Management Board remuneration
Performance-based remuneration structure
The Supervisory Board determines and regularly reviews Management Board remuneration. It is performance-based, and adjusted to both the size of the company, and its commercial and financial position. The remuneration contains both fixed and variable (performance-based) components.
By way of divergence from the recommendation of the German Corporate Governance Code, the structure of the variable components is not tied to negative corporate trends. The variable remuneration components depend partly on the Group‘s performance, and partly on the attainment of qualitative targets pursuant to a target agreement. The amounts of all variable remuneration components are limited.
Two Management Board members participated in the ”Stock Appreciation Rights Program“ (SARP) for managers, which formed the subject of a resolution in November 2007. Both Management Board members were granted ”Stock Appreciation Rights“ (SARs) as part of the program, which they could have exercised under particular terms until March 25, 2010. The gain that can be generated through exercising the SARs is based on the company‘s stock market share price. Neither of the Management Board members affected exercised their SARs during 2010, as a consequence of which these SARs have lapsed entirely.
The fixed components comprise an annual fixed salary, benefits in kind and company pension fund benefits. Benefits in kind include the private use of company cars and company pension fund benefits. centrotherm photovoltaics also enters into D&O insurance policies for all Management Board members. Management Board employment contracts were adjusted in 2010 to meet the new statutory requirements, and a deductible for D&O insurance was agreed for Management Board members.
The Supervisory Board does not regard further adaptation of the current contracts with its Management Board members as requisite, since several Management Board members already have an interest in the company’s sustained and positive development due to their substantial stake in the company. In the assessment of the Supervisory Board, the remuneration components currently set out in the Management Board agreements are Appropriate both in themselves and when considered overall. They do not encourage the Management Board to enter into inappropriate risks.
Management Board members received a total of TEUR 1,723, including benefits in kind, for their Management Board activities in 2010. Contributions of TEUR 3 were also made to the company pension fund. Payments were made to former Management Board members in the year under review in an amount of TEUR 396.
Pursuant to the resolution of the Shareholders’ General Meeting of July 5, 2007, Management Board remuneration is not disclosed individually.
Supervisory Board remuneration
Supervisory Board remuneration is regulated by centrotherm photovoltaics AG‘s company statutes. After reimbursement of expenses and VAT related to remuneration and expenses, Supervisory Board members receive payment consisting of a fixed component and fees for attending meetings. The annual fixed component amounts to TEUR 20 per member, and the fee for attending meetings amounts to TEUR 1 per meeting. The Chairperson of the Supervisory Board receives double this amount in each case, and her deputy receives one and a half times the fixed component and the attendance fee. centrotherm photovoltaics also enters into directors & officers (D&O) insurance policies for all Supervisory Board members.
The Supervisory Board members drew a total of TEUR 90 by way of fixed remuneration plus attendance fees of TEUR 41 during the 2010 period under review. These payments are distributed as follows among the individual Supervisory Board members:
Dr. Horn Unternehmensberatung GmbH, in which Prof. Brigitte Zürn, the company’s chairperson of the Supervisory Board, is active as Managing Director, renders tax consultancy services and similar consultancy services at standard market hourly and daily rates for the centrotherm photovoltaics Group on the basis of a contract dated March 22, 2007, which was approved by both the Supervisory Board and a shareholder general meeting resolution of July 5, 2007. On the basis of this agreement, the centrotherm photovoltaics Group paid consultancy fees totaling TEUR 54 (net) in the 2010 financial year.
Prof. Dr. Brigitte Zürn
Rolf Hans Hartung
Management stock participation program
The Management and Supervisory boards passed a resolution in November 2007 to implement a share-based remuneration system, the Stock Appreciation Rights Program (SARP), to enable the Management Board and Group managers to participate economically in CTPV AG‘s share capital.
In a first tranche in 2007, SARP participants were granted a total of 260,000 option rights to so-called phantom stocks with effect as of October 12, 2007. It would have been possible to exercise the stock appreciation rights after the expiry of two years following the date of the allocation of the tranche, as long as certain exercise hurdles related to the share price were satisfied. The number of options amounted to 240,000 option rights as of December 31, 2009, which expired on March 25, 2010.
A personnel expense of TEUR 32 was reported in the previous year in connection with the options that were granted to Management Board members, and which expired on March 25, 2010. No personnel expense was reported in this connection in 2010.