Mercedes 2004 Annual Report Download - page 143

A summary of the activity related to the Group’s SAR plans as
of and for the years ended December 31, 2004, 2003 and 2002
is presented below (SARs in millions; per share amounts in €):
Compensation expense or benefit (representing the reversal of
previously recognized expense) on SARs is recorded based on
changes in the market price of DaimlerChrysler Ordinary Shares.
For the years ended December 31, 2004, 2003 and 2002, the
Group recognized no compensation expense in connection with
SARs, because the options underlying exercise prices were
greater than the market price for DaimlerChrysler Ordinary
Shares at December 31, 2004.
Medium Term Incentive Awards. The Group grants medium
term incentives to certain eligible employees that track, among
others, the market value of the DaimlerChrysler Ordinary Shares
over three year performance periods. The amount ultimately
earned in cash at the end of a performance period is primarily
based on the degree of achievement of corporate goals derived
from competitive and internal planning benchmarks and the value
of DaimlerChrysler Ordinary Shares at the end of three year
performance periods. The benchmarks are return on net assets
and return on sales. The Group issued 0.7 million medium term
incentives in 2004 (2003: 1.3 million; 2002: 1.2 million).
For the year ended December 31, 2004 the Group recognized
compensation expense (before taxes) of €12 million (2003: €35
million; 2002: €20 million) in connection with the medium
term incentive awards.
25. Accrued Liabilities
Accrued liabilities are comprised of the following:
a) Pension Plans and Similar Obligations
Pension plans and similar obligations are comprised of the fol-
lowing components:
The increase of the pension liabilities of €0.7 billion resulted pri-
marily from the first-time consolidation of MFTBC.
The decrease in accrued other postretirement benefits of €0.2
billion resulted mainly from lower provisions due to the Medicare
Act in the U.S.
DaimlerChrysler implemented in 2001 restructuring plans at
Freightliner and Chrysler Group (see Note 7), including certain
workforce reduction initiatives. The impacts on the pension
and postretirement obligations resulting from settlements and
curtailments of these turnaround plans are contained in the
following disclosures.
Pension Plans
The Group provides pension benefits to substantially all of its
hourly and salaried employees. Plan benefits are principally
based upon years of service. Certain pension plans are based on
salary earned in the last year or last five years of employment
while others are fixed plans depending on ranking (both wage
level and position).
139
84.75
–
–
78.31
79.13
79.13
79.13
–
–
75.00
74.24
74.24
42.5
–
–
(2.2)
40.3
40.3
36.3
–
–
(3.8)
32.5
32.5
40.3
–
–
(4.0)
36.3
36.3
Number of
SARs
2002
Weighted
average
excercise price
2003
Weighted
average
excercise price
2004
Weighted
average
excercise price
Number of
SARs
Number of
SARs
74.24
–
–
72.54
71.37
71.37
Outstanding at beginning of year
Granted
Exercised
Forfeited
Outstanding at year-end
SARs exercisable at year-end
(in millions of €)
At December 31,
2003
Due after
one year
12,275
946
8,662
21,883
Total
2004
Due after
one yearTotal
12,634
1,674
8,609
22,917
13,923
3,134
24,509
41,566
13,467
2,794
22,911
39,172
Pension plans and similar
obligations (see Note 25a)
Income and other taxes
Other accrued liabilities
(see Note 25b)
(in millions of €)
At December 31,
20032004
5,606
8,021
296
13,923
4,951
8,203
313
13,467
Pension liabilities (pension plans)
Other postretirement benefits
Other benefit liabilities