Siemens 2007 Annual Report Download - page 103

Corporate Governance Report: Compensation Report 103
Other. No loans from the Company are provided to members of the Managing Board.
Commitments and Contingencies. The Company has provided a guarantee in the
amount of €4.5 million as security for a collateral guarantee in the total amount of
€5 million to be provided by a former member of the Managing Board (for details
see Note 29 of the “Notes to Consolidated Financial Statements”).
2. Supervisory Board remuneration
The remuneration of the members of the Supervisory Board was determined 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 responsibi-
lities of the Supervisory Board members, and the Company’s overall business positi-
on and performance. In addition to a fi xed compensation component, the remunera-
tion includes variable compensation based on the Company’s short-term and
long-term performance. The Chairman, the Deputy Chairmen, as well as the Chair-
man and the members of the Audit Committee receive additional compensation. The
members of the Compliance Committee and the Nominating Committee do not re-
ceive additional compensation for these services in fi scal year 2007.
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 fi scal year 2007
includes three components:
¢ a fi xed 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 fi xed compensation of €50,000 per year and short-term variable compen-
sation 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 fi s-
cal 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 applicable fi ve-
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 offi ce have in-
creased by more than 50 percent compared to the beginning of the term of offi ce.
Earnings per share, on which the calculation of the Supervisory Board’s remunera-
tion is based, has to be adjusted for signifi cant extraordinary items. For fi scal year
2007, the Supervisory Board’s remuneration was determined on the basis of earn-
ings per share in the amount of €4.76, after adjustment for signifi cant extraordinary