Siemens 2005 Annual Report Download - page 84

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Fit4MoreLetter to our Shareholders Managing Board
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2. Supervisory Board remuneration
The remuneration of the members of the Supervisory Board was set at the Annual Shareholders’
Meeting through shareholder approval of a proposal by the Managing and Supervisory Boards.
Details of the remuneration are set forth in the Articles of Association of Siemens AG.
The remuneration of the members of the Supervisory Board is based on the Company’s size,
the assignments and responsibilities of the Supervisory Board members, and the Company’s
overall business position and performance. In addition to a fixed compensation component, the
remuneration includes variable compensation based on the Company’s short-term and long-term
performance. The Chairman, the Deputy Chairmen as well as the Chairman and the members of
the Audit Committee receive additional compensation.
The current remuneration policies for the Supervisory Board were authorized at the Annual
Shareholders’ Meeting of January 27, 2005. Details are set out in § 17 of the Articles of Association
of Siemens AG.
As a result, the remuneration of Supervisory Board members for fiscal year 2005 includes three
components:
■a fixed compensation component,
■a short-term compensation component based on earnings per share, and
■a long-term compensation component based on earnings per share.
In accordance with these remuneration policies, each Supervisory Board member receives
fixed compensation of €50,000 per year and short-term variable compensation of €150 per year
for each €0.01 of earnings per share as disclosed in the Consolidated Financial Statements in
excess of a minimum amount of €1.00. This minimum amount will be increased annually by 10
percent, beginning with the fiscal year starting on October 1, 2005. In addition, long-term com-
pensation in the amount of €50,000 is granted, payable after expiration of the then applicable
five-year term of the Supervisory Board. This long-term compensation will only be paid if earn-
ings per share at the end of the Supervisory Board’s term of office have increased by more than
50 percent compared to the beginning of the term of office. Earnings per share, on which the cal-
culation of the Supervisory Board’s remuneration is based, has to be adjusted for significant
extraordinary items. For fiscal year 2005, the Supervisory Board’s remuneration was determined
on the basis of earnings per share in the amount of €2.52. The Chairman of the Supervisory
Board receives double, and each Deputy Chairman 1.5 times, the amounts of the fixed compensa-
tion and the short-term variable compensation of an ordinary member. The chairmen of the com-
mittees (other than the Chairman’s Committee, the Mediation Committee, and the Ownership
Rights Committee) each receive an additional 100 percent, the other members of said committees
each receive an additional 50 percent of the fixed and the short-term variable compensation. The
members of the Supervisory Board are reimbursed for any out-of-pocket expenses incurred in
connection with their duties and for any sales taxes to be paid on their remuneration. The Chair-
man of the Supervisory Board is provided a company car and an office with secretarial services.