Compensation report for the Executive Board and the Supervisory Board of Aurubis AG

The following compensation report is part of the Combined Management Report. It outlines the structure and level of Aurubis AG’s Executive Board and Supervisory Board compensation.

Compensation for the Executive Board

The Supervisory Board defines the total compensation for the individual Executive Board members on the basis of proposals from the Personnel Committee, and decides on and reviews the compensation system for the Executive Board at regular intervals.

The principle of the compensation provisions is to orient the Executive Board’s contracts more strongly to long-term corporate development.

The compensation of individual Executive Board members is defined in their employment contracts and consists of a series of components, comprising fixed compensation, variable compensation, fringe benefits and pension plans.

The various compensation components are as follows: the compensation of Executive Board members is made up of fixed and variable components. The fixed parts consist of fixed compensation, fringe benefits and pension plans. The annual fixed compensation amounts to € 570,000 for the Chief Executive Officer and € 399,000 for the ordinary members of the Executive Board and is paid out monthly in equal installments. In the past fiscal year, Dr. Drouven (Executive Board Chairman until October 31, 2015) received fixed compensation of € 47,500. As Executive Board Chairman from July 1, 2016 to September 30, 2016, Mr. Jürgen Schachler earned fixed compensation of € 142,500. Because Mr. Erwin Faust (Executive Board Spokesman from November 1, 2015 to June 30, 2016) and Dr. Stefan Boel assumed additional responsibilities in the Executive Board on an interim basis during the period mentioned, they received special compensation in addition to their fixed compensation of € 399,000 each. This special compensation amounted to € 120,000 for Mr. Faust and € 105,000 for Dr. Boel.

In addition, the Executive Board members receive fringe benefits in the form of benefits in kind, mainly comprising the value of insurance premiums in accordance with the tax guidelines, and the use of a company car. The individual Executive Board members must pay tax on these fringe benefits as components of their compensation.

The system for variable compensation consists of two components, which are paid out each year. The first component (Component 1) is dependent on achieving an annual target related to adjusted average consolidated EBT (earnings before taxes of the Group) of three years, in each case related to the current and the two prior fiscal years before the respective fiscal year. The target is EBT derived from ROCE of 15 %. The target bonus of Component 1 amounts to about 60 % of the variable compensation in relation to Component II and can reach a cap of 100 %. If EBT is less than 40 % of the target, Component 1 will not be paid. The maximum amount that can be reached from these components is € 712,500 for the Chief Executive Officer and € 475,000 for ordinary members of the Executive Board.

Component II stipulates that an annual assessment of the joint (Component II a) and individual (Component II b) performance of the Executive Board will be carried out by the Supervisory Board. Both components are based on a qualitative, criteria-supported assessment of the long-term Company management.

The target bonus of Component II has a cap of 100 %. At least 50 % of the target bonus is always paid out unless the granting of same would be unreasonable in the sense of Section 87 (2) German Stock Corporation Act (AktG). The maximum amount to be reached from Components II a and II b amounts to € 237,500 for the Chief Executive Officer and € 166,250 for each of the ordinary members of the Executive Board.

Mr. Faust has a defined benefit pension plan. The pension benefits are determined as a percentage of the fixed compensation. The percentage increases based on the length of service on the Board. The pension is payable once the Executive Board member reaches the age of 65 or in the event of his disability.

Mr. Schachler and Dr. Boel have a defined contribution pension plan, for which an amount of € 140,000 is paid for Mr. Schachler and € 100,000 is paid for Dr. Boel to an insurance company each year.

The employment contracts of Executive Board members include no change of control clauses. In the event of non-renewal of his Executive Board contract, Mr. Faust will, under certain conditions, receive an early retirement pension. These conditions are fulfilled if the Executive Board member has completed at least five years of service as an Executive Board member at Aurubis AG and is at least 55 years old. Dr. Drouven fulfilled these conditions during his previous Executive Board membership and received a pension. These claims were put on hold during his dispatch from the Supervisory Board to the Executive Board. The assessment basis for the pension increased slightly due to his new Executive Board membership.

