Porsche 2009 Annual Report Download - page 30

There are no other benefits provided for by
the company. In particular, the members of the com-
pany’s executive board do not receive any pension
benefits. The executive board members’ individual
service agreements with the company do not contain
any special regulations regarding premature termina-
tion of membership of the executive board.
Remuneration principles at Volkswagen AG
The remuneration of the executive board
members Professor Dr. Martin Winterkorn and Hans
Dieter Pötsch for their service to the Porsche SE
group as presented in the remuneration report also
contains the remuneration earned from Volkswagen
AG for the period from acceptance of their appoint-
ment to the company’s executive board effective as of
25 November 2009 to the date of deconsolidation of
Volkswagen AG on 3 December 2009.
This remuneration comprises a fixed basic
salary, including other benefits in kind, and a variable
component based on the business development of the
previous two years. No remuneration was granted
from conversion rights under the stock option plan in
effect until the end of 2009.
Instead, the supervisory board of Volkswagen
AG decided to introduce a long-term incentive (LTI) as
a new variable component for the board of manage-
ment and top management of the Volkswagen group,
the amount of which is largely dependent on whether
the aims of the Strategy 2018 are met.
The underlying indices of customer satisfac-
tion, in the field of employer appeal and sales growth
are added and then multiplied by the return index de-
rived from the development of return on sales. The
LTI is consequently paid out only if the group is finan-
cially successful. The supervisory board determines
the amount of the LTI for each fiscal year on the ba-
sis of the total index’s four-year average. In the intro-
ductory phase, the LTI will be calculated and paid out
for the first time in 2011 for the 2010 fiscal year and
forecasts for the 2011 fiscal year. This process will
successively be applied in the years 2012 and 2013.
Calculations will be based on historical figures for
four fiscal years for the first time as of the 2014 fis-
cal year.
Remuneration principles at Porsche AG
In addition to their membership of Porsche
SE’s executive board, Thomas Edig and Michael
Macht were members of the executive board of Por-
sche AG in the reporting period and received remu-
neration for their service. This remuneration has been
considered in the executive board remuneration dis-
closed pro rata temporis as of the beginning of the
fiscal year until the date of deconsolidation of Por-
sche Zwischenholding GmbH and thus also of Porsche
AG on 7 December 2009. The management of Por-
sche Zwischenholding GmbH, which comprises the
same individuals as the executive board of Porsche
AG, does not receive any remuneration for the as-
sumption of its duties at Porsche Zwischenholding
GmbH.
The remuneration system for Porsche AG’s
executive board was adjusted accordingly by the su-
pervisory board when the German Act on the Ade-
quacy of Management Board Compensation (VorstAG)
was introduced and the service agreements of the
executive board members were changed accordingly
in the course of spin-off of operations to the (new)
entity Porsche AG.
The remuneration of Porsche AG’s executive
board essentially comprises three components:
Each executive board member receives a
fixed annual salary, comprising a fixed basic compo-
nent and a fixed management bonus. The latter is not
included in the calculation of the company pension
entitlements.
In addition, each executive board member re-
ceives a variable component, the amount of which is
based on the result from ordinary activities deter-
mined (in accordance with International Financial Re-
porting Standards (IFRSs)) for the Porsche AG group
(Porsche AG and its subsidiaries) and the degree of
target achievement for certain agreed targets. It is
paid out after the close of a fiscal year (short-term
30 Corporate governance report