Siemens 2012 Annual Report Download - page 123

49 C. Combined Management Report 239 E. Additional Information 135 D. Consolidated Financial Statements
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a figure that represents that year’s target attainment, which
may lie between % and % (cap). This target attainment
will then determine the actual monetary value of the award
and the resulting number of Stock Awards.
> On the other hand, the development of the performance of
Siemens’ stock compared to its competitors is to have a di-
rect effect on compensation. For this purpose, with respect
to the other half of the annual target amount for the Stock
Awards, the Supervisory Board will first grant a number of
Stock Awards equivalent to the monetary value of half the
target amount on the date of the award. The Supervisory
Board will also decide on a target system (target value for
% and target curve) for the performance of Siemens
stock relative to the stock of competitors (at present ABB,
General Electric, Philips, Rockwell, Schneider). The refer-
ence period for measuring the target will be the same as the
four-year restriction period for the
Stock Awards. After this
restriction period expires, the Supervisory
Board will deter-
mine how much better or worse Siemens stock has per-
formed relative to the stock of its competitors. This determi-
nation will yield a target attainment of between % and
% (cap). If target attainment is above %, an additional
cash payment corresponding to the outperformance is ef-
fected. If target attainment is less than %, a number of
Stock Awards equivalent to the shortfall from the target will
expire without replacement.
With regard to the further terms of the Stock Awards, the same
general principles apply for the Managing Board and for senior
executives; these principles are discussed in more detail in
   .     .
That note also includes further information about the stock-
based employee investment plans.
Share Ownership Guidelines
The Siemens Share Ownership Guidelines are an integral part
of the remuneration system for the Managing Board and senior
management. These guidelines require the members of the
Managing Board – after a certain buildup phase – to hold
Siemens
stock worth a multiple of their base compensation
(% for the President and CEO, % for the other members
of the Managing Board) during their term of office on the Man-
aging Board. The determining figure in this context is the aver-
age base compensation that the relevant member of the Man-
aging Board has drawn over the four years of the buildup
phase. Accordingly, changes that have been made to base com-
pensation in the meantime are included. Non-forfeitable stock
awards (Bonus Awards) are taken into account in determining
compliance with the Share Ownership Guidelines.
Evidence that this obligation has been met must first be pro-
vided after the buildup phase, and updated annually thereafter.
If the value of the accrued holdings declines below the mini-
mum to be evidenced from time to time because the market
price of Siemens stock has fluctuated, the member of the
Managing Board must acquire additional shares.
Pension benefit commitments
The members of the Managing Board, like all Siemens AG em-
ployees, are included in the Siemens Defined Contribution
Benefit Plan (BSAV). Under the BSAV, members of the Manag-
ing Board receive contributions that are credited to their per-
sonal pension account. The amount of the annual contribu-
tions is based on a predetermined percentage which refers to
the base compensation and the target amount for the bonus.
This percentage is decided annually by the Supervisory Board;
it was set most recently at %. The non-forfeitability of pen-
sion benefit commitments is in compliance with the provi-
sions of the German Company Pensions Act (Betriebsrenten-
gesetz). Special contributions may be granted to Managing
Board members on the basis of individual decisions of the
Supervisory Board. In the case of new appointments of mem-
bers of the Managing Board from outside the Company, these
contributions may be defined as non-forfeitable from their
inception. If a member of the Managing Board had earned a
pension benefit entitlement from the Company before the
BSAV was introduced, a portion of his contributions went
toward financing this prior commitment.
Members of the Managing Board are entitled to benefits under
the BSAV on reaching the age of , at the earliest. They may
choose to have their accrued pension benefit balance paid out
as a pension, as a lump sum, or in a maximum of twelve annu-
al installments. If the pension option is chosen, a decision
must be made as to whether it should include pensions for
surviving dependents. If a member of the Managing Board dies
while
receiving a pension, benefits will be paid to the member’s
surviving
dependents if the member has chosen such benefits.
The Company will then provide a limited-term pension to sur-
viving children until they reach age , or age  in the case of
commitments made on or after January , .
Benefits from the retirement benefit system that was in place
before the BSAV was introduced are normally granted as pen-
sion benefits with a surviving dependents’ pension. In this
case as well, a payout in installments or a lump sum may be
chosen instead of pension payments.
Members of the Managing Board who were employed by the
Company on or before September , , are entitled to
transition payments for the first six months after retirement,
equal to the difference between their final base compensa-
tion and the retirement benefits payable under the corporate
pension plan.