Board of Management Remuneration

(Part of the Group Management Report)

This chapter describes the main elements of the remuneration system for the Board of Management. In addition, the Remuneration Report details the individualized remuneration of the Board of Management and the Supervisory Board, broken down into components, as well as individualized pension provision disclosures for the members of the Board of Management.

PRINCIPLES OF BOARD OF MANAGEMENT REMUNERATION

Matters involving the remuneration system and the total remuneration of each individual member of the Volkswagen AG Board of Management are decided on by the Supervisory Board on the basis of the Executive Committee’s recommendations.

At the beginning of 2017, the Supervisory Board of Volkswagen AG resolved to adjust the remuneration system of the Board of Management with effect from January 1, 2017. The system for remuneration of the Board of Management was approved by the Annual General Meeting on May 10, 2017 with 80.96% of the votes cast. The adjustment, in which the Supervisory Board was assisted by renowned, independent external remuneration and legal consultants, resulted in an alignment with the Group strategy. In addition to the statutory requirements of the Aktiengesetz (AktG – German Stock Corporation Act), the Supervisory Board took into account the recommendations of the German Corporate Governance Code (the Code) in the version dated February 7, 2017 in the existing remuneration system. In particular, the remuneration structure is focused on ensuring sustainable business development. The Supervisory Board revised the remuneration system for the members of the Board of Management in fiscal year 2020 and adopted the enhanced remuneration system on December 14, 2020 with effect from January 1, 2021. The enhanced remuneration system implements the requirements of the AktG as amended by the German Act on the Implementation of the Second Shareholders’ Rights Directive (ARUG II – Gesetz zur Umsetzung der zweiten Aktionärsrechterichtlinie) and takes into account the recommendations of the Code in the version dated December 19, 2019 (that took effect on March 20, 2020). The Supervisory Board will submit the revised remuneration system to the Annual General Meeting for approval in 2021 in line with the requirements of the AktG as amended by the ARUG II. For Board of Management members already appointed, substantial parts of the enhanced remuneration system will apply from January 1, 2021. The remainder of the enhanced remuneration system will apply from the time of reappointment and for first time appointees to the Board of Management. The enhanced remuneration system particularly implements environmental, social and governance targets (ESG targets), introduces penalty and clawback rules for variable remuneration components and extends the assessment period for performance share plans to four years.

The level of the Board of Management remuneration should be appropriate and attractive in the context of the Company’s national and international peer group. Criteria include the tasks of the individual Board of Management member, their personal performance, the economic situation, and the performance of and outlook for the Company, as well as how customary the remuneration is when measured against the peer group and the remuneration structure that applies to other areas of Volkswagen. In this context, comparative studies on remuneration are conducted on a regular basis.

COMPONENTS OF BOARD OF MANAGEMENT REMUNERATION

In this chapter, we provide an overview of the Board of Management’s remuneration system in the reporting year before going into the components of the remuneration for the reporting period.

Overview of the remuneration system

The remuneration system of the Board of Management comprises non-performance-related and performance-related components. The performance-related remuneration consists of an annual bonus with a one-year assessment period and a long-term incentive (LTI) in the form of a performance share plan with a forward-looking three-year term. The performance share plan is linked to business development in the next three years and is thus based on a multiyear, forward-looking assessment that reflects both positive and negative developments. The non-performance-related component creates an incentive for individual members of the Board of Management to perform their duties in the best 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. The performance-related components, dependent among other criteria on the financial performance of the Company, serve to ensure the long-term impact of behavioral incentives.

If 100% of the targets agreed with each of the members of the Board of Management are achieved, the annual target remuneration for each member will amount to a total of €4,500,000 (corresponding to a fixed remuneration of €1,350,000, a target amount from the annual bonus of €1,350,000 and a target amount from the performance share plan of €1,800,000). The annual target remuneration for the Chairman of the Board of Management amounts to a total of €9,000,000 (fixed remuneration of €2,125,000, a target amount from the annual bonus of €3,045,000, and a target amount from the performance share plan of €3,830,000).

Board of Management members who also have duties as members of other corporate bodies within the Volkswagen Group generally do not receive separate remuneration for these.

Annual minimum remuneration of €3.5 million (sum of fixed remuneration, annual bonus, LTI and any special payments) was contractually agreed with Mr. Sommer. This applied pro rata for fiscal year 2020 due to his departure from the Board of Management.

Non-performance-related remuneration

The non-performance-related remuneration comprises fixed remuneration and fringe benefits. The fringe benefits result from noncash benefits and include in particular the use of operating assets such as company cars and the payment of insurance premiums. Taxes due on these noncash benefits are mainly borne by Volkswagen AG.

The fixed level of remuneration is reviewed regularly and adjusted if necessary.

Mr. Duesmann received compensation of entitlements lost due to his change of employer in the amount of €7.3 million.

Performance-related remuneration

The performance-related/variable remuneration consists of an annual performance-related bonus with a one-year assessment period and a long-term incentive (LTI) in the form of a performance share plan with a forward-looking three-year term (long-term incentive components). The components of performance-related/variable remuneration reflect both positive and negative developments.

Annual bonus

The annual bonus is based upon the result for the respective fiscal year. Operating profit achieved by the Volkswagen Group plus the proportionate operating profit of the Chinese joint ventures form half of the basis for the annual bonus, with operating return on sales achieved by the Volkswagen Group making up the second half. Each of the two components of the annual bonus are only payable if certain thresholds are reached or exceeded.

