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.

In accordance with the requirements of the German Stock Corporation Act and the recommendations of the German Corporate Governance Code (GCGC), the compensation of the Executive Board members consists of fixed and variable components. The variable compensation consists of a cash component paid as an annual bonus and long-term compensation components in the form of the long-term incentive plan launched in 2016 and the virtual stock option plans last granted in the year 2014. 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 the tasks of the 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.

In the reporting year, the Supervisory Board did not consult any 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.

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 2017 and the previous year was the Group's adjusted 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 determined by the Chairman of the Supervisory Board members and the respective Executive Board member and then reviewed and approved by the Supervisory Board.

In addition, there is a long-term variable compensation component in the form of a Long-Term Incentive Plan ("LTIP"), which was granted to the in 2016 already incumbent Executive Board members as of May 1, 2016, and runs until 2023, including holding periods. The LTIP stipulates a participation in the increase in the company value, measured on the basis of market capitalization in the form of a cash payment claim with subsequent obligation to purchase shares.