In this compensation report, details on the compensation of the members of the Executive Board and Supervisory Board are given. This compensation report is a constituent part of the corporate governance report and the Group Management Report.
Executive Board Compensation
The compensation for the members of the Executive Board comprises three components: a fixed annual basic salary, a performance-related bonus and a payment linked to the Company’s longterm performance and its share price (long-term incentive plan).
The Supervisory Board is informed regularly by its Presiding Committee on the structure of the compensation system for the Executive Board. The Presiding Committee is responsible for determining the compensation of the Executive Board.
For Mr. Reid and Mr. Raps, who were appointed to the Executive Board in 2007, as well as for Dr. Ott, the compensation rules were modified in several points.
Annual Salary
The fixed annual salary is reviewed every two years. In consultation with external experts, it was set, with effect on July 1, 2006, at €642,000 for the Chairman of the Executive Board and €428,000 for the other members of the Executive Board. Newly appointed members of the Executive Board receive an annual salary that is 20% lower over a period of 18 months. In addition to the fixed salary, the members of the Executive Board also receive fringe benefits (benefits in kind) in the form of insurance cover and the use of company cars, the value of which is shown in accordance with applicable tax law.
Bonus
The relevant targets for the variable components of compensation are agreed upon between the Presiding Committee of the Supervisory Board and the Executive Board at the beginning of each year. The level of bonuses depends on the development of the Group’s earnings before taxes (EBT). If the relevant targets are achieved, the bonus amounts to 83% of the fixed annual salary. Bonus payments are not made if at least 50% of the EBT goal is not reached (Mr. Bodner, Professor Schetter, Dr. Schneider) or 75% of the goal (Dr. Ott, Mr. Raps, Mr. Reid) and is limited by a cap of 150% of the target value.
Long-Term Incentive Plan
Compensation with a long-term incentive element is paid in accordance with a long-term incentive plan (LTI), which for Mr. Bodner, Professor Schetter and Dr. Schneider has the following main features: if the value added in a particular financial year exceeds the minimum agreed for that year, the members of the Executive Board are granted phantom shares in the form of so-called performance share units (PSUs). If Bilfinger Berger shares under perform compared with the comparative index, the MDAX, the number of PSUs granted can be reduced by up to 20%. The value of the PSUs granted varies during a waiting period of two years in line with the development of the Bilfinger Berger share price. After the end of the waiting period the existing value of the PSU is paid out.