Pensions paid to Executive Board members before they reach 65 years of age have the character of an interim payment. Compensation paid to an Executive Board member for activities outside the Aurubis Group after termination of his contract is offset against the pension until he reaches the age of 65.

All members of the Executive Board also have a defined contribution company pension plan. This pension plan is based on a lump-sum single payment. At the end of each fiscal year, € 120,000 for the Chief Executive Officer and € 80,000 for the other three Executive Board members is paid into liability insurances.

Each Executive Board member may use the accumulated capital at the earliest when he has reached 60 years of age, but not before ceasing to be employed by the Company.

The total compensation paid to active members of the Executive Board for activities in fiscal year 2015/16 amounted to € 3,325,289 including pension expenses.

The following table provides details of the compensation of the individual members:

Benefits granted

T 002
 
in €   Fixed compensation Fringe
benefits
Total Variable compensation for one year Variable compensation for several years Total Pension expenses 1) Total compensation
                   
Jürgen Schachler 2014/15 0 0 0 0 0 0 0 0
Executive Board Chairman 2015/16 2) 142,500 3,465 145,965 118,750 157,106 421,821 260,000 681,821
starting July 1, 2016 Min. 142,500 3,465 145,965 59,375 0 205,340 260,000 465,340
  Max. 142,500 3,465 145,965 118,750 178,125 442,840 260,000 702,840
Dr. Stefan Boel 2014/15 378,000 17,813 395,813 275,625 90,450 761,888 160,000 921,888
Executive Board member 2015/16 399,000 18,177 417,177 332,500 4) 418,950 1,168,627 180,000 1,348,627
since April 19, 2008 Min. 399,000 18,177 417,177 166,250 0 583,427 180,000 763,427
  Max. 399,000 18,177 417,177 332,500 475,000 1,224,677 180,000 1,404,677
Erwin Faust 2014/15 378,000 18,365 396,365 275,625 90,450 762,440 310,852 1,073,292
Executive Board member 2015/16 399,000 19,139 418,139 332,500 4) 418,950 1,169,589 321,506 1,491,095
since October 1, 2008 Min. 399,000 19,139 418,139 166,250 0 584,389 321,506 905,895
  Max. 399,000 19,139 418,139 332,500 475,000 1,225,639 321,506 1,547,145
Dr. Bernd Drouven 2014/15 495,000 4,112 499,112 360,938 124,369 984,419 110,000 1,094,419
Executive Board Chairman 2015/16 3) 47,500 1,042 48,542 39,583 52,369 140,494 10,000 150,494
from November 1, 2014 to Min. 47,500 1,042 48,542 19,792 0 68,334 10,000 78,334
October 31, 2015 Max. 47,500 1,042 48,542 39,583 59,375 147,500 10,000 157,500
Total 2014/15 1,251,000 40,290 1,291,290 912,188 305,269 2,508,747 580,852 3,089,599
  2015/16 988,000 41,823 1,029,823 823,333 1,047,375 2,900,531 771,506 3,672,037
  Min. 988,000 41,823 1,029,823 411,667 0 1,441,490 771,506 2,212,996
  Max. 988,000 41,823 1,029,823 823,333 1,187,500 3,040,656 771,506 3,812,162
    
1) Pension expenses in accordance with the German Commercial Code (HGB) amounted to € 230,041 (previous year: € 429,361) for Erwin Faust, € 180,000 (previous year: € 160,000) for Dr. Stefan Boel, € 10,000 (previous year: € 232,607) for Dr. Bernd Drouven and € 260,000 for Jürgen Schachler.
2) Variable compensation for the period from July 1, 2016 to September 30, 2016.
3) Due to Dr. Drouven’s departure, the table shows 1/12 of the compensation previously granted.
4) Mr. Erwin Faust (Executive Board Spokesman from November 1, 2015 to June 30, 2016) and Dr. Stefan Boel assumed additional Executive Board responsibilities on an interim basis during the period mentioned. As a result, they received additional special compensation amounting to € 120,000 for Mr. Faust and € 105,000 for Dr. Boel. The variable compensation for several years for fiscal year 2015/16 is calculated according to the ratio of actual EBT to the target EBT of the Aurubis Group and the average of fiscal years 2013/14, 2014/15 and 2015/16. The average actual EBT amounts to € 231 million, a 66 % target achievement.

