Siemens 2006 Annual Report Download - page 97

Compensation Report 93
2. Supervisory Board remuneration
The remuneration of the members of the Supervisory Board was determined at the Annual Share-
holders’ 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 2006 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
compensation in the amount of €50,000 is granted, payable after expiration of the then applica-
ble five-year term of the Supervisory Board. This long-term compensation will only be paid if
earnings 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 calculation of the Supervisory Board’s remuneration is based, has to be adjusted for signifi-
cant extraordinary items. For fiscal year 2006, the Supervisory Board’s remuneration was deter-
mined on the basis of earnings per share in the amount of €3.40. The Chairman of the Super-
visory Board receives double, and each Deputy Chairman 1.5 times, the amounts of the fixed
compensation and the short-term variable compensation of an ordinary member. Each member
of the committees and additionally the chairmen of these committees (in each case other than the
Chairman’s Committee, the Mediation Committee, and the Ownership Rights Committee) each
receive an additional half 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 Chairman of the
Supervisory Board is provided a company car and an office with secretarial services.