The Managing Directors
The Managing Directors. compensation, which is determined by the Administrative Board, consists of non-performance-based and performance-based components. The non-performance-based components consist of a fixed salary and non-cash compensation, whereas the performance-based components consist of bonuses and components with a long-term incentive effect. 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 and the Company's long-term prospects.
A fixed salary is paid out monthly as non-performance-based basic compensation. In addition, the Managing Directors receive non-cash compensation, such as company cars, pension contributions and insurance premiums. In principle, these benefits are granted to all Managing Directors in an equal manner and are included in the non-performance-based compensation.
The bonus component of performance-related compensation is mainly based on the PUMA Group's operating income (EBIT) and free cash flow and is staggered according to the degree to which targets are met. In addition, qualitative individual goals are set. An upper limit is also agreed.
The previous performance-based compensation component with a long-term incentive effect (stock appreciation rights) as part of a stock option plan was not granted beyond the 2012 financial year. The existing options can be exercised until the end of April 2017 if the exercise criteria are met. Details on the parameters used for the respective programs are provided in Section 19 of the Notes to the Consolidated Financial Statements.
Pro-rata provisions totaling € 2.1 million (€ 1.9 million) were set up for the compensation program (virtual shares/monetary units) with long-term incentives (from the years 2013 to 2016) for Managing Directors. Under the performance-based program, 70% of the compensation will be based on the medium-term performance of PUMA SE.s share and 30% will be based on the medium-term performance of Kering SA.s share in relation to benchmark companies. Further information on this program can be found in Section 19 of the Notes to the Consolidated Financial Statements.
The fixed compensation for the three Managing Directors amounted to € 1.9 million in the financial year (previous year: € 1.9 million) and variable bonuses came to € 2.5 million (previous year: € 1.5 million). Non-cash compensation totaled € 0.1 million (previous year: € 0.1 million).
The Managing Directors receive pension benefits, for which the Company took out a pension liability insurance policy. The proportion of the pension capital that is already financed through contributions to the pension liability insurance is deemed to be vested. During the financial year, € 0.4 million was allocated for Managing Directors (previous year: € 0.4 million). The present value of the pension benefits granted to active Managing Directors in the amount of € 2.6 million as of December 31, 2016 (previous year: € 1.7 million) was offset against the pledged asset value of the pension liability insurance policy, which was of an equal amount.
Pension obligations to former members of the Board of Management, their widows and Managing Directors amounted to € 13.6 million (previous year: € 13.3 million) and are accordingly recognized as liabilities under pension provisions, unless they are offset against asset values of an equal amount. Pensions paid totaled € 0.2 million (previous year: € 0.2 million).
In 2016, a long-term incentive program, Game Changer 2019, was introduced for senior management and strategically important employees that will allow this group of employees to participate in PUMA SE.s earnings over the medium term. € 1.2 million has been set aside for this program. An additional € 1.0 million was set aside for the predecessor program Game Changer 2018 (Tranche 2) (previous year: € 1.0 million) and an additional € 0.7 million was set aside for the program Game Changer 2017 (Tranche 3) (previous year: € 0.8 million) in the reporting period. Further information on this program can be found in Section 19 of the Notes to the Consolidated Financial Statements.
In accordance with the Articles of Association, the Administrative Board has at least three members; it currently consists of nine members. The compensation of the Administrative Board is comprised of a fixed and a performance-based component. The total fixed compensation amounted to € 0.3 million (previous year: € 0.3 million).
In accordance with the Articles of Association, each member of the Administrative Board receives a fixed annual compensation in the amount of € 25,000. The fixed compensation is increased by an additional fixed annual amount of € 25,000 for the Chairman of the Administrative Board, € 12,500 for the Vice-Chairman of the Administrative Board, € 10,000 for each committee chairman (excluding the Nominating Committee) and € 5,000 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 performance-based compensation amounts to a maximum of € 10,000 per year. The Chairman of the Administrative Board receives twice this amount (maximum € 20,000) and the Vice Chairman receives one and a half times this amount (maximum € 15,000) in compensation. Since earnings per share are below the minimum amount in the financial year, no performance-based compensation will be paid.