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Allianz Annual Report 2012

Annual Report 2012    Allianz Group The pension contributions as a percentage of Base salary paid by the company to the contribution-based pension plan are as follows: Pension contributions B 014 % of the Base salary Allianz SE Board member service Current contribution level Contribution level from 2013 Less than 5 years 28.35 27.98 After 5 years 35.44 34.98 After 10 years 42.53 41.98 Executive remuneration below the ­Allianz SE Board of Management For the purpose of this report, senior executives are defined as ­Allianz employees who may either have a material im- pact on the company’s financial or risk positions, or lead critical operations of the Group. In 2012 this totaled 167 (2011: 164) individuals. In general, the same principles and governance standards described for the Board of Manage- ment apply to the remuneration of senior executives. How- ever, executives below the Board of Management are more directly responsible for specific lines of business or product groups. Likewise, their remuneration is more closely aligned with their specific business, country and/or regional operatingenvironments.Thegeneralobjectiveforall­Allianz remuneration structures is to offer competitive reward in terms of components, structures and levels, which allows ­Allianz to attract, motivate and retain high-performing employees without encouraging excessive risk-taking. GOVERNANCE SYSTEM Allianz operates an effective system of Compensation Com- mittees at the business, regional, country and operating entity levels. They periodically review and decide on remu- neration guidelines and practices below the Board of Man- agement level. Based on the specific nature, scale and scope of each business the Board of Management has defined the appropriate level of Compensation Committee oversight. A Group-wide framework governs Compensa- tion Committee operations and ensures consistent adher- ence to both ­Allianz minimum standards and regulatory requirements. The duties of the Group Compensation Committee (GCC) are to assist the ­Allianz SE Board of Management in dealing with all compensation matters relating to the Chief Execu- tive Officers, Board members of the International Executive Committee (IEC) companies and the heads of the major functions of ­Allianz SE. In addition, the committee and rep- resentativesofcompaniesclassifiedassignificantaccording to the VersVergV 1 have identified and approved a list of other key executives for additional review. The member- shipoftheGCCisapprovedbythe­AllianzSEBoardofManage­ ment and reflects the nature of the principal ­Allianz busi- nesses and the breadth and depth of expertise required for Group oversight to comply with VersVergV. Cross-repre­ senta­tion on different committees (i.e. Compensation, Risk, Finance and Capital Committees) supports effective infor- mation flows. The responsibilities of Compensation Committees below the GCC level are similar regarding compensation systems and oversight of their respective/relevant executives. Local Compensation Committees are typically comprised of regional Chief Executive Officers, Business Division Heads, Chief Financial Officers or Chief Operating Officers, a repre­ sentative of the legal and/or compliance function and the Head of Human Resources. Beyond local Compensation Committee oversight, the GCC must be informed quarterly of payments or individual agreements exceeding certain thresholds. FRAMEWORK AND MINIMUM STANDARDS Allianz’s global governance frameworks and minimum standards are centrally managed. This ensures global consis­ tency and allows for timely updates to reflect changing business needs and evolving regulatory requirements. It also supports continuous improvement in sustainable reward and performance management and exemplary governance principles. Allianz conducted its annual remuneration risk assessment in companies classified as significant according to Vers- VergVtoconfirmthattheremunerationstructuresforsenior executives were appropriate to their role, transparent and aligned with the sustainable development principles of the company. The aim of this review was to develop recom- mendations for improving risk mitigation and aligning pay with performance and, ultimately, to confirm compliance with regulation. The results of these analyses were incorpo- rated in the required internal Compensation Report to the 1 In accordance with the VersVergV, Compensation Committee membership in ­Allianz gener- ally does not solely consist of Board members and managing directors but also includes rep- resentatives of the business as well as representatives of HR and control functions. In order to avoid potential conflicts of interest, each Compensation Committee comprises members whose own remuneration is not covered by its remit. 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 85