The calculated payment amount may be individually reduced by up to 20% (multiplier of 0.8) or increased by up to 20% (multiplier of 1.2) by the Supervisory Board, taking into account the degree of achievement of individual targets agreed between the Supervisory Board and the respective member of the Board of Management, as well as the success of the full Board of Management in transforming the Volkswagen Group by transferring employees to new areas of activity.

The payment amount for the annual bonus is capped at 180% of the target amount for the annual bonus. The cap arises from 150% of the maximum financial target achievement and a performance factor of a maximum of 1.2. For fiscal year 2020, the Supervisory Board has established the performance factor of 1.2 for existing Board of Management members. This was primarily due to the Board of Management members’ outstanding pandemic management and the fact that complete attainment of the transformation target would have been expected under non-pandemic-related conditions.

The annual bonus is payable following approval of the consolidated financial statements for the respective financial year. Deferral is generally not allowed.

CALCULATION OF THE PAYMENT AMOUNT FOR THE ANNUAL BONUS

COMPONENT 1: OPERATING RESULT INCLUDING CHINESE JOINT VENTURES (PROPORTIONATE)

€ billion

 

2019

 

2020

 

 

 

 

 

Maximum threshold

 

25.0

 

25.0

100% level of target

 

17.0

 

17.0

Minimum threshold

 

9.0

 

9.0

Actual

 

21.4

 

13.3

Target achievement (in %)

 

127

 

53

COMPONENT 2: OPERATING RETURN ON SALES

%

 

2019

 

2020

 

 

 

 

 

Maximum threshold

 

8.0

 

8.0

100% level of target

 

6.0

 

6.0

Minimum threshold

 

4.0

 

4.0

Actual

 

6.7

 

4.3

Target achievement (in %)

 

118

 

58

Performance share plan – long-term incentive (LTI)

The LTI is granted to the Board of Management annually in the form of a performance share plan. Each performance period of the performance share plan has a term of three years. At the time the LTI is granted, the annual target amount under the LTI is converted on the basis of the initial reference price of Volkswagen’s preferred shares into performance shares of Volkswagen AG, which are allocated to the respective member of the Board of Management purely for calculation purposes. The conversion is performed based on the unweighted average of the closing prices of Volkswagen’s preferred shares for the last 30 trading days preceding January 1 of a given fiscal year. At the end of each year, the number of performance shares is determined definitively for one-third of the three-year performance period based on the degree of target achievement for the annual earnings per Volkswagen preferred share (EPS – earnings per share per preferred share in €). A prerequisite for this is that a threshold is reached.

EPS PERFORMANCE MEASUREMENT
EPS performance measurement (graphic)

PERFORMANCE PERIOD 2017–2019

 

2017

 

2018

 

2019

 

 

 

 

 

 

 

Maximum threshold

 

30.0

 

30.0

 

30.0

100% level of target

 

20.0

 

20.0

 

20.0

Minimum threshold

 

10.0

 

10.0

 

10.0

Actual

 

22.69

 

23.63

 

26.66

Target achievement (in %)

 

113

 

118

 

133

PERFORMANCE PERIOD 2018–2020

 

2018

 

2019

 

2020

 

 

 

 

 

 

 

Maximum threshold

 

30.0

 

30.0

 

30.0

100% level of target

 

20.0

 

20.0

 

20.0

Minimum threshold

 

10.0

 

10.0

 

10.0

Actual

 

23.63

 

26.66

 

16.66

Target achievement (in %)

 

118

 

133

 

83

PERFORMANCE PERIOD 2019–2021

 

2019

 

2020

 

 

 

 

 

Maximum threshold

 

30.0

 

30.0

100% level of target

 

20.0

 

20.0

Minimum threshold

 

10.0

 

10.0

Actual

 

26.66

 

16.66

Target achievement (in %)

 

133

 

83

PERFORMANCE PERIOD 2020–2022

 

2020

 

 

 

Maximum threshold

 

30.0

100% level of target

 

20.0

Minimum threshold

 

10.0

Actual

 

16.66

Target achievement (in %)

 

83

After the end of the three-year term of the performance share plan, a cash settlement takes place. The payment amount corresponds to the final number of determined performance shares, multiplied by the closing reference price at the end of the three-year period plus a dividend equivalent for the relevant term. The closing reference price is the unweighted average of the closing prices for Volkswagen’s preferred shares for the 30 trading days preceding the last day of the three-year performance period. The dividend equivalent corresponds to the dividends distributed during the holding period on a genuine Volkswagen preferred share.

The performance share plan is focused exclusively on cash payment. Stock options are not part of the Volkswagen AG remuneration system. Consequently, there is no obligation to hold shares for members of the Board of Management.

 

 

PERFORMANCE-PERIOD

1

Determined at the end of the performance period.

