Audi 2014 Annual Report Download - page 208

CORPORATE GOVERNANCE REPORT
REMUNERATION REPORT
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REMUNERATION REPORT
/ SYSTEM OF REMUNERATION FOR THE SUPERVISORY
BOARD AND BOARD OF MANAGEMENT
The remuneration report contains a description of the principles
used by Audi to set the fixed and variable remuneration paid to
the Board of Management and Supervisory Board. Also included
is information on the pension arrangements for members of the
Board of Management. Additionally, the remuneration report
includes details of the remuneration paid to members of the
Supervisory Board of AUDI AG, broken down by individual mem-
ber and by component. Disclosure has not been made of the
remuneration paid to each individual member of the Board of
Management, by name, pursuant to Section 314, Para. 1, No. 6a)
of the German Commercial Code (HGB), as the 2011 Annual
General Meeting adopted a corresponding resolution valid for a
period of five years. The members of the Board of Management
and details of their seats on other supervisory boards and regu-
latory bodies – as defined in Section 285, No. 10 of the German
Commercial Code (HGB) and Section 125, Para. 1, Sentence 5 of
the German Stock Corporation Act (AktG) – are listed in the
Corporate Governance Report.
/ BASIC FEATURES AND DEVELOPMENT OF
REMUNERATION PAID TO THE BOARD OF
MANAGEMENT
The remuneration paid to active Board of Management mem-
bers, in keeping with the German Act on the Appropriateness
of Management Board Remuneration (VorstAG; Section 87,
Para. 1 of the German Stock Corporation Act [AktG]), is geared
towards the sustainable development of the Company.
The 121st Annual General Meeting of AUDI AG, held on May 20,
2010, approved the system of remuneration for members of
the Board of Management with a majority of 99.70 percent of
the votes cast.
Overall, the remuneration structure for the Board of Manage-
ment does not yet involve any pay caps, either overall or with
regard to the variable components.
The aim is for the level of remuneration to be appropriate
and attractive by national and international comparisons.
The relevant criteria include the remit of the individual Board
member, the member’s personal performance, the Company’s
economic situation, performance and future prospects, and
also the standard nature of the remuneration taking account
of competitors on the market and the pay structure other-
wise in place at Audi. Regular comparisons of remuneration
levels are carried out in this regard.
// COMPONENTS OF THE REMUNERATION PAID TO
THE BOARD OF MANAGEMENT
The remuneration paid to the Board of Management is struc-
tured in such a way as to promote a form of management that
is conducive to the long-term development of the Audi Group.
Consequently, the remuneration comprises both fixed and
variable components. The fixed components guarantee basic
remuneration that enables the individual members of the
Board of Management to execute their duties conscientiously
and in the best interests of the Company, without becoming
dependent upon achieving short-term targets. At the same
time, variable components – based, for example, on the Com-
pany’s economic success – act as a long-term incentive.
The remuneration paid to members of the Board of Manage-
ment for the 2014 fiscal year was EUR 24,908 (23,445) thou-
sand, of which EUR 4,939 (5,051) thousand related to fixed
remuneration components and EUR 19,969 (18,394) thousand
to variable components.
/// FIXED REMUNERATION
The fixed remuneration for members of the Board of Man-
agement of AUDI AG totaled EUR 4,939 (5,051) thousand
during the past fiscal year. Alongside basic remuneration,
paid monthly in the form of a salary, this also includes other
benefits such as remuneration for appointments at Audi
Group companies, the covering of costs/monetary benefit
associated with remuneration in kind and fringe benefits, the
provision of a company car and payment of insurance premi-
ums. Taxes applicable to benefits in kind are paid by AUDI AG
in accordance with Company guidelines.
The basic remuneration is reviewed regularly and adjusted as
necessary.
/// VARIABLE REMUNERATION
Variable remuneration components paid to members of the
Board of Management during the 2014 fiscal year totaled
EUR 19,969 (18,394) thousand. The variable benefits paid to
the Board of Management consist of a bonus, based on the
business performance in the year under review and in the
previous year, and, since 2010, have also included a Long Term
Incentive (LTI), which is based on performance in the year
under review and over the previous three fiscal years. Both
components of variable remuneration are calculated using a
measurement basis spanning several years and take account of
both positive and negative developments. If extraordinary
factors arise, the Supervisory Board may decide to impose a
cap on remuneration components. In the year under review,