BMW 2007 Annual Report Download - page 145

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84.1 %) for financial years in which the BMW Group
performs well. The measures used to determine the
variable component of compensation are the Group
net profit and the dividend level for the relevant
year, subject to specifically defined upper limits. As
a change from the previous arrangements, upper
limits were agreed with the members of the Board of
Management for the financial year 2007 based on
amounts actually paid in the previous year.
The compensation system does not include any
stock options, value appreciation rights comparable
to stock options or any other stock-based compen-
sation components. No compensation agreements
have been concluded with members of the Board
of Management for situations involving a take-over
offer. Similarly, they did not receive any payments or
benefits from third parties in 2007 on account of their
activities as the members of the Board of Manage-
ment.
Pension agreements are in place for the event of
the termination of a mandate.
Pensions are paid to former members of the
Board of Management who have either reached the
age of 65, or, if their mandate had terminated earlier
and had not been extended, to members who have
either reached the age of 60, or who are unable to
work due to ill-health or accident, or who have entered
into early retirement in accordance with a special
arrangement. The amount of the pension comprises
a basic monthly amount of euro 10,000 or euro
15,000 (Chairman of the Board of Management)
plus a fixed amount. The fixed amount is made up of
approximately euro 75 for each year of service in the
company before becoming a member of the Board
of Management plus between euro 154 and euro
400, or between euro 153 and euro 600 (Chairman
of the Board of Management), for each full year of
service on the board (up to a maximum of 15 years).
Pension payments are adjusted by analogy to the
rules applicable for the adjustment of civil servants’
pensions: the pensions of members of the Board
of Management are adjusted accordingly when the
civil servants’ remuneration level B6 (excluding allow-
ances)
is increased by more than 5 %.
If a mandate is ended early before the member
of the Board of Management reaches the age of 60,
a transitional payment amounting to two-thirds of
the pension theoretically earned up to the date when
a full pension can be drawn, may become payable if,
after a minimum of three years of service as a mem-
ber of the Board of Management, this is considered
appropriate on the basis of an objective evaluation
of all circumstances. Arrangements are in place con-
cerning the offsetting of other income against pen-
sions and transitional payments.
The amounts disclosed below as the annual
pension provision allocation for each member corre-
sponds to the pension service cost.
Members of the Board of Management holding
a BMW Bank GmbH credit card have a credit line of
up to euro 25,565. At the balance sheet date the
balances resulting from credit card usage were all
within the agreed limits.
Compensation of the Board of Management
for the financial year 2007 (total)
On the basis of the agreed upper limits, the total re-
muneration of the current members of the Board of
Management of BMW AG for the financial year 2007
amounted to euro 15.2 million (2006: euro 14.5 mil-
lion). This comprises fixed components (including
other remuneration) of euro 2.7 million (2006: euro
2.3 million) and variable components of euro 12.5 mil-
lion
(2006: euro 12.2 million).
In addition, an amount of euro 0.7 million (2006: euro
0.6 million) was incurred for current members of the
Board of Management after termination of their em-
ployment relationship. This relates to the expense for
allocations to pension provisions (service cost).
The amount paid to former members of the
Board of Management and their dependants was
euro 4.3 million (2006: euro 3.8 million). Pension ob-
ligations to former members of the Board of Manage-
ment and their dependants are fully covered by
pension provisions amounting to euro 38.3 million
(2006: euro 38.8 million), computed in accordance
with IAS 19.
1]
The Board of Management of BMW AG was increased in 2007 by two additional
members.
2] Calculation based on an agreed upper limit.
in euro million 20071] 2006
Amount Proportion Amount Proportion
Fixed remuneration 2.7 17.8 % 2.3 15.9 %
Variable remuneration 12.52] 82.2 % 12.2 84.1 %
Total
remuneration 15.2 100.0 % 14.5 100.0 %