5. Remuneration, shareholdings and loans

5.1 Content and method of determining the remuneration and shareholding programmes

For the content and method of determining remuneration and the granting of shares and loans to Members of the Board of Directors and Group Executive Board, please see the separate Remuneration Report.

5.2 Rules set out in the Articles of Association

5.2.1 Rules on the principles of remuneration laid down in the articles of association

The principles for remunerating the Members of the Board of Directors are set out in Art. 22a of the Articles of Association. This states that their overall maximum remuneration approved by the General Meeting consists of the remuneration until the next AGM, plus estimated social security charges and contributions to social security and pension institutions as well as other fringe benefits that are paid by the company and that qualify as remuneration. According to the above Article, the Board of Directors can determine that a portion of the remuneration is paid in shares. In this case, it defines the conditions, including the time of allocation and valuation, and decides on any retention period.

According to the current rules on the remuneration of Members of the Board of Directors, Members receive an annual fixed payment. There is no performance-related component to their remuneration. The rules on the remuneration of Members of the Board of Directors also state that Members of the Board of Directors receive 2/3 of the payment due in cash, and 1/3 in shares of Implenia Ltd. The shares are blocked for trading for three years.

The principles for compensating the Members of the Group Executive Board are set out in Art. 22b of the Articles of Association. According to Para. 1 of Art. 22b of the Articles of Association, their maximum overall remuneration as approved by the General Meeting consists of the annual basic remuneration, the maximum remuneration from the short-term profit plan, the value of the maximum allocation from the long-term participation plan, plus estimated social security charges and contributions to social security, pension and savings plans and other fringe benefits paid by the company.

The short-term components of remuneration are based, according to Para. 2 of Art. 22b of the Articles of Association, on objective performance values relating to the Group’s or a business segment’s results, to goals calculated in comparison to the market, other companies or comparable parameters, and/or to individual goals, the achievement of which is usually measured during a one-year period. The long-term components of remuneration are based, according to Para. 3 of Art. 22b of the Articles of Association, on the company’s long-term growth, and allow employees to participate appropriately in such growth.

Finally, Para. 4 of Art. 22b of the Articles of Association states that the Group Executive Board’s remuneration takes the form of cash, shares, comparable instruments or units, or non-cash benefits or services. The Board of Directors can also stipulate that if a predefined event such as a change of control or termination of an employment contract occurs, exercise conditions and exercise periods or retention periods can be shortened or cancelled, remuneration may be paid on the assumption that goals are achieved, or remuneration may be forfeited.

The additional amount for remunerating Members of the Group Executive Board appointed after the General Meeting is set out in Art. 15 Para. 5 of the Articles of Association. According to this, the company is authorised to pay Members of the Group Executive Board who join or take on additional responsibilities during a period for which the Group Executive Board’s remuneration has already been approved an additional amount of no more than 50% of the applicable total amount of remuneration paid to the Group Executive Board if the overall amount approved for the period in question is insufficient to pay the new Members. The maximum amount paid to such a Member of the Group Executive Board may not exceed the maximum remuneration paid to the Chief Executive Officer (CEO) in the preceding financial year by more than 25%. The additional amount does not have to be approved by the General Meeting and may be used by the company for all types of remuneration. 

The Articles of Association, containing the precise wording of the provisions mentioned above, can be found on Implenia’s website.
http://www.implenia.com/en/about-us/corporate-governance/articles-of-association.html

5.2.2 Rules on loans, credit facilities and pensions for Members of the Board of Directors and the Group Executive Board

Art. 22c of the Articles of Association stipulates that payments into insurance and pension schemes outside the occupational pension scheme or similar foreign institutions are permitted if approved by the General Meeting individually or as part of an overall amount.

The Articles of Association do not include any provisions about granting loans or credit facilities to Members of the Board of Directors or the Group Executive Board.

The Articles of Association, containing the precise wording of the provision mentioned above, can be found on Implenia’s website.
http://www.implenia.com/en/about-us/corporate-governance/articles-of-association.html

5.2.3 Rules in the articles of association on General Meeting votes about remuneration

General Meeting votes on remuneration paid to the Members of the Board of Directors and Group Executive Board are governed by Art. 15a of the Articles of Association.

Para. 1 of Art. 15a of the Articles of Association states that each year the General Meeting of Shareholders needs to give prospective approval to the Board of Directors’ proposals about the maximum total amount paid to the Board of Directors for the period up to the next AGM and the overall amount paid to the Group Executive Board for the next financial year.

Based on Para. 2 of Art. 15a, the Board of Directors can make proposals to the General Meeting about the maximum total amounts or individual elements of remuneration for other periods, or about additional sums for special elements of remuneration, and additional proposals for approval.

Approval of the Board of Directors’ proposals relating to remuneration is by relative majority without consideration of abstentions pursuant to Para. 3 of Art.15a of the Articles of Association. If the General Meeting rejects a proposal from the Board of Directors, the Board of Directors must determine the steps to be taken. It can convene an Extraordinary General Meeting or set a maximum total amount or several maximum partial amounts taking into account all the relevant factors and submit this/these to the next General Meeting for approval. The company can pay remuneration within such a maximum total or partial amount subject to approval by the General Meeting.

The Articles of Association, containing the precise wording of the provisions mentioned above, can be found on Implenia’s website.
http://www.implenia.com/en/about-us/corporate-governance/articles-of-association.html