Remuneration of the Board of Management

The remuneration of the Board of Management is determined by the Supervisory Board. The Supervisory Board reviews and discusses the remuneration structure and the appropriateness of the remuneration at regular intervals. The most recent review was conducted by the Supervisory Board at its meeting on 13 November 2010. At this meeting the Supervisory Board also decided upon a fundamental reorientation of the system of remuneration for the Board of Management with effect from the 2011 financial year. This is described in greater detail below.

The purpose of the remuneration system for the Board of Management is to appropriately recompense the members of the Board of Management. Based on the scope of activity and responsibility of the individual member of the Board of Management, the total remuneration is geared to his or her personal performance and the commercial success of the company. It consists of the following components:

Fixed remuneration: The fixed remuneration is paid in twelve equal monthly installments. It is guided, in particular, by the range of duties and professional experience of the individual Board member. The amount of fixed remuneration is reviewed by the Supervisory Board at intervals of two years.

Variable remuneration: The individual performance of a particular Board member and the commercial success of the company are recognized through an appropriate portion of variable remuneration in the total remuneration.

The variable remuneration is paid in the form of a bonus for the financial year just-ended. It is determined by the Supervisor Board in light of the performance and economic position of the company and the Group as a whole, the performance of the specific Board member’s area of responsibility as well as his or her individual performance.

Fringe benefits: The members of the Board of Management also receive certain fringe benefits, most notably a company car and insurance protection (liability, accident and luggage insurance).

Insofar as Board members exercise a mandate at Group companies and are recompensed for this function, such remuneration is counted towards the bonus paid by Talanx AG.

With regard to the amount of remuneration received by the Board of Management, please see "Remuneration of the management boards of the parent company" in the present Annual Report.