Compensation systems for the Management Board: Sustainable pay-for-performance

In accordance with Section 87a AktG, the compensation system for members of the Management Board of listed companies must contribute to promoting the business strategy and long-term development of the company. The design of the compensation system, in particular the variable compensation components, is a key tool for the Supervisory Board to set targeted incentives for the members of the Management Board. In addition to ensuring a strategy-supportive and sustainable design, external influencing factors which are changing constantly must also be considered. Next to regulatory requirements, these factors also include the expectations of investors and proxy advisors, who will express their disapproval at the latest with the next vote on the Management Board compensation system at the Annual General Meeting if they discover “red flags” in the design.

Against this background, the compensation system for the Management Board should be reviewed regularly to ensure that it supports the company's strategy, complies with regulatory requirements, and aligns with capital market expectations. The Mercer | hkp///group Corporate Governance Advisors draw on many years of consulting experience and comprehensive market data and are available as independent consultants at all times.