Remuneration report
In the spirit of transparent corporate governance SYSTAIC discloses the composition of the remuneration paid to members of its Executive Board and Supervisory Board in financial year 2008. The Company also explains which stock options were issued to members of the Executive Board within the scope of a long-term performance and achievement-orientated remuneration system.
Remuneration of the Supervisory Board
Remuneration structure
The remuneration of the Supervisory Board is regulated in Art. 16 of the Articles of Association of systaic AG; the Annual Shareholders' Meeting decides upon the amount of remuneration to be paid. In addition to being reimbursed their expenses and any value-added tax payable on their remuneration and expenses, the members of the Supervisory Board also receive a fixed sum. In financial year 2008 this amounted to € 3,000.00 per Supervisory Board member; the Chairman of the Supervisory Board receives a fixed sum of € 6,000.00. Total remuneration paid to all members of the Supervisory Board in financial year 2008 amounted to € 12,000.00.
SYSTAIC also took out financial liability insurance (D&O insurance) for the members of the Supervisory Board, which provides for an excess of € 5,000.00. SYSTAIC did not pay any advances or loans to any members of the Supervisory Board in the reporting period.
No additional consultancy or other service agreements extending beyond the activities of the Supervisory Board existed between individual members of the Supervisory Board and SYSTAIC in the period under review.
Shareholdings of the Supervisory Board
Deviating from Section 6.6 of the Corporate Governance Code, a separate entry of the overall ownership of shares or finance instruments relating to this is not planned, as stated by the Executive Board and Supervisory Board in the Remuneration Report, even if the overall ownership of all members of the Executive Board and Supervisory Board exceeds 1 % of the shares in the corporation. The Executive Board and Supervisory Board believe that it is sufficient to implement the duty of notification stipulated in the shareholding regulations (Wertpapierhandelsgesetz) if one single shareholder holds shares in excess of set threshold values.
Remuneration of the Executive Board
Performance-related remuneration
The remuneration structure established by the Supervisory Board for the members of the Executive Board is reviewed on a regular basis. It was designed to be performance-orientated and is based both on the size of the Company and its economic situation. The remuneration consists of two components: the fixed salary and payments in kind are paid on a non-performance-related basis, while the performance-related portion of the remuneration is divided into the management bonus and components with a long-term incentive effect.
Fixed components of the remuneration.
The fixed portion is paid in monthly instalments as a basic salary. The members of the Executive Board also receive payments in kind in the form of private use of a company car, which is added to the taxable income of the respective member. Furthermore, the members of the Executive Board receive contributions to health, nursing care and pension insurance policies taken out privately. SYSTAIC also maintains financial liability insurance (D&O insurance) for the members of the Executive Board, which provides for an excess of € 20,000.00, and legal protection insurance. No advances or loans were paid to any members of the Executive Board in financial year 2008. No commitments exist regarding pension schemes for members of SYSTAIC's Executive Board.
Performance-related bonus payments
Each member of the Executive Board is paid a management bonus as a performance-related remuneration component: for Hans-Jörg Hölzenbein, Michael Pack and Heiko Piossek, payment of this variable remuneration was based in financial year 2008 on the Company's consolidated EBIT; Olaf Achilles receives a variable remuneration based on a target agreement concluded with him. Mr. Hölzenbein received a guaranteed variable remuneration of € 45,000.00 and Mr. Piossek received € 50,000.00. An additional, long-term incentive is provided by SYSTAIC's stock option plan, for which tranches were issued in April and June 2008.
Other variable remuneration components are disclosed in the amount of € 84,500.00 under “Other current provisions”.
The remuneration of the Executive Board in 2008 can be broken down as follows:
Name | Fixed remuneration | Variable remuneration | Other income | Total |
Michael Pack, COO | 160000,00 | 0,00 | 6579,00 | 166579,00 |
Heiko Piossek | 171000,00 | 64534,00 | 7398,00 | 242932,00 |
Hans-Jörg Hölzenbein | 112500 | 54983,00 | 9027,00 | 176510,00 |
Olaf Achilles | 124000,00 | 84983,00 | 23833,00 | 232816,00 |
Total | 567500,00 | 204500,00 | 46837,00 | 818837,00 |
Stock option plans
Stock Option Plan 2008/I
By way of a resolution by the Annual Shareholders' Meeting on 5 May 2006 the Executive Board of systaic AG was authorised, subject to the approval of the Supervisory Board, to implement a stock option plan for employees of the Company. The Executive Board formulated the resolution to implement this stock option plan on 2 April 2008. The Supervisory Board approved this resolution on the same date. Subsequently, on 7 April 2008, a total of 120,000 stock options were offered to the members of the Executive Board (40% of the volume), employees of the Company (5%) and the senior executives (40%) and employees of its associated companies (15%). A total of 118,500 of these options were accepted.