Inflow

T 003
 
in €   Fixed compensation Fringe
 benefits
Total Variable compensation for one year Variable compensation for several years Total Pension expenses 1) Total compensation
                   
Jürgen Schachler                  
Executive Board Chairman 2014/15 0 0 0 0 0 0 0 0
starting July 1, 2016 2015/16 2) 142,500 3,465 145,965 118,750 117,563 382,278 260,000 642,278
Dr. Stefan Boel                  
Executive Board member 2014/15 378,000 17,813 395,813 295,313 230,400 921,526 160,000 1,081,526
since April 19, 2008 2015/16 399,000 18,177 417,177 290,938 4) 313,500 1,021,615 180,000 1,201,615
Erwin Faust                  
Executive Board member 2014/15 378,000 18,365 396,365 295,313 230,400 922,078 310,852 1,232,930
since October 1, 2008 2015/16 399,000 19,139 418,139 290,938 4) 313,500 1,022,577 321,506 1,344,083
Dr. Bernd Drouven                  
Executive Board Chairman 2014/15 495,000 4,112 499,112 412,500 316,800 1,228,412 110,000 1,338,412
from November 1, 2014 to October 31, 2015 2015/16 3) 47,500 1,042 48,542 39,583 39,188 127,313 10,000 137,313
Total 2014/15 1,251,000 40,290 1,291,290 1,003,126 777,600 3,072,016 580,852 3,652,868
  2015/16 988,000 41,823 1,029,823 740,209 783,751 2,553,783 771,506 3,325,289
    
1) Pension expenses in accordance with the German Commercial Code (HGB) amounted to € 230,041 (previous year: € 429,361) for Erwin Faust, € 180,000 (previous year: € 160,000) for Dr. Stefan Boel, € 10,000 (previous year: € 232,607) for Dr. Bernd Drouven and € 260,000 for Jürgen Schachler.
2) Variable compensation for the period from July 1, 2016 to September 30, 2016.
3) Due to Dr. Drouven’s departure, the table shows 1/12 of the compensation previously granted.
4) Mr. Erwin Faust (Executive Board Spokesman from November 1, 2015 to June 30, 2016) and Dr. Stefan Boel assumed additional Executive Board responsibilitieson an interim basis during the period mentioned. As a result, they received additional special compensation amounting to € 120,000 for Mr. Faust and € 105,000 for Dr. Boel. The variable compensation for several years for fiscal year 2015/16 is calculated according to the ratio of actual EBT to the target EBT of the Aurubis Group and the average of fiscal years 2013/14, 2014/15 and 2015/16. The average actual EBT amounts to € 231 million, a 66% target achievement.

Dr. Schneider resigned from the Executive Board on June 30, 2015. The termination agreement foresaw a lump-sum compensation, which included the fixed compensation until April 30, 2016 as well as the variable compensation for fiscal year 2014/15 and the proportional variable compensation for fiscal year 2015/16. The payout was in January 2016. The contributions to the additional defined contribution company pension plan were paid until April 30, 2016.

The Company has set up pension provisions on the basis of IFRS for the Executive Board members. Allocations to the pension provisions for active members of the Executive Board in the year under review amounted to € 771,506. This amount comprises the service cost and contributions to an external pension fund.

Former members of the Executive Board and their surviving dependents received a total of € 2,210,800, while € 24,608,243 has been provided for their pension entitlement.

Compensation for the Supervisory Board

The compensation paid to the Supervisory Board was established at the Annual General Meeting. It went into effect on October 1, 2015 and is covered by Section 12 of Aurubis AG’s Articles of Association. It is based on the different workloads in the Supervisory Board and its committees.

