Board of Management Remuneration

The remuneration of the members of the Board of Management conforms to the requirements of the Aktiengesetz (AktG – German Stock Corporation Act) and to most of the recommendations set out in the German Corporate Governance Code. In particular, the remuneration structure is focused on ensuring sustainable business growth in accordance with the Gesetz zur Angemessenheit der Vorstandsvergütung (VorstAG – German Act on the Appropriateness of Executive Board Remuneration) (section 87(1) of the AktG). The new recommendations of the Code as issued on June 18, 2009 in article 4.2.3(2) sentences 2 and 3 (comparison parameters for variable compensation) are being implemented.

The remuneration of the Board of Management comprises fixed and variable components. The fixed components of the package ensure firstly a basic level of remuneration enabling the individual members of the Board of Management to perform their duties in the interests of the Company and to fulfill their obligation to act with proper business prudence without needing to focus on merely short-term performance targets. On the other hand, variable components, dependent among other criteria on the financial performance of the Company, serve to ensure the long-term impact of behavioral incentives.

In fiscal year 2009, the members of the Board of Management received fixed remuneration totaling €5,623,917 (previous year: €5,346,622). The fixed remuneration also includes differing levels of remuneration for the assumption of appointments at Group companies as well as noncash benefits, particularly of the use of company cars and the grant of insurance cover. Taxes due on the noncash benefits were mainly borne by Volkswagen AG.




















Martin Winterkorn









Francisco Javier Garcia Sanz









Jochem Heizmann









Horst Neumann









Hans Dieter Pötsch



























The variable remuneration comprises a bonus, which relates to business performance over the previous two years, and, starting in 2010, a Long-Term Incentive plan (LTI), which is based on the previous four fiscal years. The bonus amount is primarily oriented on the results achieved and the financial position of the Company.

The variable remuneration system with a long-term incentive component was discontinued in its previous form when all members of the Board of Management exercised the conversion rights granted to them under the stock option plan at the end of 2008. The Supervisory Board therefore adopted a new performance-related remuneration component, the LTI, at its meeting on November 20, 2009.

The amount of this variable remuneration component depends on the achievement of the targets laid down in the “Strategy 2018”. The specific target areas are as follows:

  • Top customer satisfaction, measured using the Customer Satisfaction Index,
  • Top employer, measured using the Employee Index,
  • Unit sales growth, measured using the Growth Index and
  • Increase in the return on sales, measured using the Return Index.

The Customer Satisfaction Index is calculated using indicators that quantify the overall satisfaction of our customers with the delivering dealers, new vehicles and the service operations based on the last workshop visit.

The Employee Index is determined using the “employment” and “productivity” indicators as well as the participation rate and results of employee surveys (“opinion surveys”).

The Growth Index is calculated using the “deliveries to customers” and “market share” indicators.

The indices on customer satisfaction, employees and unit sales are aggregated and the result is multiplied by the Return Index, which is derived from the return on sales trend. This ensures that the LTI is only paid out if the Group is financially successful. If the 1.5% threshold for the return on sales is not exceeded, the Return Index is zero. This would mean that the overall index for the fiscal year concerned is also zero.

Each fiscal year, the Supervisory Board sets the amount of the LTI on the basis of the four-year average of the overall indices. The LTI will be calculated and paid to the Board of Management for the first time in 2011 for fiscal year 2010 using an introductory scenario and on the basis of the likely performance for 2011. The performance for fiscal years 2010 and 2011 will be reflected in the calculation in 2012, and the performance for 2010 to 2012 will be reflected in the calculation in 2013. From 2014 onwards, the past four years will be used as a basis for analysis.

The Supervisory Board may cap the variable remuneration components in the event of extraordinary business developments.

Since the declaration of conformity with the German Corporate Governance Code was issued on November 20, 2009, a severance payment cap has been agreed in accordance with the German Corporate Governance Code when entering into Board of Management contracts.


In the event of termination of their service on the Board of Management, the members of the Board of Management are entitled to a pension and to a surviving dependents’ pension as well as the use of company cars for the period in which they receive their pension.

The following rule applies to Board of Management contracts entered into before August 5, 2010: the old-age pension to be granted after leaving the Company is payable immediately if their membership of the Board of Management is terminated by the Company, and in other cases on reaching the age of 63. Any remuneration received from other sources until the age of 63 is deductible from the benefit entitlement up to a certain fixed amount.

The following rule applies to Board of Management contracts entered into after August 5, 2010 and to future contracts: the old-age pension to be granted after leaving the Company is payable on reaching the age of 63.

The old-age pension is calculated as a percentage of the fixed basic salary, which accounts for most of the fixed individual remuneration of the Board of Management shown in the table above. Starting at 50%, the individual percentage increases by two percentage points for each year of service up to the maximum of 70% defined by the Presidium of the Supervisory Board. Mr. Winterkorn and Mr. Garcia Sanz have an old-age pension entitlement of 70%, Mr. Heizmann of 66% and Mr. Neumann and Mr. Pötsch of 64% of their fixed basic salaries as of the end of 2009.

The members of the Board of Management are entitled to payment of their normal remuneration for six months in the event of illness and to the retirement pension in the event of disability. Surviving dependents receive a widows’ pension of 66 2/3% and orphans’ benefits of 20% of the former member of the Board of Management’s pension.

On December 31, 2009 the pension obligations for members of the Board of Management in accordance with IAS 19 amounted to €43,805,628 (previous year: €32,732,521). Current pensions are index-linked in accordance with the index-linking of the highest collectively agreed salary insofar as the application of section 16 of the Gesetz zur Verbesserung der betrieblichen Altersversorgung (BetrAVG – German Company Pension Act) does not lead to a larger increase.

Retired members of the Board of Management and their surviving dependents received €8,252,535 (previous year: €8,269,973). Obligations for pensions for this group of persons were recognized in the amount of €106,679,193 (previous year: €102,789,267).

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