Report on compensation

The Supervisory Board determines the total compensation and the compensation structure for members of the Management Board and regularly reviews its appropriateness. In the context of the decision-making process of the Supervisory Board, the General Committee is responsible for the negotiation and content of the service contracts of the members of the Management Board. The compensation of the members of the Management Board is determined by the size, the industry, and the orientation of the company, its economical and financial position, the duties of the respective members of the Management Board, as well as the amount and structure of similar packages of similar companies. The compensation is allocated in such a way that it is competitive both internationally and nationally in order to offer an incentive for committed and successful work.

The compensation of the Management Board is performance-related; it consists of success-independent and success-related components as well as of components with long-term stimulus effect and risk character. Success-independent components are the fixed allowance (basic salary) and fringe benefits. The basic salary is paid monthly as a salary. Fringe benefits consist primarily of company car usage and subsidies for insurance policies.

The Management Board is entitled to an annual bonus and a share-based compensation component as performance-related components that can be formulated on assessment basis over several years.

The annual bonus is decided upon by the Supervisory Board in its reasonable discretion on the basis of the business development of the company. The amount is determined by the degree to which previously specified targets have been met or exceeded.

In view of the share-based compensation component, the ordinary Annual General Meeting in 2008 passed a resolution setting up the Performance Share Program under which members of the Management Board and other executive officers can be granted subscription rights to shares. Subscription rights under the Performance Share Program have so far not been granted, however, and share-based compensation components have yet to be implemented.

No benefits were promised to the members of the Management Board in the case of premature or regular termination of their activities. A compensation agreement exists between a member of the Management Board and two shareholders for the case that such shareholders sell their shares wholly or in part.

The following expenses which are due in the short-term were incurred for the compensation of the Management Board:

2009 Fixed compensation Incidental benefits Variable compensation Total
  k EUR k EUR k EUR k EUR
Michael Zahn 300 12 250 562
Helmut Ullrich 300 15 150 465
  600 27 400 1,027

There are no provisions for pensions accruals for active members or members who have left the Management Board or Supervisory Board of Deutsche Wohnen AG. No loans were made to members of the Management Board of Deutsche Wohnen AG in the financial year 2009.

My Annual Report