Remuneration

Normal view (turn off text only mode)
You are here:

Company

Remuneration

Total remuneration of the Board of Management

The level of the target overall direct remuneration for the individual members of the Board of Management is set by the full Supervisory Board, acting on recommendations from the Supervisory Board’s Personnel Committee (from 2018: the Remuneration Committee). Criteria for the appropriateness of remuneration are the respective Board member’s duties, the Board member’s personal performance, the performance of the Board as a whole, and the financial situation, performance and future prospects of Munich Re. Other criteria are the relevant comparative benchmarks for Board remuneration and the prevailing remuneration structure at Munich Reinsurance Company. The Supervisory Board takes account of the level of Board salaries in relation to the level of salaries paid to senior managers and to general staff members over a period of time, and also determines how senior managers and general staff (payscale and non-pay-scale employees) are to be classified for the purpose of this comparison. The consideration of what level of remuneration is appropriate also takes into account data from peer-group companies (including those in the DAX 30). The median remuneration of the DAX 30 companies is used as a reference for the overall remuneration amount of the Chairman of the Board of Management. New Board members are placed at a level which allows sufficient potential for development of the remuneration in the first three years.

Board of Management remuneration is disclosed under two different sets of rules, namely German Accounting Standard No. 17 (DRS 17, revised 2010) and the German Corporate Governance Code. There are therefore deviations in individual remuneration components and total remuneration.

Board of Management remuneration under DRS 17

Under DRS 17, remuneration for annual performance in 2017 is shown as the provisions set aside for that purpose taking into account the relevant additional/reduced expenditure for the previous year, since the performance on which the remuneration is based has been completed as at the balance sheet date and the requisite Board resolution is already foreseeable. Under DRS 17, remuneration for multiyear performance 2014–2016 is recognised in the year of payment, i.e. in 2017.

Fixed and variable remuneration components

The members of Munich Reinsurance Company’s Board of Management received remuneration totalling €19.8m (23.1m) for fulfilment of their duties in respect of the parent company and its subsidiaries in the financial year. Remuneration therefore declined by around €3.3m year on year, mainly because the achievement rate for the Group result is 0% owing to the 2017 hurricane losses and because the result of the assessment for the reinsurance field of business was lower year on year both on an annual and multi-year basis. The remuneration received by the individual members of the Board of Management is shown in the table below.

Remuneration of individual Board members as per DRS 17 (revised 2010)
(in accordance with Section 285 sentence 1 (9a) sentences 5–8 of the German Commercial Code (HGB) and Section 314(1) (6a) sentences 5–8 of the German Commercial Code)

1 At the time of preparation of this report, no Supervisory Board resolution had yet been passed on the amounts to be paid for the 2017 annual performance. The amounts shown for annual performance remuneration are based on estimates, i.e. the relevant provisions and the additional/reduced expenditure for 2016. The amounts shown for the 2016 annual performance comprise the respective provision for 2016 and the relevant additional/reduced expenditure for 2015. The actual bonus payments for 2016 can be seen in the remuneration tables “Remuneration paid in accordance with the German Corporate Governance Code” on page 38 ff.
2 The amounts paid out in 2017 were for multi-year performance 2014–2016, those paid out in 2016 were for 2013–2015.
3 Remuneration in kind/fringe benefits for 2017 including expenditure for security (Wenning) and anniversary payments (Albo).
4 As compensation for a post-contractual non-competition agreement, Ludger Arnoldussen was paid a total of €1,515,000 for the period May to December 2017.
5 The compensation components that Markus Rieß received for his work at ERGO Group AG are included in the remuneration.
Remuneration in kind/fringe benefits for 2017 including expenditure for security.
Other: Compensation, payable in four equal instalments, for the forfeited variable remuneration from the previous employer.

The variable remuneration amounts payable are listed in the table below.

Amounts payable for variable remuneration of the individual Board members in the event of 100% performance evaluation as per DRS 17 (revised 2010), corridor 0–200%

1 The remuneration set for the annual component for 2017 is payable in 2018, that for 2018 in 2019.
2 The remuneration set for the multi-year component for 2017 is payable in 2020, that for 2018 in 2022.
3 Information on the assessment bases and parameters for the amounts set for 2017 is available on page 28 f., and for the amounts set for 2018 on page 41 ff.
4 The amounts set for 2017 were granted pro rata temporis for a period of four months.
5 The entitlement to variable remuneration was forfeited owing to departure.
6 The amounts set for 2017 were granted pro rata temporis for a period of eight months.
7 The compensation components that Markus Rieß receives for his work at ERGO Group AG are included in the remuneration agreed for 2017.
Owing to changes to the remuneration system, ERGO Group AG will no longer grant Markus Rieß any variable target amounts with effect from 2018.

Pension entitlements

Personnel expenses of €6.4m (6.5m) were incurred in the financial year to finance the pension entitlements for active members of the Board of Management. Of these, €1.3m was apportionable to defined benefit plans and around €5.1m to defined contribution plans. As a consequence of the risk transfer to an external pension insurer under the defined contribution system, the visible pension costs since 2009 are noticeably higher. The Company accepts this increase in order to avoid higher costs in future and to eliminate long-term pensionspecific risks. The following defined benefits, present values, contribution rates and personnel expenses result for the individual members of the Board of Management:

Pension entitlements

See following table for footnotes.


Pension entitlements

1 In the case of Board members transferred from the old system to the new, the amount corresponds to the value of the annual vested pension at 31 December 2008.
2 Expenses for defined benefit plan, including provision for continued payment of salary for surviving dependants.
3 Left the Board as at 26 April 2017; has received a pension since 1 May 2017.
4 Entitled to occupational pension in the event of termination of employment owing to incapacity to work.
5 Entitled to a reduced occupational pension on early retirement in the event of premature or regular termination of employment.
6 Left the Board as at 31 December 2017; entitled to a pension with effect from 1 December 2024.
7 Left the Board as at 26 April 2017; entitled to a reduced occupational pension on early retirement with effect from 1 May 2019.
8 Entitled to a reduced occupational pension on early retirement in the event of premature termination of employment, and to an occupational pension in the event of regular termination of employment.
9 Entitled to vested benefits under the Company Pension Act in the event of premature or regular termination of employment.
10 Entitled to vested benefits under the Company Pension Act in the event of regular termination of employment.
11 Defined contribution plan within the meaning of IAS 19: Employee Benefits, so no present value shown.
12 Munich Reinsurance Company: see footnote 11; ERGO Group AG: no defined contribution plan within the meaning of IAS 19, so present value shown.

Interesting? Share this content on your favourite social media platform.


Main Navigation
Service Men
Accessibility

Note


This publication is available exclusively to Munich Re clients. Please contact your Client Manager.