telegate AG supports the endeavours of the German Corporate Governance Code to increase transparency relating to the compensation components of Management Board compensation.
1. Performance-related compensation for management board
The Supervisory Board’s Human Resources Committee advises and regularly reviews the structure of the remuneration system for the Management Board. The Committee is also responsible for defining the details of the Management Board’s remuneration.
The remuneration model for the Management Board shall be attractive and appropriate to compete for highly qualified management personnel. Criteria for the appropriateness of remuneration are, in particular, the duties of the respective Management Board member, his personal performance, the performance of the Management Board as well as the economic situation, success and future prospects of the company in the context of the peer group.
2. General Remuneration System
The Management Board’s remuneration consists of fixed (performance-independent) and performance-related components. The performance-independent components comprise a fixed salary and benefits in kind, while the performance-related components are made up of bonuses and a component with long-term incentive effects. Further to these, the members of the Management Board have received pension benefits.
As a basic remuneration element independent on the annual performance, the fixed salary is paid out as monthly salary. It is pegged to the income schedule that is defined by the Human Resource Committee. This schedule takes account of the current situation and the planning/targets of the telegate Group. The benefits in kind essentially comprise the value recognized by taxation guidelines for the usage of a company car. The taxes due for that company car are paid by the individual Management Board member.
Loans or advances were not granted to Management Board member in the year under review.
The bonus payment constitutes one element of the performance-related remuneration. It is contingent on achieving key targets that are most important for increasing the company’s enterprise value. Sales as well as earnings targets from the annual budget plan, which is subject to approval by the Supervisory Board, serve as benchmark figures. This remuneration component acts as an incentive for the Management Board’s successful work and constitutes an important element in the total cash remuneration. It can be as high as 57 % of said cash remuneration.
3. Remuneration in 2007
Since the preceding fiscal year legal stipulations require the remuneration of Management Board members to be disclosed on an individual basis. telegate lists the remuneration of Management Board members collectively as one sum, as the shareholders' meeting of May 15, 2006 had made use of the so-called opting-out clause.
In fiscal year 2007 the Management Board remuneration per IAS/IFRS came to 1,129,000 Euro (prior year 1,274,000 Euro).
Of this 490,000 Euro (prior year 450,000 Euro) were for salaries and 533,000 Euro for bonuses (prior year 393,000 Euro). The value of benefits in kind totaled 34,000 Euro (prior year 37,000 Euro).
In the last fiscal year no new stock options have been granted to the Management Board. In 2006 140,000 stock options from the second tranche of the stock option program have been granted, with a value at the time of award of 319,000 Euro per IAS/IFRS. The Notes to the Group's annual financial statement provide further details under the section “Share based payments”.
The Management Board members received pension benefits totaling 72,000 Euro per IAS/IFRS. They are essentially based on the time of service and individual remuneration of the Management Board members. The pension benefit is linked only to the fixed remuneration component. The Notes to the Group's annual financial statement provide further details under the section “Retirement benefit plans”. No undertaking has been made toward any Management Board member for additional benefits in case of termination of employment.
Management Board compensation in Euro (according to IFRS):
|
