the new law. According to the new provisions, total compensation for members of the Executive Board is set by the Supervisory Board. The compensation system for the Executive Board is also decided and regularly reviewed by the Supervisory Board. The Supervisory Board’s Human Resources Committee prepares the relevant motions for resolution by the full Supervisory Board.
Executive Board member compensation comprises a fixed salary supplemented by variable, performancelinked components. The fixed component constitutes basic compensation not linked to performance and is paid as a monthly salary; Executive Board members additionally receive supplementary compensation in the form of non-cash benefits. Non-cash benefits mostly comprise amounts to be recognized for tax purposes for private use of company cars, accident insurance and other non-cash benefits.
The value of performance-linked compensation depends on consolidated profit and the personal performance of the Executive Board members themselves.
In the event of full compliance with the targets, the total cash compensation comprises around 50 percent fixed and 50 percent performance-linked components. The performance-linked compensation consists of the Company bonus (60 percent) and an individual bonus (40 percent)—assuming full compliance with targets.
Executive Board compensation also includes pension awards, other awards in the event of termination of office, and participation in the Group’s variable compensation arrangements combining long-term incentives with an element of risk.
Executive Board compensation for past fiscal years
Amounts paid in 2009 for offices held within the Group comprised EUR 35,000 in fixed compensation to Dr. Noé and EUR 702,000 in additional performance-linked compensation paid retroactively for FY 2008 (EUR 314,000 to Dr. Lütkestratkötter, EUR 52,000 to Mr. Ehlers, EUR 126,000 to Dr. Lohr, EUR 126,000 to Dr. Noé and EUR 84,000 to Dr. Rohr).
Variable pay components combining a long-term incentive effect with an element of risk
Executive Board compensation also includes participation in the Company’s long-term incentive plans (LTIPs). These comprise grants of stock appreciation rights (SARs) and stock awards (phantom stock).
If the applicable exercise targets are met after a twoyear waiting period, the stock appreciation rights grant the Executive Board members a monetary claim against the Company, which they can exercise over the then following three years. The amount of the claim depends on the development of the share price within the waiting and exercise periods. In addition, relative and absolute performance targets, which cannot be modified retroactively, have to be met.
The terms of stock awards provide that after the threeyear waiting period, those entitled have, for each stock award and for a further two-year exercise period, a monetary claim against the Company equal to the closing price of HOCHTIEF stock on the last day of stock market trading prior to the exercise date.
The value of all entitlements under long-term incentive plans is capped so that the amount of compensation stays appropriate in the event of extraordinary, unforeseeable developments. In fiscal 2009, the stock awards under LTIP 2006 were exercised in full by all members of the Executive Board. The sums paid out amounted to EUR 2,156,000 (EUR 547,000 to Dr. Lütkestratkötter, EUR 552,000 to Mr. Ehlers, EUR 267,000 to Dr. Lohr, EUR 265,000 to Dr. Noé and EUR 525,000 to Dr. Rohr). An additional EUR 102,000 in stock appreciation rights under LTIP 2007 were exercised by Dr. Lohr.