 

 

2017 – 2019

 

2018 – 2020

 

2019 – 2021

 

2020 – 2022

 

 

 

 

 

 

 

 

 

Initial reference price

 

127.84

 

169.42

 

147.08

 

177.44

Closing reference price

 

177.44

 

149.14

 

1

 

1

Dividend equivalent

 

 

 

 

 

 

 

 

2017

 

2.06

 

 

 

2018

 

3.96

 

3.96

 

 

2019

 

4.86

 

4.86

 

4.86

 

2020

 

 

4.86

 

4.86

 

4.86

The payment amount under the performance share plan is limited to 200% of the target amount. The payment amount is reduced by 20% if the average ratio of capex to sales revenue or the R&D ratio in the Automotive Division of the last three years is smaller than 5%. The Supervisory Board may cap the LTI in the event of extraordinary developments.

If the employment contract of a member of the Board of Management concludes prior to the end of the performance period due to extraordinary termination based on good cause, or if the member of the Board of Management starts working for a competitor (also referred to as “bad-leaver cases”), the non-vested performance shares will expire. For members of the Board of Management who held their seat as of December 31, 2016, this rule only applies in the event of a reappointment or new appointment.

In connection with the appointment of the Chairman of the Board of Management, the employment contract of Mr. Diess was terminated by mutual agreement in 2018 and a new employment contract was entered into, whereby the expiry rule described above applies from the 2018 to 2020 performance period onwards. In connection with the reappointment of Mr. Witter, the expiry rule applies from the 2020 to 2022 performance period onwards.

In the introductory phase of the performance share plan, the members of the Board of Management who were Board members as of December 31, 2016 generally received advances of 80% of their target amount for the 2017 to 2019 and 2018 to 2020 performance periods. Mr. Blume receives corresponding advances for the performance periods 2018 to 2020 (proportionate) and 2019 to 2021. The two advances will each be paid after the first year of the performance period. Final settlement is based on actual achievement of targets at the end of the relevant three-year performance period.

CALCULATION OF THE PAYMENT AMOUNT FROM THE PERFORMANCE SHARE PLAN

INFORMATION ON THE PERFORMANCE SHARES

 

 

PERFORMANCE-PERIOD 2017 – 2019

 

PERFORMANCE-PERIOD 2018 – 2020

 

PERFORMANCE-PERIOD 2019 – 2021

 

PERFORMANCE-PERIOD 2020 – 2022

 

Number of performance shares allocated at the grant date

 

Number of performance shares allocated at the grant date

 

Number of performance shares allocated at the grant date

 

Fair value at the grant date

 

Number of performance shares allocated at the grant date

 

Fair value at the grant date

 

 

 

 

 

 

 

 

 

 

 

 

 

Herbert Diess

 

14,080

 

19,212

 

26,040

 

3,350,046

 

21,585

 

3,584,837

Oliver Blume

 

 

7,614

 

12,238

 

1,574,419

 

10,144

 

1,684,716

Markus Duesmann (since April 1, 2020)

 

 

 

 

 

7,608

 

1,088,933

Gunnar Kilian

 

 

7,614

 

12,238

 

1,574,419

 

10,144

 

1,684,716

Andreas Renschler (until July 15, 2020)

 

14,080

 

10,624

 

12,238

 

1,574,419

 

5,495

 

912,610

Abraham Schot (until March 31, 2020)

 

 

 

12,238

 

1,574,419

 

2,536

 

421,179

Stefan Sommer (until June 30, 2020)

 

 

3,541

 

12,238

 

1,574,419

 

 

Hiltrud Dorothea Werner

 

12,907

 

10,624

 

12,238

 

1,574,419

 

10,144

 

1,684,716

Frank Witter

 

14,080

 

10,624

 

12,238

 

1,574,419

 

10,144

 

1,684,716

Total

 

55,147

 

69,853

 

111,706

 

14,370,977

 

77,800

 

12,746,420

 

Provision as of Dec. 31, 2020

 

Intrinsic value as of Dec. 31, 2020

 

Compre­hen­sive income 2020 arising from perfor­mance shares

 

Provision as of Dec. 31, 2019

 

Intrinsic value as of Dec. 31, 2019

 

Compre­hen­sive income 2019 arising from perfor­mance shares

 

 

 

 

 

 

 

 

 

 

 

 

 

Herbert Diess

 

6,019,320

 

2,060,142

 

4,300,115

 

3,504,374

 

3,687,200

 

3,490,713

Oliver Blume

 

775,860

 

355,226

 

1,231,600

 

984,260

 

 

1,614,937

Markus Duesmann (since April 1, 2020)

 

321,159

 

 

321,159

 

 

 

Gunnar Kilian

 

3,247,860

 

1,387,226

 

1,231,600

 

2,016,260

 

 

1,614,937

Andreas Renschler (until July 15, 2020)

 

3,351,992

 

3,351,992

 

−235,112

 

5,572,774

 

3,879,394

 

1,713,961

Abraham Schot (until March 31, 2020)

 

2,398,671

 

2,398,671

 

110,408

 

3,925,694

 

 

3,925,694

Stefan Sommer (until June 30, 2020)

 

 

 

−707,720

 

1,415,440

 

 

1,317,674

Hiltrud Dorothea Werner

 

4,025,798

 

1,935,604

 

1,963,018

 

5,019,403

 

2,782,969

 

2,852,956

Frank Witter

 

3,550,948

 

2,501,995

 

−1,644,971

 

6,981,087

 

3,879,394

 

2,054,256

Total

 

23,691,608

 

13,990,856

 

6,570,097

 

29,419,292

 

14,228,957

 

18,585,127

The number of performance shares equals the provisional performance shares allocated at the grant date of the performance share plan. The fair value as at the grant date was determined using a recognized valuation technique.

