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Allianz Annual Report 2012

Annual Report 2012    Allianz Group Base salary Base salary is the fixed remuneration component and is expressed as an annual cash sum, paid in twelve monthly installments. Variable remuneration Variableremunerationaimsforbalancebetweenshort-term performance, longer-term success and sustained value creation. It is designed to balance risk and opportunity to achieve an appropriate level of remuneration in different performance scenarios and business circumstances. The grant of variable remuneration components is related to performance and can vary between 0 % and 165 % of the respective target values. All variable awards are made under the rules and conditions of the “Allianz Sustained Perfor- mance Plan” (ASPP) which consists of the following equally- weighted components: −− Annual bonus (short-term): A cash payment which rewards annual achievement of targets. −− Three-year bonus (mid-term): A deferred award subject to a multi-year sustainability assessment. −− Equity-relatedremuneration(long-term):Avirtualshare award, known as “Restricted Stock Units” (RSU). Annual achievement of targets is the basis for the initial grant value. The longer-term performance of the Group is re- flected in ­Allianz’s stock price development over the four-year vesting period following the grant. The RSU payout is limited to an increase of the grant price by 200 % (cap). Variable remuneration components may not be paid, or payment may be restricted in the case of a breach of the ­Allianz Code of Conduct, risk limits or compliance require- ments. Additionally, a reduction of variable remuneration may occur if the state supervisory authority requires this in accordance with its statutory powers. The following chart illustrates the potential value of the variable remuneration – excluding pension and perqui- sites – according to different performance outcomes (min- imum, target and maximum). In addition, it shows the proportions delivered through fixed and variable remu- neration. VALUE OF ANNUAL OFFER IN VARIOUS PERFORMANCE ACHIEVEMENT SCENARIOS B 006 Example: Regular member of the Board of Management with € 700  Thou fixed and € 2,100 Thou target variable remuneration € thou Minimum Target 5,000 4,000 3,000 2,000 1,000 Maximum Award/Accrual 700 (100%) 700 0% 2,800 4,165 165% 700 (25%) 700 (25%) 700 (25%) 700 (25%) 700 (16.81%) 1,155 (27.73%) 1,1552 (27.73%) 1,1551 (27.73%) (75)% ≈+49% Award and accrual range – variable remuneration   Base salary    Annual bonus (short-term)    Three-year bonus (mid-term)    Equity-related remuneration (long-term) 1 The maximum payout of the Equity-related remuneration is capped at 200 % above the grant price. 2 The annual accrual of the mid-term (Three-year bonus) amount only indicates the assumed progress based on annual performance. The final assessment and payout is determined by the Supervisory Board at the end of the three-year performance period. B Corporate Governance 63 Corporate Governance Report 69 Statement on Corporate Management pursuant to § 289a of the HGB 71 Takeover-related Statements and Explanations 74 Remuneration Report 75