The remuneration report describes the principles of the remuneration system for members of the Management Board of
Vonovia SE (Vonovia) and explains the
structure as well as the income received by each Management
Board member. Furthermore, the remuneration report contains
information on the principles and the amount of remuneration
for the members of the Supervisory Board. The total remuneration received by each Management Board member, including the
names of the members, is shown in the Notes.
The remuneration report takes account of the applicable regulations of the German Commercial Code (HGB), the German Accounting Standard (DRS 17), the laws on disclosure and appropriateness of Management Board remuneration (VorstAG, VorstOG)
as well as the principles of the German Corporate Governance
The remuneration system and the amount of remuneration of
the Management Board are determined by the Supervisory Board
on the proposal of the Executive and Nomination Committee.
The criteria used to assess whether the remuneration is appropriate
include the duties of the individual Management Board
member, his or her personal performance, the economic situation,
the company’s success and future outlook and the extent
to which such remuneration is standard practice. When determining
whether the level of remuneration is standard practice,
the company looks at its peer group and the remuneration
structure that applies in the rest of the company. Furthermore,
we compare ourselves with other listed companies of a similar
size. The remuneration structure is oriented towards sustainable
growth of the company.
In addition to fixed remuneration, the members of the Management
Board receive variable short-term as well as variable
long-term remuneration which takes account of both positive
and negative developments. Furthermore, the members of
the Management Board receive fringe benefits in the form of
insurance premiums, as well as the private use of means of communication
and company vehicles. In one case, the company assumes the costs
associated with the rental of an apartment as opposed to insurance premiums.
Fixed remuneration and fringe benefits
The fixed remuneration is paid to the Management Board members
in twelve equal monthly instalments. In addition to their
fixed remuneration, the Management Board members are given
the opportunity to pay an annual pension contribution of 20 %
of the fixed remuneration into a deferred compensation scheme.
Alternatively, the amount is paid out as cash remuneration.
The fringe benefits include premiums for a term life insurance
policy and 50 % of health and nursing care insurance contributions,
albeit up to the amount of the statutory employer’s
share at the most. In the event of illness, salaries continue to
be paid for a period of twelve months, but until the end of the
employment contract at the latest. In the event of death, Vonovia
continues to pay the salary to the surviving dependants for up
to six months.
Travel expenses are reimbursed in line with the Vonovia Travel
Should the Management Board members be held liable for financial
losses while executing their duties, this liability risk is, in
principle, covered by the D&O insurance for Management Board
members of the company. Vonovia follows the statutory requirements,
which provide for a deductible of 10 % of any claim up to
an amount of one-and-a-half times the fixed annual remuneration
for all claims in one financial year.
The variable short-term remuneration is based on success criteria
set in advance by the Supervisory Board as well as personal
targets. The variable short-term remuneration is capped at
€ 700,000 for Rolf Buch as the chairman of the Management
Board, and at € 440,000 for Klaus Freiberg and Dr A. Stefan
Kirsten. The success criteria state that 40 % of the variable
short-term remuneration depends on the achievement of the
Group AFFO target, 15 % on the achievement of the Group
EBITDA target for sales and a further 15 % on the improvement
of the customer satisfaction index as determined by an independent
third party. 30 % of the variable short-term remuneration is
related to the achievement of the personal targets agreed with
the Supervisory Board.
The Management Board members receive the variable shortterm
remuneration one month after the adoption of the annual
financial statements of Vonovia.
Long-term incentive plan (LTIP)
As part of the LTIP, the Management Board members were granted
a total of 931,030 notional shares (SARs = stock appreciation
rights) last year, paid out in five equal annual tranches. Over the
five-year period, 400,000 notional shares are attributable to Rolf
Buch, with Klaus Freiberg and Dr A. Stefan Kirsten each being
allocated 265,515. The notional shares will be converted into payout
amounts for each annual tranche on the basis of a formula
laid down in the LTIP agreement.
When the shareholding of the previous majority shareholder
Monterey Holdings I S.á. r.l. was reduced to below 30 % in 2014,
the first tranche fell due and was paid out in 2014. The other
tranches will each be paid out on July 11 of the subsequent years,
with the exception of Rolf Buch’s tranches, which will be paid
out on February 28 of each year.
The cash-settled amounts are determined from the product of
the number of notional shares per tranche, the market value
of the share, taking into account dividend payments in the
period between the IPO and the payout date, and the level of
performance target achievement for the relevant measurement
period. This level of performance target achievement results
from the sum of the NAV percentage, the TSR percentage and the
AFFO percentage divided by three. (NAV = EPRA Net Asset Value,
TSR = Total Shareholder Return, AFFO = Adjusted Funds from
The possible performance target achievement may be between
90 % and 110 %. The following table shows the performance
target achievement parameters as well as the factors influencing
|Performance target achievement parameters
||Factors influencing the parameters
||NAV increase per share in relation to the comparator group defined in the LTIP agreement
||Increase in the market closing price adjusted for dividend payments (generally the stock market price)
in relation to the comparator group defined in the LTIP agreement
||AFFO from the last financial statements against the AFFO target for the same period in the medium-term plan
Payments in the event of premature termination of
Management Board duties
Payments to a Management Board member on premature termination
of his or her contract, including fringe benefits, are
contractually regulated to not exceed the value of two years’
remuneration and are paid for no more than the remaining term
of the employment contract (severance pay cap).
Payments in the event of premature termination of a Management
Board member’s contract due to a change of control are
limited to 150 % of the severance pay cap.
Remuneration of the Supervisory Board
The remuneration of the Supervisory Board is determined by the
shareholders at the Annual General Meeting and is regulated in
Article 13 of the Articles of Association of Vonovia.
The current Supervisory Board remuneration system is based
on the resolution passed by the Annual General Meeting on
June 9, 2013.
Each member of the Supervisory Board receives annual fixed
basic remuneration of €100,000. The chairman of the Supervisory
Board receives double this amount, a deputy chairman
one-and-a-half times this amount.
The members of the Audit Committee receive additional annual
fixed remuneration of €40,000; the Audit Committee chairman
receives double this amount. Supervisory Board members who
are members of one or more other Supervisory Board Committees
that have acted at least once a year receive additional
annual remuneration of € 20,000 per committee; in the case of
the committee chairman € 40,000.
The sum total of all aforementioned remuneration plus remuneration
for membership of Supervisory Boards and comparable
supervisory bodies of Group companies must not exceed an
amount of € 300,000 per calendar year and Supervisory Board
The company reimburses the Supervisory Board members for
appropriate expenses incurred due to the exercising of their
office. VAT is reimbursed by the company to the extent that the
Supervisory Board members are eligible to separately invoice
VAT and have exercised such right.
The remuneration of the Supervisory Board of Vonovia breaks down
as follows for each member – on a pro rata basis according to
the length of service on the Supervisory Board:
The former members of the Supervisory Board Robert Nicolas
Barr, Lutz Basse, Arjan Breure and Tim Pryce waived their right to
receive the corresponding remuneration.
All remuneration is payable after the expiry of each financial
year. Supervisory Board members who are Supervisory Board
members or members of a committee of the Supervisory Board
for only part of a financial year receive corresponding pro rata
remuneration rounded up to the full month.
Furthermore, Vonovia has taken out a liability insurance (D&O
insurance) for the members of the Supervisory Board. Vonovia follows
the statutory requirements, which provide for a deductible
of 10 % of any claim up to an amount of one-and-a-half times
the fixed annual remuneration for all claims in one financial