To determine the amount of the obligation, the provisional performance shares determined or allocated for the performance periods 2018 to 2020, 2019 to 2021 and 2020 to 2022 were taken into account. The intrinsic value of the obligation was calculated in accordance with IFRS 2 and corresponds to the amount that the members of the Board of Management would have received if they had stepped down on December 31, 2020. Only the nonforfeitable (vested) performance shares at the reporting date are included in the calculation. The intrinsic value was calculated based on the unweighted average share price for the last 30 trading days (Xetra closing prices of Volkswagen’s preferred shares) preceding December 31, 2020, taking the dividends paid per preferred share during the performance period into account. The net value of all amounts recognized in income for the performance shares in fiscal year 2020 is recorded in “Comprehensive income 2020 arising from performance shares” according to the IFRSs. Those members who left during the year were shown pro rata.

Phantom preferred shares

The phantom preferred shares for the remuneration withheld for 2015 formed part of the Board of Management remuneration until they were paid out in 2019. In fiscal year 2019, changes in the value of the phantom shares led to the recognition of expenses of €0.1 million.

Total remuneration cap

In addition to the cap on the individual variable components of the remuneration for the members of the Board of Management, the annual benefits received according to the Code in the version dated February 7, 2017, consisting of fixed remuneration and the variable remuneration components (i.e. annual bonus and performance share plan) for one fiscal year may not exceed an amount of €10,000,000 for the Chairman of the Board of Management and €5,500,000 for each member of the Board of Management. If the total remuneration cap is exceeded, the variable components will be reduced proportionately.

Regular review and adjustment

The Supervisory Board regularly reviews and, if necessary, adjusts the level of the total remuneration, the total remuneration cap and the individual targets. Among other things, the Supervisory Board performs a vertical comparison with the remuneration and employment terms of the Company’s employees and a horizontal comparison with the remuneration and employment terms of other companies’ management board members. The Supervisory Board uses an appropriate peer group of other companies to assess how customary the Board of Management members’ specific total remuneration is when measured against other businesses. This peer group is regularly reviewed and adjusted, most recently in February and December 2020. The peer group currently comprises the following companies: BMW, Daimler, Ford, General Motors, PSA Groupe, Nissan Motor Corporation, Toyota, BYD, Tesla (excluding CEO), hp, IBM, Uber, SAP, Samsung, General Electric, Siemens, Hitachi and Boeing.

Other agreements

Members of the Board of Management are entitled to payment of their normal remuneration for six months in the event of illness. In the event of disability, they are entitled to the retirement pension.

Surviving dependents receive a widow’s pension of 66 ⅔% and orphans’ benefits of 20% of the former member of the Board of Management’s pension. Contracts with members of the Board of Management whose first term of office began after April 1, 2015, provide for an entitlement – in line with the principles of the works agreement that also applies to employees of Volkswagen AG covered by collective agreements – to a widow’s pension of 60%, an orphan’s benefit of 10% for half-orphans and an orphan’s benefit of 20% for full orphans, based in each case on the former member of the Board of Management’s pension.

Members of the Board of Management and the Supervisory Board generally have the opportunity to obtain loans from Group companies.

REMUNERATION OF THE MEMBERS OF THE BOARD OF MANAGEMENT IN ACCORDANCE WITH THE GERMAN COMMERCIAL CODE

 

 

2020

 

2019

 

Non-performance-related component

 

Performance-related component

 

Long-term incentive component

 

Total
remuner­ation

 

Total
remuner­ation

1

Includes a special bonus by Porsche AG in the amount of €140,000.

2

Includes compensation of entitlements lost due to a change of employer in the amount of €7.3 million.

 

 

 

 

 

 

 

 

 

 

 

Herbert Diess

 

2,322,725

 

2,027,285

 

3,584,837

 

7,934,847

 

9,850,742

Oliver Blume

 

1,420,701

 

1,038,7961

 

1,684,716

 

4,144,213

 

4,894,440

Markus Duesmann (since April 1, 2020)

 

8,475,2362

 

674,097

 

1,088,933

 

10,238,266

 

Gunnar Kilian

 

1,435,899

 

898,796

 

1,684,716

 

4,019,411

 

4,938,205

Andreas Renschler (until July 15, 2020)

 

802,746

 

466,563

 

912,610

 

2,181,919

 

5,085,259

Abraham Schot (until March 31, 2020)

 

417,122

 

 

421,179

 

838,301

 

5,285,583

Stefan Sommer (until June 30, 2020)

 

809,815

 

 

 

809,815

 

5,344,523

Hiltrud Dorothea Werner

 

1,472,776

 

898,796

 

1,684,716

 

4,056,288

 

4,940,663

Frank Witter

 

1,421,549

 

898,796

 

1,684,716

 

4,005,061

 

4,888,285

Members of the Board of Management who left in the previous year

 

 

 

 

 

166,574

Total

 

18,578,569

 

6,903,129

 

12,746,420

 

38,228,118

 

45,394,272

REMUNERATION OF THE MEMBERS OF THE BOARD OF MANAGEMENT IN ACCORDANCE WITH THE GERMAN CORPORATE GOVERNANCE CODE

The amounts shown as “benefits received” in the Board of Management tables in accordance with the Code in the version dated February 7, 2017 correspond, in principle, to the amounts paid out for the fiscal year in question.

