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Efficiency and performance management

We completed the measures initiated in the previous year to further develop the compensation systems for our employees in comdirect bank AG. The implementation of the new regulatory rules in the second quarter was followed by measures to meet the legal requirements pertaining to information and documentation in the third quarter. The Supervisory Board was informed of the structure of the compensation systems. comdirect bank thus complies with all of the key requirements of the executive compensation regulation for banks. At ebase, talks are presently underway with the Works Council on the introduction of the new system.

The overriding aim of the compensation policy is to contribute to the development of the company on a sustainable and permanent basis, while at the same time meeting the interests of the bank, its employees and its shareholders. Here we set positive performance incentives through appropriate variable compensation components. In accordance with Article 7 of the executive compensation regulation for banks, we disclose information on the compensation system for employees in the annual compensation report on our website in the second quarter after calculating the variable compensation for the previous year. The first report was published for financial year 2010.

There were material changes in the compensation model for certain specialist functions and managers. The regulatory requirements were specified in a works agreement:

  • Appropriate balance between variable and fixed compensation: maximum limits were defined for the variable compensation components which ensure an appropriate balance with fixed compensation.
  • Transparent interlinking of variable compensation and strategic goals: as was already the case, the level of the payout depends on the attainment of strategic corporate goals. Transparent, uniform rules, which are implemented in standardised target-setting agreements, now apply for the measurement of individual targets which are derived from the company strategy.
  • No negative incentive effect for variable compensation: the targets for employees in the controlling units relate directly to the respective control tasks. To avoid negative incentives and conflicts of interest, serious breaches of risk, authorisation or compliance regulations lead, if necessary, to the loss of variable compensation.

In addition to the compensation for the above employee groups, we also reviewed all of the salaries against prevailing market levels and adjusted them where necessary. The Long Term Incentive Programme (LTIP), in place since 2005, was granted for the last time in 2010. As a result, in the event of a positive performance, only the tranches issued in 2009 and 2010 will fall due for payment. At year-end 2011, a total of 75 (previous year: 80) employees had entitlements under these tranches.

For details regarding the compensation of the Board of Managing Directors please see the explanations regarding the compensation system for the Board of Managing Directors and Supervisory Board (see Compensation Report).