BMW 2008 Annual Report Download - page 141

142
134 Corporate Governance
134 Members of the Supervisory Board
137
Members of the Board of
Management
138 Corporate Governance in the
BMW
Group
140 Compliance in the BMW Group
141 Compensation Report
147 Declaration of the Board of
Management and of the Supervisory
Board pursuant to § 161 AktG
an incentive for exceptional individual performance, linked
to the performance of the BMW Group. The structure of
the compensation of the Board of Management should
also contain parallels to the compensation system applied
to employees and senior management.
Components of compensation
The compensation of the Board of Management comprises
fixed and variable components. In addition, benefits are
also payable at the end of members’ mandates, primarily in
the form of pension benefits. For the purposes of deter-
mining the overall compensation of the Board of Manage-
ment, the Personnel Committee, having considered the
overall position and forecasts of the BMW Group, decides
on an overall remuneration framework, which will include a
high variable proportion.
The Personnel Committee reviews the compensation
system at regular intervals, with regard to the structure
and amount of the remuneration of the Board of
Manage-
ment. Fixed remuneration comprises a base remunera-
tion
amount, which is paid as monthly salary, and other
remuneration elements. Other remuneration elements
comprise mainly the use of company cars as well as the
payment of insurance premiums, contributions towards
relocation costs and security systems.
The measures used to determine the variable component
of compensation are the BMW Group’s net profit and the
dividend level for the relevant year, the return on sales and
the individual performance of the Board of Management
members as evaluated by the Personnel Committee of the
Supervisory Board. Upper limits are in place for all Board
of Management members.
The compensation system does not include any stock
options, value appreciation rights comparable to stock op-
tions, other share-based compensation components or
other long-term incentives. No compensation agreements
were concluded with members of the Board of Manage-
ment for situations involving a takeover offer. Similarly, they
did not receive any payments or benefits from third parties
in  on account of their activities as the members of the
Board of Management.
Pension agreements are in place for the event of the
ter-
mination of a mandate. Pensions are paid to former
members of the Board of Management who have either
reached the age of , or, if their mandate had terminated
earlier and had not been extended, to members who have
either reached the age of , 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, unchanged from the
previous year, a basic monthly amount of euro , or
euro , (Chairman of the Board of Management) plus a
fixed amount. The fixed
amount is made up of approximate-
ly euro  for each year
of service in the company before
becoming a member of the Board of Management plus
between euro  and euro , for each full year of service
on the board (up to a maximum of  years). Pension pay-
ments 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 B
(excluding
allowances) is increased by more than  .
If a mandate is ended early before the member of the Board
of Management reaches the age of , a transitional pay-
ment 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 member of the Board of Management, this is
considered appropriate on the basis of an objective evalu-
ation of all circumstances. Arrangements are in place con-
cerning the offsetting of other income against pensions
and transitional payments.
No performance-based or compensatory payments have
been agreed for the event of the termination of members’
mandates.
The amounts disclosed below as the annual pension pro-
vision allocation for each member corresponds to the
pension service cost.
Members of the Board of Management holding a credit card
issued by BMW Bank GmbH, Munich, during the financial
year  had a credit line of up to euro , (: euro
,). The amounts arising from credit card usage were
all within the agreed limits.
Compensation of the Board of Management for the
financial year  (total)
The total remuneration of the current members of the Board
of Management of BMW AG for the financial year 
amounted to euro . million (: euro . million). This
comprises fixed components (including other remunera-
tion) of euro . million (: euro . million) and variable
components of euro . million (: euro . million).
in euro million 2008 2007
Amount Proportion Amount Proportion
in % in %
Fixed remuneration 3.1 28.4 2.7 17.8
Variable remuneration 7.8 71.6 12.5
* 82.2
Total remuneration 10.9 100.0 15.2 100.0
* calculated on the basis of an agreed upper limit.