In 2020, Mr. Blume received an advance on the target amount for the 2019 to 2021 performance period. In accordance with the Code, this was reported in the tables in 2019 as benefits for the fiscal year.

The amounts shown as “Benefits granted” in the Board of Management remuneration tables in accordance with the Code in the version dated February 7, 2017 are based on 100% of the targets for the annual bonus and on the fair value at the grant date for the performance share plan. In the case of the performance share plan, the respective tranches are only payable to the Board of Management members at the end of the respective performance period (except for the advance described above). It is not until this time that the tranches are available to the Board of Management members. However, the tranches are shown as “Benefits granted” in the fiscal year in which they are allocated.

 

 

HERBERT DIESS

 

 

Chairman of the Board of Management of Volkswagen AG,
Chairman of the Brand Board of Management of Volkswagen Passenger Cars (until June 30, 2020),
Volume brand group,
China

 

 

 

 

 

Benefits received

 

Benefits granted

 

2020

 

2019

 

2019

 

2020

 

2020 (minimum)

 

2020 (maximum)

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed remuneration

 

2,125,000

 

2,125,000

 

2,125,000

 

2,125,000

 

2,125,000

 

2,125,000

Fringe benefits

 

197,725

 

87,694

 

87,694

 

197,725

 

197,725

 

197,725

Total

 

2,322,725

 

2,212,694

 

2,212,694

 

2,322,725

 

2,322,725

 

2,322,725

One-year performance-related remuneration

 

2,027,285

 

4,288,002

 

3,045,000

 

3,045,000

 

 

5,481,000

Multiyear performance-related remuneration

 

1,785,168

 

540,445

 

3,350,046

 

3,584,837

 

 

7,660,000

LTI (performance share plan 2017–2019)

 

1,785,168

 

 

 

 

 

LTI (performance share plan 2018–2020)

 

 

 

 

 

 

LTI (performance share plan 2019–2021)

 

 

 

3,350,046

 

 

 

LTI (performance share plan 2020–2022)

 

 

 

 

3,584,837

 

 

7,660,000

Phanton shares

 

 

540,445

 

 

 

 

Total

 

6,135,178

 

7,041,141

 

8,607,740

 

8,952,562

 

2,322,725

 

15,463,725

Pension expense

 

1,568,053

 

1,354,053

 

1,354,053

 

1,568,053

 

1,568,053

 

1,568,053

Total remuneration

 

7,703,231

 

8,395,194

 

9,961,793

 

10,520,615

 

3,890,778

 

17,031,778

 

 

OLIVER BLUME

 

 

Chairman of the Board of Management of Dr. Ing. h.c. F. Porsche AG,
Sport & Luxury brand group

 

 

 

 

 

Benefits received

 

Benefits granted

 

2020

 

2019

 

2019

 

2020

 

2020 (minimum)

 

2020 (maximum)

1

In 2019, Mr. Blume was granted a performance-related bonus payment by Porsche AG up to an amount of €150,000, which led to benefits received of €140,000 in 2020. The bonus payment was not taken into consideration in the remuneration from Volkswagen AG.

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed remuneration

 

1,350,000

 

1,350,000

 

1,350,000

 

1,350,000

 

1,350,000

 

1,350,000

Fringe benefits

 

70,701

 

68,936

 

68,936

 

70,701

 

70,701

 

70,701

Total

 

1,420,701

 

1,418,936

 

1,418,936

 

1,420,701

 

1,420,701

 

1,420,701

One-year performance-related remuneration1

 

1,038,796

 

1,901,085

 

1,500,000

 

1,350,000

 

 

2,430,000

Multiyear performance-related remuneration

 

 

1,440,000

 

1,574,419

 

1,684,716

 

 

7,200,000

LTI (performance share plan 2018–2020)

 

 

 

 

 

 

LTI (performance share plan 2019–2021)

 

 

1,440,000

 

1,574,419

 

 

 

3,600,000

LTI (performance share plan 2020–2022)

 

 

 

 

1,684,716

 

 

3,600,000

Total

 

2,459,497

 

4,760,021

 

4,493,355

 

4,455,417

 

1,420,701

 

11,050,701

Pension expense

 

997,938

 

808,544

 

808,544

 

997,938

 

997,938

 

997,938

Total remuneration

 

3,457,435

 

5,568,565

 

5,301,899

 

5,453,355

 

2,418,639

 

12,048,639

 

 

MARKUS DUESMANN

 

 

Chairman of the Board of Management of AUDI AG,
Premium brand group

 

 

Joined: April 1, 2020

 

 

Benefits received

 

Benefits granted

 

2020

 

2019

 

2019

 

2020

 

2019 (minimum)

 

2019 (maximum)

1

Includes compensation for entitlements lost due to a change of employer in the amount of €7.3 million, which is not taken into consideration in the total remuneration cap.