Following a holding period of two years, the bearers of the stock options issued will be entitled to subscribe to one no-par value share per option, within fixed exercise periods. The possibility to exercise the options also depends on the achievement of market-related performance targets: the options may only be exercised, if the current market value of the share at the time the option is exercised exceeds the market value of the share at the time the option is purchased by at least 20 percent. This percentage shall increase each year by five percentage points after the holding period has expired. The strike price amounts to 50 percent of the share's market value at the time of issuance. The market value was fixed at € 7.46. The options may only be exercised within precisely defined periods. In principle, each exercise period begins on the first bank working day in each quarter. If the Company is listed on the stock exchange, the exercise periods begin with the first bank working day following the day of publication of the respective quarterly or annual report. Each exercise period consists of twenty bank working days. The options mature after five years, after which time they expire without compensation.
Stock Option Plan 2008/II
The Annual Shareholders' Meeting on 29 May 2008 authorised the Executive Board to issue further stock option plans. By way of a resolution of the Company's Executive Board on 29 May 2008, a total of 162,055 options were offered to the members of the Executive Board (50% of the volume), employees of the Company (14.7%), senior exeuctives (29.4%) and employees of its associated companies (5.9%). In July 2008, 145,896 of the options offered were accepted.
Following a holding period of two years, the bearers of the stock options issued shall be entitled to subscribe to one no-par value share per option. The options may only be exercised within precisely defined periods. In principle, each exercise period begins on the third bank working day following the publication of the Company's quarterly reports for the second and third quarters, respectively, and after the Annual Shareholders' Meeting; exercise periods usually consist of two weeks. Exceptions are made, for example, for periods shortly before and after shareholders' meetings and capital increases. The Company can deny exercise of the options shortly before the publication of ad hoc disclosures. The options may only be exercised if the strike price at the time the options are exercised corresponds to at least 110% of the market value of the Company's shares. At the time of issuance the market value of the shares was € 9.20. The options mature after five years, after which time they expire without compensation.
The Executive Board held a total of 144,000 options in the reporting period. At the beginning of financial year 2008 there were no options outstanding and no options were exercised by members of the Executive Board in financial year 2008. No options expired in the reporting period.
Overview of individual stock options granted
|
| Olaf | Hans-Jörg | Michael | Heiko |
Options granted in the financial year | Number | 4/5 | 4/5 | 4/5 | 4/5 |
Strike price in € | 3,73/ | 3,73/ | 3,73/ | 3,73/ | |
Value in € | 68.329/ | 68.329/ | 68.329/ | 68.329/ |
Shareholdings of the Executive Board
Deviating from Section 6.6 of the Corporate Governance Code, a separate entry of the overall ownership of shares or finance instruments relating to this is not planned, as stated by the Executive Board and Supervisory Board in the Remuneration Report, even if the overall ownership of all members of the Executive Board and Supervisory Board exceeds 1 % of the shares in the corporation. The Executive Board and Supervisory Board believe that it is sufficient to implement the duty of notification stipulated in the shareholding regulations (Wertpapierhandelsgesetz) if one single shareholder holds shares in excess of set threshold values.
Transactions executed by members of the Executive Board
Pursuant to Section 15a German Securities Trading Act (Wertpapierhandelsgesetz, WpHG), all persons who undertake management duties at a share issuer or who are closely connected to such a person, are obliged to disclose any transactions they execute with shares of this issuer or with financial instruments related to those shares. This disclosure obligation applies to all transactions, where they exceed a total of € 5,000 per calendar year. In financial year 2008 the members of the Executive Board made the following announcements concerning transactions executed by executives pursuant to Art. 15a WpHG:
On 30 October 2008 Michael Pack acquired 7,400 convertible bonds, each with a nominal value of € 100.00 and an issuing price of € 135.00. Hans-Jörg Hölzenbein purchased 5,000 shares at a price of € 4.98 per share on 30 October 2008.
