Managing Directors

Remuneration for the Managing Directors, which is stipulated by the Administrative Board, consists of base pay and performance-related components. The base pay components are a fixed salary and benefits in kind, while the performance-related components are divided into bonuses and long-term incentives (stock appreciation rights). Along with job assignments and performance of each individual Managing Director, the criteria for calculating the total remuneration are the economic situation, long-term strategic planning and related targets, the long-term durability of targeted results, the Company’s long-term prospects as well as international benchmark comparisons.

The base pay, which is a fixed component regardless of performance, is paid monthly as the salary. In addition, the Managing Directors receive benefits in kind, such as company cars and insurance premiums. In principle, all Managing Directors are equally entitled to the above benefits; they are included in the base pay.

The bonus component of performance-related compensation is mainly based on the PUMA Group’s operating income and free cash flow and is staggered according to the degree to which targets are met. The parties have also agreed to an upper limit.

Performance-related components of remuneration with long-term incentives (stock appreciation rights) are basically set up in conjunction with the multiannual plans, with the number of issued appreciation rights assessed as part of the overall remuneration. The number of stock appreciation rights issued is measured as a component of total compensation, based on the fair value of the stock appreciation rights on the allotment date. A cap is provided for to cover extraordinary, unforeseen developments. Please refer to item 19 of the Notes for details on the parameters for specific programs.

In the financial year fixed compensation for the five Managing Directors totaled €2.5 million (previous year: €4.9 million) and variable performance-based compensation totaled €0.4 million (previous year: €2.6 million).

After allocating expenses to the vesting period, expenses for new options and for options issued in previous years resulted in earnings totaling €1.1 million (previous year: expense €3.8 million). The income posted is because expense entries for options were rescinded in the reporting year due to the retirement of Managing Directors. Managing Directors were granted a total of 35,875 options from the “SOP 2008” Program in the financial year. Of these, 26,906 expired because Managing Directors retired. The fair value at the time of issue was €44.60 per option.

In the financial year 2012 a total of €4.7 million was spent on financial settlements and in this context for promised performances for retiring Managing Directors.

The Company has concluded reinsurance policies to cover existing pension commitments for Managing Directors. The portion of plan assets that has already been funded by the payment of premiums for the reinsurance coverage is counted as a vested claim. A contribution of €0.2 million (previous year: €0.4 million) was made for Managing Directors in financial year 2012. The present value of the defined benefit commitment to Managing Directors of €0.4 million on December 31, 2011 (previous year: €0.2 million) was netted against an equivalent amount for the pledged asset value of the reinsurance coverage.

Pension obligations to former members of the Board of Management totaled €10.2 million (previous year: €9.4 million) and have been recorded as liabilities under pension provisions accordingly, provided they were not netted against asset values of an equal amount. Pension accruals totaled €0.2 million (previous year: €0.2 million).


The Administrative Board

In accordance with the Articles of Association, the Administrative Board shall consist of at least three members; it currently has eight members. Compensation for the Administrative Board consists of fixed and performance-based compensation. Total remuneration for the fixed compensation totaled €0.3 million (previous year: €0.2 million).

In accordance with the Articles of Association, each member of the Administrative Board receives fixed annual compensation of €25.0 thousand. The fixed compensation is increased by an additional fixed annual amount of €25.0 thousand for the Chairman of the Administrative Board, €12.5 thousand for the Vice-Chairman of the Administrative Board, €10.0 thousand for each committee chairman (excluding the Nominating Committee) and €5.0 thousand for each committee member (excluding the Nominating Committee).

In addition, each Administrative Board member receives performance-based compensation equal to €20.00 for each €0.01 by which the earnings per share figure exceeds a minimum amount of €16.00 per share. The maximum performance-based compensation is €10.0 thousand per year. The Chairman of the Administrative Board receives twice that amount of compensation (a maximum of €20.0 thousand), while the Vice-Chairman receives 1.5 times that amount (a maximum of €15.0 thousand). Because the EPS did not reach the minimum amount in the financial year, no performance-related compensation was paid.