Siemens 2015 Annual Report Download - page 42

Combined Management Report

The value of the Siemens stock to be transferred for Stock
Awards after the end of the restriction period is subject to a
ceiling of  % of the respective target amount. If this maxi-
mum amount of compensation is exceeded, the correspond-
ing entitlement to stock commitments will be forfeited without
replacement.
With regard to the further terms of the Stock Awards, the same
principles apply in general to the Managing Board and to sen-
ior managers. These principles are discussed in more detail in
NOTE 25 in B.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
Transparency through simplicity:
Three equally balanced components within the remuneration system and three equally balanced targets within the Bonus
₁⁄₃
Base compensation
₁⁄₃
Variable compensation
(Bonus)
₁⁄₃
ROCE
₁⁄₃
Earnings
per share
₁⁄₃
Individual
targets
₁⁄₃
Long-term
stock-based compensation
(Siemens Stock Awards)
Performance of Siemens stock
compared to  competitors
Maximum amount for compensation overall
In addition to the maximum amounts of compensation for
variable compensation and long-term stock-based compensa-
tion, a maximum amount for compensation overall has been
defined. Since fiscal , this amount cannot be more than
. times higher than target compensation. Target compensa-
tion comprises base compensation, the target amount for
variable compensation and the target amount for long-term
stock-based compensation, excluding fringe benefits and pen-
sion benefit commitments. When fringe benefits and pension
benefit commitments for a given fiscal year are included, the
maximum amount of compensation overall for that year will
increase accordingly.
Share Ownership Guidelines
The Siemens Share Ownership Guidelines are an integral part
of the remuneration system for the Managing Board and senior
executives. These guidelines require that – after a specified
buildup phase – Managing Board members hold Siemens stock
worth a multiple of their base compensation –  % for the
President and CEO,  % for the other members of the Manag-
ing Board – throughout their terms of office on the Managing
Board. The determining figure in this context is the average
base compensation that a member of the Managing Board has
received over the four years before the applicable dates of proof
of compliance. Changes that have been made to base compen-
sation in the meantime are included. Non-forfeitable stock
commitments (Bonus Awards) which were granted until fiscal
 are taken into account in determining compliance with
the Share Ownership Guidelines.
Compliance with these guidelines must be proven for the first
time after a four-year buildup phase. Thereafter, it must be
proven annually. If the value of a Managing Board member’s
accrued holdings declines below the required minimum due to
fluctuations in the market price of Siemens stock, he or she
must acquire additional shares.
Pension benefit commitments
Like employees of Siemens AG, the members of the Managing
Board are included in the Siemens Defined Contribution Benefit
Plan (BSAV). Under the BSAV, Managing Board members re-
ceive contributions that are credited to their personal pension
accounts. The amount of these annual contributions is based
on a predetermined percentage related to their base compensa-
tion and the target amount for their Bonuses. This percentage is
decided upon annually by the Supervisory Board. Most recently
it was set at  %. In making its decisions, the Super visory Board
takes account of the intended level of provision for each individ-
ual and the length of time he or she has been a Managing Board
member as well as the annual and long-term expense to the
Company resulting from that provision. The non-forfeitability