BMW 2013 Annual Report Download - page 189

189 STATEMENT ON CORPORATE GOVERNANCE
en titlement. In addition, certain circumstances have
been specified, in the event of which the Company no
longer
has any obligation to pay benefits. In such
cases, no
transitional payments will be made, either.
Board of Management members who retire immediately
after their service on the board and who draw a
retire-
ment pension are entitled to purchase vehicles and
other services of the BMW Group at conditions that also
apply in each relevant case for pensioners and to lease
BMW Group vehicles in accordance with the guidelines
applicable to senior heads of departments.
Termination benefits on premature termination of
board activities, benefits paid by third parties
In connection with the premature termination of
Mr Arndt’s activities on the Board of Management with
effect from 31 March 2013 due to health reasons, it
was
decided to continue his contract of employment
through to its scheduled end on 31 August 2014 and to
honour all fixed remuneration components, i. e. basic
remuneration of € 900,000 p. a. on a pro rata basis and
other fixed remuneration elements contained in the
contract of employment, including company car usage
and pension contributions, also on a pro rata basis.
Accordingly, for the period from April to December
2013,
Mr Arndt received pro rata basic remuneration
of € 675,000 and other remuneration amounting to
€ 24,197. No entitlement to variable remuneration arose
for the period between the premature termination of
board mandate and contract expiry. This does not apply,
however, to entitlements already earned in relation to
the matching component payable in conjunction with
the share-based remuneration scheme (subject to ful-
filment of the stipulated holding period requirement).
In view of the agreed curtailment of contractual retire-
ment benefits, and in settlement of all other
contrac-
tual entitlements arising from Mr Arndt’s service
contract, the Company gave a commitment to make a
one-off payment of € 800,000 on contract expiry in 2014.
Apart from this, there are no contractual commitments
to pay compensation if a board member’s mandate is
terminated prematurely. Similarly, there are no commit-
ments to pay compensation for premature termination
in the event of a change of control or a takeover offer.
No members of the Board of Management received any
payments or benefits from third parties in 2013 on
account of their activities as members of the Board of
Management of BMW AG.
Remuneration caps
In 2013, and with effect for financial years beginning
after 1 January 2014, the Supervisory Board stipulated
caps for all variable remuneration components and for
the remuneration of Board of Management members
in total. The caps are shown in the overview of the com-
pensation system and compensation components.
Compensation of the Board of Management for the
financial year 2013 (2012) (total)
The total compensation of the current members of the
Board of Management of BMW AG for the financial year
2013 amounted to € 34.5 million (2012: € 31.4 million),
of which € 7.9 million (2012: € 7.5 million) relates to fixed
components (including other remuneration). Variable
components amounted to € 25.9 million (2012: € 23.2 mil-
lion)
and share-based remuneration components to
€ 0.7 million (2012: € 0.7 million).
In addition, an expense of € 4.3 million (2012: € 1.2 mil-
lion)
was recognised in the financial year 2013 for cur-
rent members of the Board of Management, including
Mr Arndt, for the period after the end of their service
relationship. This relates to the expense for allocations
to pension provisions and for benefits relating to the ter-
mination of activity of a Board of Management member.
The amount paid to former members of the Board
of Management and their dependants for the financial
year 2013 was € 4.7 million (2012: € 3.8 million). The
figure for 2013 includes continued payment of the fixed
remuneration of
Mr Arndt after leaving the Board of
Management amounting to € 699,197. Pension obliga-
tions
to former members of the Board of Management,
including
Mr Arndt, and their surviving dependants
are fully covered by pension provisions amounting to
€ 58.0 million (2012: € 61.2 million), computed in accord-
ance with IAS 19.
in € million 2013 2012
Amount Proportion Amount Proportion
in % in %
Fixed compensation 7.9 22.9 7.5 23.9
Variable cash
compensation 25.9 75.1 23.2 73.9
Share-based compen-
sation component* 0.7 2.0 0.7 2.2
Total compensation 34.5 100.0 31.4 100.0
* Matching component; provisional number or provisional monetary value calculated at
grant date (date on which the entitlement became binding in law). The final number
of matching shares is determined in each case when the requirement to invest in
BMW AG common stock has been fulfilled.