1.2 Division of responsibilities between the Annual General Meeting, the Board of Directors and the Compensation Committee
The Annual General Meeting, at the request of the Board of Directors, approves the maximum total amounts for the remuneration of the Board of Directors and the Group Executive Committee for the following financial year. Details of the relevant rules and the consequences of rejection by the Annual General Meeting are set out in Articles 6.7.13 and 6.7.14 of the Articles of Incorporation. Article 8.2.2 of the Articles of Incorporation also defines the requirements and maximum levels for additional amounts paid to new members of the Group Executive Committee who are appointed during a period for which the Annual General Meeting has already approved remuneration. In addition, the Articles of Incorporation contain the following provisions relating to the remuneration policy:
- Remuneration of the Board of Directors (Articles 7.4 and 9.1)
- Compensation Committee (Article 7.5)
- Remuneration of the Group Executive Committee (Articles 8.2 and 9.1)
- Contracts of the Board of Directors and the Group Executive Committee (Article 9.2)
- Number of external mandates for the Board of Directors and Group Executive Committee (Article 9.3)
The Board of Directors approves the personnel and remuneration policy for the Group, as well as the general terms and conditions of employment and the remuneration strategy for members of the Group Executive Committee. It determines the remuneration for the Board itself and decides on the remuneration of the Group CEO and the total remuneration of the Group Executive Committee, taking into account the maximum amounts approved by the Annual General Meeting.
The Compensation Committee handles all business of the Board of Directors concerning remuneration, submits relevant proposals to the Board and, within the framework of the approved total remuneration, has the authority to determine the remuneration of the individual Group Executive Committee members (with the exception of the Group CEO). It plans succession for the Board of Directors, the Group Executive Committee and the executive committees of the strategic subsidiaries, and discusses talent management and culture development within the Group. The Group CEO and other members of the Group Executive Committee do not participate in meetings at which changes to their remuneration are discussed or decided.
The Committee’s decision-making powers are governed by the Articles of Incorporation, the Organisational Regulation and the Regulation of the Compensation Committee.
The table below shows the division of responsibilities between the Annual General Meeting, the Board of Directors and the Compensation Committee.
| Subject | Remuneration Committee | Board of Directors | Annual General Meeting | |||
|---|---|---|---|---|---|---|
| Maximum total amounts for remuneration of the Board of Directors (BoD) and Group Executive Committee (Group ExCo) | P | 1 | R | 2 | A | 3 |
| Additional amount for the remuneration of newly appointed members of the Group ExCo (Articles of Incorporation) | P | R | A | |||
| Personnel and remuneration policy | P | A | 4 | – | ||
| Remuneration Policies for the BoD and Group ExCo | P | A | 4 | – | ||
| Principles of plans for the BoD and Group ExCo (Articles of Incorporation) | P | R | A | |||
| Principles underlying retirement benefit plans and social security payments | P | A | – | |||
| Equity and performance-related remuneration plans of the Group | P | A | 4 | – | ||
| General terms of employment of the Group ExCo | P | A | 4 | – | ||
| Definition of performance targets for the variable performance-related salary component of Group ExCo and ExCo of strategic Group companies | P | A | 4 | – | ||
| Definition of achievement of targets for the variable performance-related salary component of Group ExCo and ExCo of strategic Group companies | P | A | 5 | – | ||
| Remuneration of the BoD | P | A | 5 | – | ||
| Remuneration of the Group CEO | P | A | 5 | – | ||
| Total remuneration of the Group ExCo | P | A | 5 | – | ||
| Remuneration of the members of the Group ExCo (excl. Group CEO) | A | 6 | – | – | ||
| Remuneration Report | P | R | A | 7 | ||
| 1 P stands for preparation and proposal to the Board of Directors. | ||||||
| 2 R stands for request to the Annual General Meeting. | ||||||
| 3 A stands for approval. | ||||||
| 4 In the framework of the Articles of Incorporation. | ||||||
| 5 In the framework of the maximum total remuneration defined by the Annual General Meeting. | ||||||
| 6 In the framework of the total remuneration defined by the Board of Directors. | ||||||
| 7 Consultative vote. | ||||||