Audi 2015 Annual Report Download - page 208

CORPORATE GOVERNANCE REPORT
REMUNERATION REPORT
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/// VARIABLE REMUNERATION
Variable remuneration components paid to members of the
Board of Management during the 2015 fiscal year totaled
EUR 15,388 (19,969) 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,
bonus payments totaled EUR 10,293 (14,452) thousand, with
the LTI reaching EUR 5,095 (5,517) thousand.
//// BONUS SYSTEM
The bonus system is designed to reward positive performance
of the Audi Group. Basically, the level of the bonus is based on
the results achieved, on the Company’s economic situation and
on the personal performance of the individual member of the
Board of Management. The operating profit, in the form of a
two-year average, is used as the calculation basis. The system
is regularly reviewed by the Supervisory Board and adjusted
where necessary.
//// LONG TERM INCENTIVE (LTI)
For Audi, as a Volkswagen Group brand, the amount of the
Long Term Incentive (LTI) essentially depends on the extent to
which targets included in the Volkswagen Group’s Strategy
2018 are achieved. The targets are as follows:
>Leader in customer satisfaction, measured using the
customer satisfaction index,
>Leading employer, measured using the employee index,
>Rise in sales, measured using the growth index, and
>Rise in return, measured using the return index.
The customer satisfaction index is based on indicators of cus-
tomers’ overall satisfaction with the dealers supplying the
products, with new vehicles and with service performance,
based on the most recent workshop visit in each case. The
employee index is calculated on the basis of such indicators as
“employment” and “productivity”, as well as participation
levels and results from employee surveys.
The growth index is calculated from the indicators “deliveries
to customers” and “market share.”
The return index is determined from the development in the
return on sales and the dividend per ordinary share.
The calculated indices for customer satisfaction, employees
and the sales situation are added together and the total is
then multiplied by the return index. This method ensures that
the LTI is only paid out if the Volkswagen Group as a whole has
been financially successful. If the return on sales does not
exceed a threshold of 1.5 percent, the return index will equal
zero. Consequently, the overall index for the fiscal year in
question will then also be zero.
// BENEFITS PAID UPON REGULAR TERMINATION
OF ACTIVITY
Upon the regular termination of their activity, members of the
Board of Management of AUDI AG are entitled to retirement
pay and, for as long as this payment is made, to the use of
company cars in return for payment of a fixed charge. The
agreed benefits are paid out from the age of 63. This age limit
is gradually being increased to 65.
Retirement pay is a maximum of 50 percent of the last month-
ly salary.
Surviving dependents receive a widow’s or orphan’s pension.
The widow’s pension is a maximum of 60 percent of retirement
pay, the full orphan’s pension 30 percent and the half orphan’s
pension 15 percent. For all full orphans or half orphans com-
bined, the pension is no more than 60 percent of retirement
pay. A full or half orphan’s pension is paid up to no later than
the age of 25.