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed remuneration

 

8,277,5831

 

 

 

8,277,583

 

8,277,583

 

8,277,583

Fringe benefits

 

197,653

 

 

 

197,653

 

197,653

 

197,653

Total

 

8,475,236

 

 

 

8,475,236

 

8,475,236

 

8,475,236

One-year performance-related remuneration

 

674,097

 

 

 

1,012,500

 

 

1,822,500

Multiyear performance-related remuneration

 

 

 

 

1,088,933

 

 

2,700,000

LTI (performance share plan 2020–2022)

 

 

 

 

1,088,933

 

 

2,700,000

Total

 

9,149,333

 

 

 

10,576,669

 

8,475,236

 

12,997,736

Pension expense

 

849,934

 

 

 

849,934

 

849,934

 

849,934

Total remuneration

 

9,999,267

 

 

 

11,426,603

 

9,325,170

 

13,847,670

 

 

GUNNAR KILIAN

 

 

Human Resources and Truck & Bus (since July 15, 2020)

 

 

 

 

 

Benefits received

 

Benefits granted

 

2020

 

2019

 

2019

 

2020

 

2020 (minimum)

 

2020 (maximum)

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed remuneration

 

1,350,000

 

1,350,000

 

1,350,000

 

1,350,000

 

1,350,000

 

1,350,000

Fringe benefits

 

85,899

 

112,701

 

112,701

 

85,899

 

85,899

 

85,899

Total

 

1,435,899

 

1,462,701

 

1,462,701

 

1,435,899

 

1,435,899

 

1,435,899

One-year performance-related remuneration

 

898,796

 

1,901,085

 

1,350,000

 

1,350,000

 

 

2,430,000

Multiyear performance-related remuneration

 

 

 

1,574,419

 

1,684,716

 

 

3,600,000

LTI (performance share plan 2018–2020)

 

 

 

 

 

 

LTI (performance share plan 2019–2021)

 

 

 

1,574,419

 

 

 

LTI (performance share plan 2020–2022)

 

 

 

 

1,684,716

 

 

3,600,000

Total

 

2,334,695

 

3,363,786

 

4,387,120

 

4,470,615

 

1,435,899

 

7,465,899

Pension expense

 

1,170,535

 

886,559

 

886,559

 

1,170,535

 

1,170,535

 

1,170,535

Total remuneration

 

3,505,230

 

4,250,345

 

5,273,679

 

5,641,150

 

2,606,434

 

8,636,434

 

 

ANDREAS RENSCHLER

 

 

Chairman of the Board of Management of TRATON SE,
Truck & Bus brand group

 

 

Left: July 15, 2020

 

 

Benefits received

 

Benefits granted

 

2020

 

2019

 

2019

 

2020

 

2020 (minimum)

 

2020 (maximum)

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed remuneration

 

731,250

 

1,350,000

 

1,350,000

 

731,250

 

731,250

 

731,250

Fringe benefits

 

71,496

 

259,755

 

259,755

 

71,496

 

71,496

 

71,496

Total

 

802,746

 

1,609,755

 

1,609,755

 

802,746

 

802,746

 

802,746

One-year performance-related remuneration

 

466,563

 

1,901,085

 

1,350,000

 

731,250

 

 

1,316,250

Multiyear performance-related remuneration

 

1,785,168

 

990,754

 

1,574,419

 

912,610

 

 

1,950,000

LTI (performance share plan 2017–2019)

 

1,785,168

 

 

 

 

 

LTI (performance share plan 2018–2020)

 

 

 

 

 

 

LTI (performance share plan 2019–2021)

 

 

 

1,574,419

 

 

 

LTI (performance share plan 2020–2022)

 

 

 

 

912,610

 

 

1,950,000

Phanton shares

 

 

990,754

 

 

 

 

Total

 

3,054,477

 

4,501,594

 

4,534,174

 

2,446,606

 

802,746

 

4,068,996

Pension expense

 

 

5,025,570

 

5,025,570

 

 

 

Total remuneration

 

3,054,477

 

9,527,164

 

9,559,744

 

2,446,606

 

802,746

 

4,068,996

 

 

ABRAHAM SCHOT

 

 

Chairman of the Board of Management of AUDI AG,
Premium brand group

 

 

Left: March 31, 2020

 

 

Benefits received

 

Benefits granted

 

2020

 

2019

 

2019

 

2020

 

2020 (minimum)

 

2020 (maximum)

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed remuneration

 

337,500

 

1,350,000

 

1,350,000

 

337,500

 

337,500

 

337,500

Fringe benefits

 

79,622

 

460,079

 

460,079

 

79,622

 

79,622

 

79,622

Total

 

417,122

 

1,810,079

 

1,810,079

 

417,122

 

417,122

 

417,122

One-year performance-related remuneration

 

 

1,901,085

 

1,350,000

 

 

 

Multiyear performance-related remuneration

 

 

 

1,574,419

 

421,179

 

 

900,000

LTI (performance share plan 2019–2021)

 

 

 

1,574,419

 

 

 

LTI (performance share plan 2020–2022)

 

 

 

 

421,179

 

 

900,000

Total

 

417,122

 

3,711,164

 

4,734,498

 

838,301

 

417,122

 

1,317,122

Pension expense

 

56,049

 

2,222,572

 

2,222,572

 

56,049

 

56,049

 

56,049

Total remuneration

 

473,171

 

5,933,736

 

6,957,070

 

894,350

 

473,171

 

1,373,171

 

 

STEFAN SOMMER

 

 

Components and Procurement

 

 

Left: June 30, 2020

 

 

Benefits received

 

Benefits granted

 

