The Chairman’s Committee of the Supervisory Board is responsible for determining the structure and level of the remuneration of members of the Board of Managing Directors. In particular, the Chairman's Committee determines salaries and other compensation components, including pension benefits, for the Board of Managing Directors. At the proposal of the Chairman’s Committee, the full Supervisory Board discusses and regularly reviews the structure of the Management Board compensation system.
We have entered into service agreements with members of our Board of Managing Directors. These agreements established the following principal elements of compensation:
Salary. We established fixed remuneration for the members of our Board of Managing Directors based on a comparative analysis of the base salaries a selected peer group of international companies pays its Managing Directors.
Cash Bonus. As part of the variable compensation we pay annual cash bonuses to members of our Board of Managing Directors based on achievement of the planned return on equity of the group (based on underlying pre-tax profit, which excludes among other items net gains/losses from industrial holdings, in relation to the average active equity).
Mid-Term-Incentive (“MTI”). As further part of the variable compensation we grant a performance-based mid-term-incentive which reflects, for a rolling two year period, the ratio between our total shareholder return and the corresponding average figure for the peer group. The mid-term-incentive payment consists of a cash component (1/3) and equity-based awards (2/3) which contain long-term risk elements under the DB Global Partnership Plan. For further information on the terms of our DB Global Partnership Plan see Note [20] to the consolidated financial statements.
The aggregate remuneration, including performance-based compenstion, earned by the members of our Board of Managing Directors for the year ended December 31, 2003 was € 28,005,459. This aggregate remuneration was comprised of the following:
| in € | 2003 |
| Salaries | 3.550.000 |
| Bonuses, mid-term-incentive (cash and equity-based) and other payments | 23.693.460 |
| Other remuneration1 | 761.999 |
| Total remuneration | 28.005.459 |
| 1 | Insurance premiums, payments in kind and taxes |
The Members of our Board of Managing Directors received as part of the mid-term-incentive share-based awards; the ultimate value of which to the members of the Board of Managing Directors will depend on the price of the Deutsche Bank share. The units of each portion of this share-based compensation are described below.
DB Equity Units. In respect of the 2003 performance year, we awarded an aggregate of 99,699 deferred share awards to members of our Board of Managing Directors. These shares are scheduled to be delivered on August 1, 2007.
Performance Options and Partnership Appreciation Rights. In respect of the 2003 performance year, we awarded an aggregate number of 114,880 Performance Options and 114,880 Partnership Appreciation Rights. The awards will each be exercisable in equal proportions of 38,293 units on February 1, 2006, February 1, 2007 and February 1, 2008, at an exercise price equal to 120% of the “reference price” as defined in note [20] to the consolidated financial statements.
In addition to the above amounts that we paid to members of the Board of Managing Directors in 2003, we paid former members of the Board of Managing Directors or their surviving dependents an aggregate of € 31,218,858. During 2003 we set aside nearly € 1.0 million for pension, retirement or similar benefits for our Board of Managing Directors.
For further information on the terms of our DB Global Partnership Plan, pursuant to which DB Equity Units, Performance Options and Partnership Appreciation Rights are issued, see Note [20] to the consolidated financial statements.
Pursuant to the service contracts we have entered into with each of the members of our Board of Managing Directors, the board members are entitled to receive certain transitional payments upon termination of their board membership. If a member is terminated other than for cause, he or she is entitled to receive a severance payment generally consisting of his or her base salary for the remaining term of the service contract, as well as an amount corresponding to the members¢s average annual bonus paid in the three years preceding the termination.
Our Board Members as of December 31, 2003 received the following remuneration for the year 2003:
| in € | Annual Cash Compensation | Equity-based MTI | ||
| Members of the Board | Salary | Cash Bonus/cash MTI | DB Equity Units | Performance Options1 |
| of Managing Directors | ||||
| Dr. Josef Ackermann | 1,150,000 | 6,570,500 | 42,519 | 48,993 |
| Dr. Clemens Börsig | 800,000 | 2,926,000 | 19,060 | 21,962 |
| Dr. Tessen v. Heydebreck | 800,000 | 2,926,000 | 19,060 | 21,962 |
| Hermann-Josef Lamberti | 800,000 | 2,926,000 | 19,060 | 21,962 |
| 1 | For each Performance Option a Partnership Appreciation Right is granted; for further details see Note [20] to the consolidated financial statements. |
| Members of the Board | Performance | Percentage of Total Options Outstanding | Strike | Expiration | Grant Date | Currently | Currently |
| of Managing Directors | Options | Price | Date | Present | Exer- | Unexer- | |
| Granted1 | in €1 | Value in € | cisable | cisable2 | |||
| Dr. Josef Ackermann | 48,993 | 0.19% | 76.61 | February 1, 2010 | 13.02 | – | 48,993 |
| Dr. Clemens Börsig | 21,962 | 0.08% | 76.61 | February 1, 2010 | 13.02 | – | 21,962 |
| Dr. Tessen v. Heydebreck | 21,962 | 0.08% | 76.61 | February 1, 2010 | 13.02 | – | 21,962 |
| Hermann-Josef Lamberti | 21,962 | 0.08% | 76.61 | February 1, 2010 | 13.02 | – | 21,962 |
| 1 | For each Performance Option a Partnership Appreciation Right is granted; for further details see Note [20] to the consolidated financial statements. |
| 2 | Mandatory holding period of two years from date of grant. |