Remuneration

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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 Boards Personnel Committee. Criteria for the appropriateness of compensation 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 (pay-scale 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 (DAX 30) companies. 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 2016 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 multi-year performance 2013–2015 is recognised in the year of payment, i.e. in 2016.

Fixed and variable remuneration components

The remuneration received by the members of Munich Reinsurance Company’s Board of Management for fulfilling their duties in respect of the parent company and its subsidiaries is shown in the following table.

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)

Name Financial
year
Basic
remuner-
ation
Remuneration
in kind/fringe
benefits
Annual
perform-
ance1
Multi-year
perform-
ance2

Other Total
   
Nikolaus von Bomhard 2016
2015
1,260,000
1,230,000
35,783
33,564
840,887
1,035,093
1,901,200
2,214,800

4,037,870
4,513,457
Giuseppina Albo 2016
2015
555,000
487,500
21,959
96,010
364,293
439,538


941,252
1,023,048
Ludger Arnoldussen3 2016
2015
615,000
600,000
90,384
38,717
325,572
461,160
903,070
1,163,750

1,934,026
2,263,627
Thomas Blunck 2016
2015
615,000
600,000
31,700
33,996
402,459
432,390
949,620
1,173,060

1,998,779
2,239,446
Doris Höpke 2016
2015
555,000
487,500
33,356
29,884
519,462
312,925


1,107,818
830,309
Torsten Jeworrek4 2016
2015
885,000
870,000
37,801
182,311
601,187
737,803
1,410,465
1,745,625

2,934,453
3,535,739
Markus Rieß4  (joined 16.9.2015)
thereof for Munich Reinsurance Company
2016
 
976,250


337,500
115,717


39,677
567,351


229,744
1,500,000


1,500,000
3,159,318


2,106,921

thereof for Munich Reinsurance Company
2015 280,365
94,063
7,430
801
176,488
72,691
  750,000
750,000
1,214,283
917,555
Peter Röder 2016
2015
615,000
600,000
35,034
34,932
389,554
543,690
921,690
1,173,060

1,961,278
2,351,682
Jörg Schneider 2016
2015
885,000
870,000
37,011
34,627
593,055
723,614
1,354,605
1,592,010

2,869,671
3,220,251
Joachim Wenning3 2016
2015
615,000
600,000
139,039
33,699
511,489
523,950
903,070
1,093,680

2,168,598
2,251,329
Total 2016
2015
7,576,250
6,625,365
577,784
525,170
5,115,309
5,386,651
8,343,720
10,155,985
1,500,000
750,000
23,113,063
23,443,171

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 2016 annual performance. The amounts shown for annual performance remuneration are based on estimates, i.e. the relevant provisions and the additional/reduced expenditure for 2015. For the 2015 annual performance, a total of €192,471 less was paid out than had been reserved in the financial year 2015. The additional/reduced expenditure breaks down as follows: von Bomhard –€17,564, Albo –€22,420, Arnoldussen –€70,014, Blunck –€54,474, Höpke €22,182, Jeworrek –€23,021, Rieß –€17,214, Röder –€37,674, Schneider –€14,860, Wenning €42,588. This results in the following actual bonus payments for 2015: von Bomhard €972,930, Albo €412,913, Arnoldussen €411,600, Blunck €403,200, Höpke €283,238, Jeworrek €694,260, Rieß €159,274, Röder €483,000, Schneider €675,990, Wenning €546,000. The amounts shown for the annual performance 2015 comprise the respective provision for 2015 and the relevant additional/reduced expenditure for 2014.
2 The amounts paid out in 2016 were for multi-year performance 2013–2015, those paid out in 2015 were for 2012-2014.
3 Remuneration in kind/fringe benefits for 2016 including anniversary payments.
4 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 2016 including expenditure for security. Other: compensation, payable in four equal instalments, for the forfeited variable remuneration from the previous employer.

The following table shows the amounts payable for the variable remuneration.

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

Name     Annual
performance1, 3
Multi-year
performance2, 3
Total amounts
payable
  Set for
Nikolaus von Bomhard4 2016
2015
2017
2016
294,000
882,000
686,000
2,058,000
980,000
2,940,000
Giuseppina Albo 2016
2015
2017
2016
430,500
388,500
1,004,500
906,500
1,435,000
1,295,000
Ludger Arnoldussen 2016
2015
2017
2016
430,500
430,500
1,004,500
1,004,500
1,435,000
1,435,000
Thomas Blunck 2016
2015
2017
2016
430,500
430,500
1,004,500
1,004,500
1,435,000
1,435,000
Doris Höpke 2016
2015
2017
2016
430,500
388,500
1,004,500
906,500
1,435,000
1,295,000
Torsten Jeworrek 2016
2015
2017
2016
619,500
619,500
1,445,500
1,445,500
2,065,000
2,065,000
Markus Rieß5 (Joined: 16.9.2015)
thereof for Munich Reinsurance Company
2016 2017 592,125
236,250
1,381,625
551,250
1,973,750
787,500

thereof for Munich Reinsurance Company
2015 2016 592,125
236,250
1,381,625
551,250
1,973,750
787,500
Peter Röder 2016
2015
2017
2016
430,500
430,500
1,004,500
1,004,500
1,435,000
1,435,000
Jörg Schneider 2016
2015
2017
2016
619,500
619,500
1,445,500
1,445,500
2,065,000
2,065,000
Joachim Wenning 2016
2015
2017
2016
731,500
430,500
1,706,833
1,004,500
2,438,333
1,435,000
Total 2016
2015
2017
2016
5,009,125
5,212,125
11,687,958
12,161,625
16,697,083
17,373,750

