Siemens 2012 Annual Report Download - page 125

49 C. Combined Management Report 239 E. Additional Information 135 D. Consolidated Financial Statements
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      
On the basis of our One Siemens target system, at the begin-
ning of the fiscal year the Supervisory Board set the targets and
weighting for the unchanged parameters compared to the pre-
vious year: organic revenue growth, return on capital em-
ployed (ROCE) adjusted, and free cash flow, in each case on the
basis of continuing operations, together with earnings per
share (EPS) on the basis of continuing and discontinued opera-
tions. The definition of these parameters and their weighting
acknowledges a sustainable enhancement of corporate value.
An internal review of the appropriateness of the Managing
Board’s compensation for fiscal  has confirmed that the re-
muneration of the Managing Board resulting from the target at-
tainment for fiscal  is to be considered appropriate. Follow-
ing the decision on determining the achievement of the targets
set at the beginning of the fiscal year, the Supervisory Board
decided at its meeting on November , , to set the variable
compensation component (bonus), the Stock Awards to be
granted and the pension benefit contributions as follows:
Variable compensation component (bonus)
In setting the targets for the variable compensation (bonus) at
the beginning of fiscal , the Supervisory Board took into
account that the Company focuses on a sustainable apprecia-
tion of value:
> The primary focus of the decision was capital-efficient
growth; consequently, for fiscal  more importance was
attributed to the target parameters of organic revenue
growth and return on capital employed (ROCE) adjusted.
> For ROCE adjusted, the target value from the prior year
remained unchanged.
> The target for free cash flow was increased noticeably com-
pared to the prior year.
As a consequence, the following targets were set and attained
with respect to the variable compensation component:
The values measured for target attainment were not adjusted.
The Supervisory Board decided, exercising its duty-bound
discretion (pflichtgemäßes Ermessen), to individually adjust
the bonus payout amounts resulting from target attainment
upward or downward for single Managing Board members
with business responsibility for Sector portfolios. In its deci-
sion, the Supervisory Board reflected the attained performance
of the Sectors.
Long-term stock-based compensation
For half of the annual target amount for the Stock Awards, an
average basic EPS (from continuing and discontinued opera-
tions) of €. was determined for fiscal years  through
, yielding a target attainment of %.
For the other half of the annual target amount for the Stock
Awards, the Supervisory Board approved a number of Stock
Awards equivalent to the monetary value of half the target
amount on the award date. The amount by which these stock
commitments must be adjusted – or an additional cash pay-
ment must be made – after the end of the restriction period
will depend on the performance of Siemens stock compared to
the stock of five competitors (ABB, General Electric, Philips,
Rockwell, Schneider) over the coming four years, and will
therefore not be determined until after the end of fiscal .
The number of stock commitments (Bonus Awards and Stock
Awards) granted was based on the closing price of Siemens
stock in Xetra trading on the date of commitment less the
present value of dividends expected during the holding period,
because beneficiaries are not entitled to receive dividends.
This figure for determining the number of commitments
amounted to €. (prior year: €.).
Target parameter Weight % of target Actual  figure Target attainment
Revenue growth (organic)  40 % 1% 3% 146.40%
ROCE adjusted  40% 16.1% 17.0% 123.75%
Free cash flow
20% €3,600 million €4,790 million 139.67%
Total target attainment 135.99%
1 Continuing operations