Porsche 2009 Annual Report Download - page 31

incentive). The targets that are arranged in a separate
agreement are oriented towards a sustainable develop-
ment of the Porsche AG group.
In addition, the supervisory board added a
long-term incentive (LTI) to the remuneration structure
as a variable component, which is also based on the
result from ordinary activities determined (in accor-
dance with IFRSs). It is not paid out until two years
later and is additionally contingent on the defined
long-term targets being reached at the time of pay-
ment.
Payment of the LTI component is conditional
upon a profit being generated in the last fiscal year
before it falls due.
The amount paid out for the LTI component
depends to a large extent on the targets set forth in
the long-term business plan concerning the fiscal year
in question and the objective defined there. If the re-
sult falls short of the target figure by 50 percent, the
LTI component is forfeited.
Both remuneration components are capped
(bonus cap). The supervisory board has the option to
reduce the variable remuneration components at its
discretion provided it considers this appropriate in
light of extraordinary developments. This may in par-
ticular be the case if, for example, the result from
ordinary activities increases significantly without the
executive board or any individual member of the
board having been involved to a considerable extent.
The short-term incentive makes up approxi-
mately 40 percent of the maximum variable total re-
muneration, while the long-term incentive accounts for
around 60 percent.
In addition, the members of Porsche AG’s ex-
ecutive board receive other benefits in kind, such as
the use of company cars and provision of insurance
cover, for which Porsche AG bears the taxes incurred.
The deductible provided by Sec. 93 (2) German Stock
Corporation Act (AktG) has been arranged for the
D&O insurance policy concluded by the company for
its executive board members.
The executive board members’ service
agreements with Porsche AG do not contain any spe-
cial regulations regarding premature termination of
membership of the executive board.
31