Siemens 2007 Annual Report Download - page 94

94 Corporate Governance Report: Compensation Report
Members of the Managing Board who were appointed to the Managing Board before
October 1, 2002 have a contractual right to receive transitional payments for twelve
months after leaving the Managing Board. The transitional payments generally
amount to the fi xed salary of the year of resignation and the average of variable
bonuses paid for the last three fi scal years before resignation. In single cases, the
transitional payments equal a one-year target compensation.
In the event of a change of control – i.e. if one or several shareholders acting jointly
or in concert acquire a majority of the voting rights in Siemens AG and exercise a
controlling infl uence, or if Siemens AG becomes a dependent enterprise as a result
of entering into an enterprise contract within the meaning of § 291 of the German
Stock Corporation Act (AktG), or if Siemens AG is to be merged into an existing cor-
poration or other entity – any member of the Managing Board has the right to termi-
nate the contract of employment if such change of control results in a substantial
change in position (e.g. due to a change in corporate strategy or a change in the
Managing Board member’s duties and responsibilities). If this right of termination
is exercised, the Managing Board member will receive a severance payment which
amounts to the target annual compensation applicable at the time of contract termi-
nation for the remaining contractual term of offi ce, but at least for a period of three
years. In addition, non-monetary benefi ts are settled by a cash payment equal to fi ve
percent of the severance payment. No severance payments are made if the Managing
Board member receives benefi ts from third parties in connection with a change of
control. A right of termination does not exist if the change of control occurs within a
period of twelve (12) months prior to a Managing Board member’s retirement.
Upon leaving offi ce as President and member of the Managing Board, Dr. Klaus
Kleinfeld agreed to a non-compete arrangement not included in his original service
agreement that prevents him from working for Siemens’ major competitors, includ-
ing any of their affi liated companies. In addition, Dr. Kleinfeld undertook to act as
consultant to the Managing and Supervisory Boards of Siemens AG in connection
with the Company’s strategic direction and issues concerning its organizational and
personnel structure during Peter Löscher’s job orientation phase. In consideration
of the non-compete arrangement, the additional consulting services, and in settle-
ment of other claims, Dr. Kleinfeld was promised payments totaling €5.75 million
and the non-forfeiture of 11,437 stock awards.
On November 7, 2007 and November 17, 2007, respectively, the Chairman’s Commit-
tee of the Supervisory Board determined the values of stock awards and the bonus
awards to be granted, after assessing the attainment of the targets set at the start of
the fi scal year.
For the fi scal year 2007, the aggregate cash compensation amounted to €33.2 mil-
lion (2006: €27.8 million) and total remuneration amounted to €41.7 million (2006:
€30.4 million), representing an increase in total remuneration of 37.2 percent.