Management

The Supervisory Board Personnel Committee reviews the compensation system for the Board of Management at regular intervals and draws up proposals for the Supervisory Board plenum. The Supervisory Board discusses the committee’s proposals in detail and passes its resolutions on that basis. Important criteria for determining the appropriateness of the compensation are the tasks of the Board of Management as a whole as well as of the respective member, the personal performance of the members of the Board of Management, the economic situation, and the company’s performance and outlook. In its decisions, the Supervisory Board also takes account of salary trends at comparable companies.

Total compensation expense paid to the members of the Board of Management of Dürr AG in 2012 was € 7,355 thousand (2011: € 4,560 thousand). € 836 thousand was paid as pensions to former members of the Board of Management (2011: € 928 thousand).

Compensation expense for the Board of Management 2012

	Non-performance- related		Performance- related		Compen-sation expense without pension benefits	Expen- ses for pension benefits²	Total expense³	Paid in 2012
€	Basic compen-sation	Other compen-sation¹	Long-term compen-sation expense (LTI)	Short-term (STI)	Compen-sation expense without pension benefits	Expen- ses for pension benefits²	Total expense³	Paid in 2012
Ralf W. Dieter	550,000.00	57,049.31	1,904,985.73	1,000,000.00	3,512,035.04	150,000.00	3,662,035.04	2,107,049.31
Ralph Heuwing	425,455.44	24,948.19	2,215,099.68	900,000.00	3,565,503.31	127,500.00	3,693,003.31	1,735,403.63
Total	975,455.44	81,997.50	4,120,085.41	1,900,000.00	7,077,538.35	277,500.00	7,355,038.35	3,842,452.94
¹Payment in kind, insurance contributions, etc.²Service cost recorded in 2012³Dürr has capped STI and LTI payments since 2010 in line with the German Act on the Appropriateness of Management Board Compensation (VorstAG ). Payments are capped at € 1.0 million (STI ) and € 1.5 million (LTI ) p.a. for Mr. Dieter, and at € 0.9 million (STI ) and € 1.5 million (LTI ) p.a. for Mr. Heuwing. The expense shown in the “long-term compensation expense (LTI )” column consists of the additions to the accrued liabilities for the current LTI tranches. In previous years, this expense was below the cap. For this reason, the accrued liabilities had to be increased as a result of the good earnings and share price development. The additions to the accrued LTI liabilities for Mr. Heuwing exceeded those for Mr. Dieter in 2012, as the accrued liabilities for Mr. Dieter in previous years had been higher.

Compensation expense for the Board of Management 2011

	Non-performance- related		Performance- related		Compen-sation expense without pension benefits	Expen- ses for pension benefits²	Total expense	Paid in 2011
€	Basic compen-sation	Other compen-sation¹	Long-term compen-sation expense (LTI)	Short-term (STI)	Compen-sation expense without pension benefits	Expen- ses for pension benefits²	Total expense	Paid in 2011
Ralf W. Dieter	500,000.00	49,968.28	862,706.77	938,965.50	2,351,640.55	105,000.00	2,456,640.55	1,594,968.28
Ralph Heuwing	375,000.00	23,144.26	741,207.82	881,034.50	2,020,386.58	82,500.00	2,102,886.58	1,373,144.26
Total	875,000.00	73,112.54	1,603,914.59	1,820,000.00	4,372,027.13	187,500.00	4,559,527.13	2,968,112.54

¹ Payment in kind, insurance contributions, etc.²Service cost recorded in 2011

The contracts of the members of the Board of Management have been adapted as from January 2010 to the requirements of the VorstAG – the German Act on the Appropriateness of Management Board Compensation – regarding a compensation structure that promotes sustainable and long-term company development. In addition to the fixed salary, there are now two performance-linked components: The short-term incentive (STI) scheme consists of an agreed proportion of the Group’s earnings before tax (EBT) in each fiscal year. The compensation payable under the long-term incentive (LTI) scheme is based on the performance of Dürr’s share price and the Group’s average EBIT margin for the three-year LTI period. For the rolling LTI scheme a certain number of virtual Dürr shares are issued every year, known as performance share units. In 2012, Ralf W. Dieter received 25,000 and Ralph Heuwing 21,500 performance share units (2011: 25,000 and 21,500). The amount payable at the end of the three-year LTI period is calculated by multiplying the number of performance share units by a share price multiplier and an EBIT multiplier. There are caps on the amounts payable under the STI and LTI incentives.

In addition, in directors and officers liability insurance a deductible complying with the statutory requirements has been introduced.

The Supervisory Board can agree targets with the members of the Board of Management for the further strategic development of the company and pay an additional bonus if these have been successfully implemented. A special bonus may also be paid to a member of the Board of Management for exceptional performance and successful achievements.

A further component of the compensation is the employer-financed pension contribution, which is paid into our “VORaB” scheme (“Vorsorge aus Bruttogehalt”). VORaB is a defined benefit company pension plan in the form of deferred compensation guaranteed through a reinsurance scheme. In addition, both members of the Board of Management are covered by accident and term life insurance policies.