The remuneration of the Board of Management members, which is determined by the Supervisory Board, is comprised of fixed and variable income components. The fixed components of the remuneration are comprised of a fixed salary and remuneration in kind, whereas the variable, performance-based components are comprised of bonuses and components with a long-term incentive effect (stock appreciation rights). The criteria for measuring the total remuneration include duties and services performed by the respective Board of Management member, as well as factors relating to the economic situation, the strategic 5-year planning and associated targets, the sustainability of achieved results, the long term profit outlook of the Company, and international benchmark comparisons.

 

The fixed remuneration component is paid out monthly as a non performance-based salary. In addition, Board of Management members receive remuneration in kind such as the use of company cars and insurance coverage. These benefits are generally made available to all Board of Management members on an equal footing and are included in non-performance-based remuneration.

 

The bonus, as a part of the performance-based remuneration, is based on the operating profit of the PUMA Group and is graduated in accordance with the level of target achievement. An upper limit is also agreed. 

 

The performance-based remuneration components with long-term incentive effect (stock appreciation rights), are generally provided as a supplement to the five-year plans. In this context, the number of stock appreciation rights issued is measured as a component of total remuneration. Measurement is based on the fair value of the respective stock appreciation rights as at the date of allocation. The possibility of a cap limit is provided as cover against unforeseen developments. Particulars concerning the parameters used for the respective programs are provided in the Notes to the Consolidated Financial Statements under No. 19.

 

The following amounts were recorded as expense for fixed and performance-based (profit sharing bonus) remuneration in the financial year: 

	Fixed component  € million	Performace- based component (profit sharing bonus)  € million	Total 2007 € million	Fixed  component  € million	Performance- based component (profit sharing bonus)  € Mio.	Total 2006 € million
Jochen Zeitz(CEO, BoardChairman) Martin Gänsler (Deputy Chairman - until June 30, 2007) Dieter Bock (Chief Financial Officer)	3.20 0.76 0.37	4.00 1.03 0.30	7.20 1.79 0.67	3,17 0.77 0.36	4.00 1.05 0.30	7.17 1.82 0.66
Total	4.33	5.33	9.66	4.30	5.35	9.65

  

The stock appreciation rights in accordance with the Long Term Incentive Program represent another performance-based remuneration component with long term incentive effect. In the financial year ended, no option rights were granted and no respective personnel expense resulted during the financial year. In the previous year, personnel expense in the amount of € 3.51 million was posted for stock appreciation rights granted in 2006. Of this amount, € 3.48 million were attributable to the Chief Executive Officer, and € 0.03 million the Chief Financial Officer.

 

In the event of premature termination of the employment relationship, the Chairman of the Board is paid the agreed salary components up to the original contract termination date. With respect to the remuneration components resulting from the Long Term Incentive Program, it has been agreed that the option rights already granted at the date of departure shall be paid out on the basis of a value determined in accordance with “black-scholes”.

 

The Chairman of the Management Board is provided with a pension commitment for which the Company took out a pension liability insurance policy. The proportion of the pension capital which is already financed through contributions to the pension liability insurance is deemed to be a vested claim. Following addition of € 0.50 million, as of the balance sheet date, this results in a pension claim of T€ 194 p.a., or one-off capital compensation in the amount of the present value upon retirement. 

 

Pension commitments to former Management Board members amounted to € 2.01 million (previous year: € 2.28 million); they are recorded under pension provisions. No pension payments have been made. 

 

The option programs issued or redeemed in previous years result in personnel expenses of € 6.83 million (previous year: € 11.99 million). Of this amount, € 6.78 million (previous year: € 11.78 million) are attributable to the Chief Executive Officer, and € 0.04 million (previous year: € 0.10 million) are attributable to the Chief Financial Officer. 

 

 

In accordance with the Articles of Association, the Supervisory Board has six members.   Fixed annual remuneration amounts to T€ 30.0 for each Supervisory Board member. The Supervisory Board Chairman receives twice this amount, and the Deputy Chairman one and a half times this remuneration. Performance-based remuneration amounts to € 20.00 per € 0.01 of the earnings per share as reported in the consolidated financial statements (before dilution) that exceed a minimum amount of € 16.00, the maximum amount being T€ 10.0 per year, however. The Chairman of the Supervisory Board receives twice this amount, and the Deputy Chairman receives one and a half times the amount. Owing to earnings per share of € 16.80 in the financial year, the Supervisory Board Chairman receives performance-based remuneration of T€ 3.2, and his deputy receives the amount of T€ 2.4. Each other member receives the amount of T€ 1.6. The fixed and performance based remuneration was granted to the Supervisory Board on a prorata basis in keeping with the Supervisory Board membership term.

 

Fixed remuneration in the total amount of T€ 222.2 (previous year: T€ 213.2) was paid in the financial year, and performance-based remuneration totaled T€ 11.9 (previous year: T€ 5.5).