In addition to the reimbursement of expenses incurred while carrying out his/her office, each member of the Supervisory Board receives a fixed fee of € 75,000 per fiscal year. The Chairman of the Supervisory Board receives three times this amount and his deputy twice this amount.

Supervisory Board members who belong to the Personnel Committee or the Audit Committee of the Supervisory Board receive additional fixed compensation of € 15,000 per fiscal year and committee. Supervisory Board members who belong to the other Supervisory Board committees receive additional fixed compensation of € 7,500 per fiscal year and committee. Supervisory Board members who serve as a Supervisory Board committee chairman receive double this amount per fiscal year and committee chairmanship.

The fixed compensation for committee work is limited to € 25,000 per fiscal year for each Supervisory Board member pursuant to Section 12 (2) Articles of Association. The limit for each committee chairman amounts to € 50,000 per fiscal year.

Supervisory Board members who do not serve a complete fiscal year on the Supervisory Board or one of its committees receive compensation corresponding to the duration of their office.

Furthermore, Supervisory Board members receive an attendance fee of € 1,000 for each meeting of the Supervisory Board and of its committees attended.

The following table provides details of the compensation of the individual members of the Supervisory Board for fiscal year 2015/16:

T 004
in €
Name   Fixed compensation Variable compensation Compensation for committee membership Attendance fees Total
             
Prof. Dr.-Ing Heinz Jörg Fuhrmann 2014/15 80,000 60,000 20,000 5,000 165,000
  2015/16 225,000 0 50,000 10,000 285,000
Renate Hold-Yilmaz 2014/15 40,000 30,000 10,000 5,000 85,000
  2015/16 149,795 0 25,000 14,000 188,795
Burkhard Becker 2014/15 40,000 30,000 10,000 4,000 84,000
  2015/16 75,000 0 22,500 10,000 107,500
Dr. Bernd Drouven 2014/15 3,397 2,548 425 0 6,370
  2015/16 68,648 0 20,595 8,000 97,243
Dr. Joachim Faubel 2014/15 40,000 30,000 0 2,500 72,500
  2015/16 75,000 0 0 5,000 80,000
Jan Koltze 2014/15 40,000 30,000 5,000 4,000 79,000
  2015/16 75,000 0 15,000 10,000 100,000
Dr. Sandra Reich 2014/15 40,000 30,000 5,000 1,000 76,000
  2015/16 75,000 0 7,500 6,000 88,500
Dr. Thomas Schultek 2014/15 40,000 30,000 5,000 5,000 80,000
  2015/16 75,000 0 21,865 10,000 106,865
Rolf Schwertz 2014/15 40,000 30,000 0 2,500 72,500
  2015/16 75,000 0 0 6,000 81,000
Prof. Dr. Fritz Vahrenholt 2014/15 40,000 30,000 10,000 5,000 85,000
  2015/16 75,000 0 22,500 7,000 104,500
Ralf Winterfeldt 2014/15 0 0 0 0 0
  2015/16 75,000 0 22,439 8,000 105,439
Dr.-Ing. Ernst J. Wortberg 2014/15 40,000 30,000 15,000 4,000 89,000
  2015/16 75,000 0 37,500 10,000 122,500
Total 2014/15 443,397 332,548 80,425 38,000 894,370
  2015/16 1,118,443 0 244,899 104,000 1,467,342

On this basis, the Supervisory Board members received a total of € 1,467,342.

Hamburg, December 13, 2016

The Executive Board

Photo: Signature Jürgen Schachler

Jürgen Schachler
(Chairman)

Photo: Signature Dr. Stefan Boel

Dr. Stefan Boel
(Member)

 

The Supervisory Board

Photo: Signature Prof. Dr.-Ing. Heinz Jörg Fuhrmann

Prof. Dr.-Ing. Heinz Jörg Fuhrmann
(Chairman)