BMW 2014 Annual Report Download - page 193

193 STATEMENT ON CORPORATE GOVERNANCE
applicable to senior heads of departments. Retired Chair-
men of the Board of Management are entitled, like senior
heads of departments, to use a BMW Group vehicle as a
company car and, depending on availability and as part
of an offset arrangement, use the BMW chauffeur services.
Termination benefits on premature termination of board
activities, benefits paid by third parties
In conjunction with the amicable early termination of
Dr Reithofer’s Board of Management mandate with
effect from the end of the Annual General Meeting 2015,
the Company also reached agreement with Dr Reithofer
concerning the early termination of his service contract
with effect from the end of the Annual General Meeting
2015. The contract termination agreement envisages
calculation of variable cash remuneration for prorated
activities in the financial year 2015 on the basis of the
target attainment for the financial year 2013, entitling
Dr Reithofer to an amount of € 1.9 million, payable in
2015, i. e. in the period after he has left the Board of
Management. This arrangement ensures that – in the
event that Dr Reithofer is elected to the Supervisory
Board – he will not be involved in deciding on the level
of his own performance-related remuneration. As
settlement of the remuneration to which he is entitled
on the basis of the original term of his service con-
tract (i. e. up to 2016), the Company agreed to pay an
amount of € 2.5 million to Dr Reithofer in 2015. The
Company will make a final pension contribution of
€ 0.7 million on behalf of Dr Reithofer for the financial
year 2015.
After leaving the Board of Management on 9 December
2014, an agreement was reached with Dr Diess for the
early termination of his service contract with effect from
30 June 2015. The agreement envisages the continued
payment of fixed remuneration amounting to € 0.5 mil-
lion for the period from the termination of Dr Diess’
mandate to the expiry of the service contract. As
settle-
ment of the variable cash remuneration relating to
the remainder of the contractual period, a payment of
€ 0.6 million, payable in 2015, was also agreed. A per-
formance-related bonus is no longer payable for this
period. The Company will make a final pension
contri-
bution of € 0.4 million on behalf of Dr Diess for the finan-
cial
year 2014.
Apart from these, there are no contractual commitments
to pay compensation if a board member’s mandate is
terminated early. Similarly, there are no commitments
to pay compensation for early 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 2014 on account of their
activities as members of the Board of Management of
BMW AG.
Remuneration caps
The Supervisory Board has 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 compensation system and
compensation components.
Compensation of the Board of Management for the
financial year 2014 (2013) (total)
The total compensation of the current members of the
Board of Management of BMW AG for the financial year
2014 amounted to € 35.4 million (2013: € 34.5 million),
of which € 7.7 million (2013: € 7.9 million) relates to
fixed components (including other remuneration).
Variable components amounted to € 27.0 million (2013:
€ 25.9 million) and share-based remuneration compo-
nents to € 0.7 million (2013: € 0.7 million).
In addition, an expense of € 2.1 million (2013: € 2.2 mil-
lion) was recognised in the financial year 2014 for current
members of the Board of Management for the period af-
ter the end of their service relationship, which relates to
the expense for allocations to pension provisions.
The amount paid to former members of the Board of
Management and their dependants for the financial year
2014 was € 5.8 million (2013: € 4.7 million). The figure for
2014 includes continued payment of the fixed remunera-
tion of Dr Diess after leaving the Board of Management
amounting to € 0.1 million. Pension obligations to former
members of the Board of Management, including Dr
Diess, and their surviving dependants are fully covered
by pension provisions amounting to € 68.4 million (2013:
€ 58.0 million), computed in accordance with IAS 19.
in € million 2014 2013
Amount Proportion Amount Proportion
in % in %
Fixed compensation 7.7 21.8 7.9 22.9
Variable cash
compensation 27.0 76.3 25.9 75.1
Share-based compen-
sation component* 0.7 1.9 0.7 2.0
Total compensation 35.4 100.0 34.5 100.0
* 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.