2020

 

2019

 

2019

 

2020

 

2020 (minimum)

 

2020 (maximum)

1

Benefits received for 2019 included a top-up amount on the minimum remuneration of €3.5 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed remuneration

 

675,000

 

1,350,000

 

1,350,000

 

675,000

 

675,000

 

675,000

Fringe benefits

 

134,815

 

519,019

 

519,019

 

134,815

 

134,815

 

134,815

Total

 

809,815

 

1,869,019

 

1,869,019

 

809,815

 

809,815

 

809,815

One-year performance-related remuneration

 

 

1,901,085

 

1,350,000

 

 

 

Multiyear performance-related remuneration

 

 

 

1,574,419

 

 

 

LTI (performance share plan 2018–2020)

 

 

 

 

 

 

LTI (performance share plan 2019–2021)

 

 

 

1,574,419

 

 

 

LTI (performance share plan 2020–2022)

 

 

 

 

 

 

Total1

 

809,815

 

4,019,019

 

4,793,438

 

809,815

 

809,815

 

809,815

Pension expense

 

447,742

 

761,437

 

761,437

 

447,742

 

447,742

 

447,742

Total remuneration

 

1,257,557

 

4,780,456

 

5,554,875

 

1,257,557

 

1,257,557

 

1,257,557

 

 

HILTRUD DOROTHEA WERNER

 

 

Integrity and Legal Affairs

 

 

 

 

 

Benefits received

 

Benefits granted

 

2020

 

2019

 

2019

 

2020

 

2020 (minimum)

 

2020 (maximum)

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed remuneration

 

1,350,000

 

1,350,000

 

1,350,000

 

1,350,000

 

1,350,000

 

1,350,000

Fringe benefits

 

122,776

 

115,159

 

115,159

 

122,776

 

122,776

 

122,776

Total

 

1,472,776

 

1,465,159

 

1,465,159

 

1,472,776

 

1,472,776

 

1,472,776

One-year performance-related remuneration

 

898,796

 

1,901,085

 

1,350,000

 

1,350,000

 

 

2,430,000

Multiyear performance-related remuneration

 

2,956,624

 

 

1,574,419

 

1,684,716

 

 

3,600,000

LTI (performance share plan 2017–2019)

 

2,956,624

 

 

 

 

 

LTI (performance share plan 2018–2020)

 

 

 

 

 

 

LTI (performance share plan 2019–2021)

 

 

 

1,574,419

 

 

 

LTI (performance share plan 2020–2022)

 

 

 

 

1,684,716

 

 

3,600,000

Total

 

5,328,196

 

3,366,244

 

4,389,578

 

4,507,492

 

1,472,776

 

7,502,776

Pension expense

 

1,149,571

 

956,364

 

956,364

 

1,149,571

 

1,149,571

 

1,149,571

Total remuneration

 

6,477,767

 

4,322,608

 

5,345,942

 

5,657,063

 

2,622,347

 

8,652,347

 

 

FRANK WITTER

 

 

Finance and IT
Components and Procurement (acting July 1, 2020 – December 31, 2020)

 

 

 

 

 

Benefits received

 

Benefits granted

 

2020

 

2019

 

2019

 

2020

 

2020 (minimum)

 

2020 (maximum)

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed remuneration

 

1,350,000

 

1,350,000

 

1,350,000

 

1,350,000

 

1,350,000

 

1,350,000

Fringe benefits

 

71,549

 

62,781

 

62,781

 

71,549

 

71,549

 

71,549

Total

 

1,421,549

 

1,412,781

 

1,412,781

 

1,421,549

 

1,421,549

 

1,421,549

One-year performance-related remuneration

 

898,796

 

1,901,085

 

1,350,000

 

1,350,000

 

 

2,430,000

Multiyear performance-related remuneration

 

1,785,168

 

249,128

 

1,574,419

 

1,684,716

 

 

3,600,000

LTI (performance share plan 2017–2019)

 

1,785,168

 

 

 

 

 

LTI (performance share plan 2018–2020)

 

 

 

 

 

 

LTI (performance share plan 2019–2021)

 

 

 

1,574,419

 

 

 

LTI (performance share plan 2020–2021)

 

 

 

 

1,684,716

 

 

3,600,000

Phanton shares

 

 

249,128

 

 

 

 

Total

 

4,105,513

 

3,562,994

 

4,337,200

 

4,456,265

 

1,421,549

 

7,451,549

Pension expense

 

1,008,664

 

886,120

 

886,120

 

1,008,664

 

1,008,664

 

1,008,664

Total remuneration

 

5,114,177

 

4,449,114

 

5,223,320

 

5,464,929

 

2,430,213

 

8,460,213

POST-EMPLOYMENT BENEFITS

In the event of regular termination of their service on the Board of Management, the members of the Board of Management are entitled to a pension, including a surviving dependents’ pension, as well as the use of company cars for the period in which they receive their pension. The agreed benefits are paid or made available when the Board of Management member reaches the age of 63, or in Mr. Duesmann’s case when he reaches the age of 65. From July 16, 2022, Mr. Renschler is entitled to a pension of 70% of his fixed level of remuneration in 2017.

