Variable compensation comprises short- and / or long-term variable compensation components that reward specific and challenging financial as well as customer-related, qualitative objectives. These annually defined objectives are linked to the key drivers behind the Sunrise strategy (see Sunrise Strategy). The level of target-based and actual variable compensation is determined by the scope of the position, its external market value, the company’s business success as well as individual performance.
From a basic principle point of view and in regards to the Group Management Board members, the ratio of variable performance related compensation (Short-term Incentive and MLTIP) to fixed compensation (base salary, other benefits/cash allowances, social security and retirement benefits) ranges between 0% (no targets achieved) and 129% (maximum targets achieved). If targets are achieved at 100%, then the ratio is 55%.
Applying the same calculation methodology to the CEO, the ratio of variable performance-related compensation to fixed compensation ranges between 0% (no targets achieved) and 136% (maximum targets achieved). If targets are achieved at 100%, the ratio is 70%.