1 At the time of preparation of this report, no Supervisory Board resolution had yet been passed on the amounts to be paid for 2016. The amounts shown for annual performance remuneration are based on estimates, i.e. the relevant provisions and the additional/reduced expenditure for 2015 posted in the table on page 35.
2 The remuneration set for multi-year performance for 2016 is payable in 2019, that for 2017 in 2020.
3 The information on the assessment bases and parameters on page 31 f. for the amounts set for 2016 also applies to the amounts set for 2017.
4 The amounts set for 2017 are granted pro rata temporis for a period of four months.
5 The compensation components that Markus Rieß received for his work at ERGO Group AG are included in the remuneration.

Pension entitlements

Personnel expenses of €6.5m (6.1m) were incurred in the financial year to finance the pension entitlements for active members of the Board of Management. Of these, €1.5m was apportionable to defined benefit plans and €5.0m to defined contribution plans. As a consequence of the risk transfer to an external 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 pension-specific risks. The following defined benefits, present values, contribution rates and personnel expenses result for the individual members of the Board of Management:

Pension entitlements

Defined benefit plan
Name Financial year Defined benefit1 Present value of
defined benefit as
at 31 December

 
Personnel
expenses for
provisions2
    €/year
Nikolaus von Bomhard3
2016
2015
407,100
407,100
16,653,577
15,054,562
287,233
527,633
Giuseppina Albo4, 5 2016
2015

4,458
2,297
686
Ludger Arnoldussen4, 6 2016
2015
157,500
157,500
4,003,478
3,311,629
357,138
393,528
Thomas Blunck4, 6

2016
2015
120,000
120,000
3,184,449
2,705,000
160,734
180,249
Doris Höpke4, 5 2016
2015

8,816
598
604
Torsten Jeworrek4, 7
2016
2015
171,000
171,000
5,709,959
5,000,570
193,904
213,884
Markus Rieß4, 8 (Joined: 16.9.2015)
thereof for Munich Reinsurance Company
2016
14,319
14,319
10,370
10,370

thereof for Munich Reinsurance Company
2015


Peter Röder4, 7 2016
2015
90,000
90,000
3,124,511
2,760,386
104,070
113,204
Jörg Schneider4, 6
2016
2015
275,000
275,000
10,320,861
9,151,294
328,896
356,457
Joachim Wenning4, 6
2016
2015

9,596
1,253
1,395
Total 2016
2015
1,220,600
1,220,600
43,034,024
37,983,441
1,446,493
1,787,640

See following table for footnotes.

Pension entitlements

Defined contribution plan
Name Financial
year
Pension contribution
rate for target total
direct remuneration
Entitlement as
at 31 December
Present value of
entitlement as
at 31 December
Personnel
expenses
    % €/year
Nikolaus von Bomhard3
2016
2015
17.00
17.00
222,085
186,676
7,639,349
7,371,076
714,000
697,000
Giuseppina Albo4, 5 2016
2015
25.50
25.50
33,081
17,442
9
9
471,750
414,375
Ludger Arnoldussen4, 6 2016
2015
14.75
14.75
93,956
81,462
3,912,302
3,138,144
302,375
295,000
Thomas Blunck4, 6
2016
2015
16.25
16.25
109,650
95,599
4,471,819
3,623,503
333,125
325,000
Doris Höpke4, 5 2016
2015
25.50
25.50
40,733
24,428
9
9
471,750
414,375
Torsten Jeworrek4, 7 2016
2015
19.50
19.50
182,894
158,167
7,601,747
6,092,019
575,250
565,500
Markus Rieß4, 8 (Joined: 16.9.2015)
thereof for Munich Reinsurance Company
2016 25.19
25.50
27,236
10,365
527,66010
9
743,125
286,875

thereof for Munich Reinsurance Company
2015 25.19
25.50
6,056
2,261
148,85110
9
213,026
79,953
Peter Röder4,7
2016
2015
20.25
20.25
126,480
105,744
5,349,033
4,159,381
415,125
405,000
Jörg Schneider4, 6 2016
2015
16.50
16.50
151,171
131,119
6,356,425
5,119,359
486,750
478,500
Joachim Wenning4, 6
2016
2015
25.50
25.50
132,163
113,759
9
9
522,750
510,000
Total 2016
2015
  1,119,449
920,452
35,858,335
29,652,333
5,036,000
4,317,776

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 Entitled to an occupational pension in the event of premature or regular termination of employment.
4 Entitled to occupational pension in the event of termination of employment owing to disability.
5 Entitled to vested benefits under the Employers’ Retirement Benefits Act in the event of premature or regular termination of employment.
6 Entitled to a reduced occupational pension on early retirement in the event of premature or regular termination of employment.
7 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.
8 Entitled to vested benefits under the Employers’ Retirement Benefits Act in the event of regular termination of employment.
9 Defined Contribution Plan within the meaning of IAS 19, Employee Benefits, so no present value shown.
10 Munich Reinsurance Company: see footnote 9; ERGO Group AG: No Defined Contribution Plan within the meaning of IAS 19, so present value shown.

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