The Chairman’s Committee of the Supervisory Board has functional responsibility for determining the structure and size of the compensation of the members of the Board of Managing Directors. In particular, the Chairman’s Committee determines salaries and other compensation elements for the Board of Managing Directors.
We have entered into service agreements with members of our Board of Managing Directors. These agreements established the following two principal elements of compensation:
- Salary. The members of the Board of Managing Directors receive a salary which is disbursed in monthly installments. It is determined on the basis of an analysis of salaries paid to executive directors at a selected group of comparable international companies.
- 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.
- 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 a 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.
The aggregate remuneration, including performance-based compensation, earned by the members of our Board of Managing Directors for the year ended December 31, 2004 was € 25,101,614. This aggregate remuneration was comprised of the following:
| in € | 2004 |
| Salary | 3,550,000 |
| Bonuses, mid-term-incentive (cash and equity-based) | 20,901,900 |
| Other remuneration1 | 649,714 |
| Total remuneration | 25,101,614 |
| 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 Deutsche Bank shares. The units of each portion of this share-based compensation are described below.
- DB Equity Units. In February 2005, we awarded an aggregate of 138,713 deferred share awards to members of our Board of Managing Directors. These shares are scheduled to be delivered on August 1, 2008.
For further information on the terms of our DB Global Partnership Plan, pursuant to which DB Equity Units 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 member’s average annual bonus and MTI paid in the three years preceding the termination.
Our board members as of December 31, 2004 received the following remuneration for the year 2004:
| Members of the Board of Managing Directors | Annual cash compensation | Equity-based MTI | Total Compensation | ||
| in € | Salary | Cash bonus/cash MTI | Value of share-based awards* | ||
| Dr. Josef Ackermann | 1,150,000 | 5,016,000 | 3,915,000 | 10,081,000 | |
| Dr. Clemens Börsig | 800,000 | 2,235,300 | 1,755,000 | 4,790,300 | |
| Dr. Tessen v. Heydebreck | 800,000 | 2,235,300 | 1,755,000 | 4,790,300 | |
| Hermann-Josef Lamberti | 800,000 | 2,235,300 | 1,755,000 | 4,790,300 | |
| * | The number of DB Equity Units granted to each member was determined by dividing such euro amounts by € 66.18, the closing price of our shares on the grant date (February 1, 2005). The number of DB Equity Units granted to each member was as follows: Dr. Josef Ackermann 59,157, Dr. Clemens Börsig 26,519, Dr. Tessen v. Heydebreck 26,519, and Hermann-Josef Lamberti 26,519. |
In addition to the above amounts that we paid to members of the Board of Managing Directors in 2004, we paid former members of the Board of Managing Directors or their surviving dependents an aggregate of € 17,918,080 in 2004. During 2004 we set aside € 1,087,064 for pension, retirement or similar benefits for our Board of Managing Directors.