For the members of the Board of Management of Volkswagen AG appointed before February 24, 2017 with a defined contribution pension scheme, a contribution rate of 50% of the fixed remuneration applies. For the members of the Board of Management of Volkswagen AG appointed after February 24, 2017 with a defined contribution pension scheme, a contribution rate of 40% of the fixed remuneration applies. The resulting amount will be credited to the pension account.

Ms. Werner, Mr. Blume, Mr. Diess, Mr. Duesmann, Mr. Kilian, Mr. Schot, Mr. Sommer and Mr. Witter received a defined contribution plan, which is based in principle on a works agreement that also applies to the employees of Volkswagen AG covered by collective agreements and includes retirement, invalidity and surviving dependents’ benefits. A pension contribution in the amount of 50% of the fixed level of remuneration for Ms. Werner, Mr. Diess and Mr. Witter and in the amount of 40% of the fixed level of remuneration for Mr. Blume, Mr. Duesmann, Mr. Kilian, Mr. Schot and Mr. Sommer is paid to Volkswagen Pension Trust e.V. at the end of the calendar year for each year they are appointed to the Board of Management. The annual pension contributions result in modules of what is, in principle, a lifelong pension in line with the arrangements that also apply to employees covered by collective agreements.

The individual pension modules vest immediately upon payment to Volkswagen Pension Trust e.V. Instead of a lifelong pension, benefits can optionally be paid out as a lump sum or in installments when the beneficiary reaches retirement age – currently 63 at the earliest. Volkswagen AG has assumed responsibility for pension entitlements due to Mr. Witter from the time before his service with the Company.

On December 31, 2020, the pension obligations for members of the Board of Management in accordance with IAS 19 amounted to €36.6 (60.5) million. €7.7 (13.7) million was added to the provision in the reporting period in accordance with IAS 19. Other benefits such as surviving dependents’ pensions and the use of company cars are also factored into the measurement of pension provisions. The pension obligations measured in accordance with German GAAP amounted to €26.6 (44.8) million. €6.4 (14.5) million was added to the provision in the reporting year in accordance with German GAAP.

Retired members of the Board of Management and their surviving dependents received €35.9 (14.5) million in the year now ended. Obligations for pensions for this group of persons measured in accordance with IAS 19 amounted to €396.3 (373.7) million, or €317.8 (300.5) million measured in accordance with German GAAP.

A one-year post-contractual restraint on competition has been agreed with Mr. Duesmann. For the duration of this post-contractual restraint, Mr. Duesmann will receive compensation. The compensation will count towards current benefits from the pension scheme.

EARLY TERMINATION BENEFITS

If the appointment to the Board of Management is terminated for cause through no fault of the Board of Management member, the claims are limited to a maximum of two years’ remuneration, in accordance with G.13 sentence 1 of the Code (severance payment cap).

No severance payment is made if the appointment to the Board of Management is terminated for good reason for which the Board of Management member is responsible. The members of the Board of Management are also 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 in the event of early termination of their service on the Board of Management.

The post-contractual restraint on competition agreed with Mr. Duesmann will also generally apply in the event of early termination. The compensation will count towards any settlement.

Under the termination agreement with Mr. Schot, he will participate in the 2019 to 2021, 2020 to 2022 and 2021 to 2023 performance periods without any pro rata reductions. It has been agreed with Mr. Renschler that the tranche for the 2020 to 2022 performance period will be reduced on a pro rata basis in line with the date of his departure (July 15, 2020) and that no bad-leaver case will apply. It has been agreed with Mr. Sommer that the performance shares allocated to him for the 2018 to 2020, 2019 to 2021 and 2020 to 2022 performance periods will expire.

Please refer to notes 46 and 48 to the consolidated financial statements and the notes to the annual financial statements of Volkswagen AG for more detailed individual disclosures relating to members of the Board of Management who left the Company in fiscal year 2020.

PENSIONS OF THE MEMBERS OF THE BOARD OF MANAGEMENT IN 2020 (PRIOR-YEAR FIGURES IN BRACKETS)

 

Pension expense

 

Present values as of December 311

1

The amount is reported in the total amount for defined benefit plans recognized in the balance sheet (see note 29 to the consolidated financial statements).

 

 

 

 

 

Herbert Diess

 

1,568,053

 

7,694,544

 

 

(1,354,053)

 

(5,592,969)

Oliver Blume

 

997,938

 

3,023,360

 

 

(808,544)

 

(1,743,034)

Markus Duesmann (since April 1, 2020)

 

849,934

 

849,934

 

 

(−)

 

(−)

Gunnar Kilian

 

1,170,535

 

3,702,669

 

 

(886,559)

 

(2,102,717)

Andreas Renschler (until July 15, 2020)

 

 

 

 

(5,025,570)

 

(29,609,167)

Abraham Schot (until March 31, 2020)

 

56,049

 

 

 

(2,222,572)

 

(2,222,572)

Stefan Sommer (until June 30, 2020)

 

447,742

 

 

 

(761,437)

 

(1,228,940)

Hiltrud Dorothea Werner

 

1,149,571

 

5,071,366

 

 

(956,364)

 

(3,482,194)

Frank Witter

 

1,008,664

 

16,277,467

 

 

(886,120)

 

(14,474,204)

 

 

 

Members of the Board of Management who left in the previous year

 

(−)

 

(−)

Total

 

7,248,486

 

36,619,340

 

 

(12,901,219)

 

(60,455,797)