Compensation of the Management Board




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Compensation of the Executive Board

Axel Springer’s compensation policy follows the principle of granting compensation to the Executive Board and Supervisory Board that is based on their performance in the interest of sustainable corporate development.

The variable compensation is composed of a cash component paid in the form of an annual bonus and long-term compensation components in the form of virtual share option plans and a long-term incentive plan. All components of compensation are appropriate, both individually and as a whole. The Supervisory Board has considered at length the appropriateness and adequacy of the Executive Board compensation by taking into account a number of criteria, including in particular Section 87 of the German Stock Corporation Act (“AktG”) and Section 4.2.2 sentences 4 and 5 of the GCGC, such as information about the tasks of an individual Executive Board member, his personal performance and the economic position, success and future prospects of Axel Springer. Due consideration is also given to the industry environment. However, the requirement for a continuous separate examination of the comparability of Executive Board compensation with the compensation of senior management and the workforce as a whole is waived.

In the financial year 2016, the Supervisory Board consulted an independent external compensation expert.

The fixed compensation corresponds to the annual fixed salary; in addition, the Executive Board members receive a company car or company car allowance, the assumption of premiums for insurance against the risk of invalidity and death, individual travel and security expenses as fringe benefits. The annual fixed salary is generally established for the entire term of an employment agreement and is disbursed in 12 monthly installments. When determining the fixed salary, the Supervisory Board orientates itself, among other things, on the tasks of the individual Executive Board member, the current economic situation, the success and the prospects for the future of the Group.

The variable compensation is in the form of an annual bonus as a cash component, and depends on individual performance with regards to individual objectives (relating to the quantitative divisional objectives and qualitative individual objectives, amongst others, based on the strategy of Axel Springer SE) as well as Group objectives; it is limited to double the sum payable for 100 % achievement of objectives. The Group's target for the year 2016 and the previous year was Group EBITDA. Individual objectives for measuring performance of individuals and Group objectives are decided upon by the Supervisory Board. Part of the variable cash component is based on annual objectives and in part based on achievement of Group objectives established for an assessment period of three years. Achievement of objectives is initially established by the Supervisory Board members and chairman with the relevant Executive Board member and then reviewed and finalized by the Supervisory Board.

In addition, there is a long-term variable compensation component in the form of virtual stock option plans. With regards to the executive programs that are granted, see the information in the notes to the consolidated financial statements under Section (13) in the 2016 Annual Report.

As of May 1, 2016, current members of the Executive Board were granted a new long-term variable remuneration in the form of a long-term incentive plan (“LTIP“) with a duration – including lock-up periods – until 2023. The LTIP stipulates a participation in the increase in the company value, measured on the basis of
market capitalization.