Board of Management remuneration

At the annual general meeting on May 12, 2023, an adjustment to the remuneration system for the members of Dürr AG’s Board of Management was approved by a majority of 87.33% of the votes cast, in accordance with Section 120a (1) of the German Stock Corporation Act. The details of the previous remuneration system, applicable in the 2022 fiscal year, can be found in the comprehensive → Remuneration report in the 2022 annual report.

Remuneration system for the members of the Board of Management for 2023

The current remuneration system for Dürr AG’s Board of Management has been in force since January 1, 2023, and is valid for all members of the Board of Management as well as for all new contracts to be concluded and for contract renewals.  

The Supervisory Board of Dürr AG considered it necessary to review the structure of the short-term (STI) and long-term (LTI) components within the Board of Management’s remuneration system, which was approved at the 2021 annual general meeting, and to adjust it following a market analysis. The previous remuneration system included a sustainability component that was solely short-term. In addition, the variable remuneration proved highly volatile when major external market dislocations occurred and relatively quickly caused unreasonably large deviations from the target remuneration. This was inconsistent with the increased performance demands, especially in critical, economic situations. The new remuneration system is designed to reflect, to a greater extent and in the longer term, the major importance of sustainable management for Dürr AG. At the same time, suggestions from investors and voting rights advisors were given even more consideration. As part of the review, the previous remuneration system was compared with the existing systems of other listed companies and aligned with common, established models. The alignment with market practice requires the maximum remuneration for the Board of Management to be adjusted. Please note here that the amount of the target remuneration of Dürr AG’s Board of Management was not adjusted as part of this realignment.

We have listed below the key changes compared with the previous remuneration system for the Board of Management:

• Maximum remuneration: The maximum remuneration was increased to 5,500,000 euros for the CEO and to 2,900,000 euros for the regular members of the Board of Management. This increase was effected by raising the maximum STI and LTI target achievement from 150% to 200%, in line with common market practice.
   
• Composition of the short-term incentive (STI): The STI is composed of the following:
  • 40% operating EBIT margin
  • 30% free cash flow (FCF)
  • 15% ESG target(s)
  • 15% strategic target(s)
     
• Composition of the long-term incentive (LTI): The LTI is composed of the following:
  • 40% operating EBIT margin
  • 40% TSR (total shareholder return)
  • 20% ESG target(s)
    
    When defining the TSR, i.e. the shareholder return including dividend payouts over three fiscal years, the TSR of Dürr AG is measured against the TSR of a defined peer group. This peer group is made up of German and Austrian companies, particularly mechanical and plant engineering firms, automotive suppliers, engineering service providers, and manufacturers of commercial vehicles. Taking into account both the share price development and the TSR emphasizes the focus on the long-term creation of added value by the company.
     
• Obligation to hold shares: The members of the Board of Management are subject to a contractual obligation to permanently hold 12,500 Dürr shares each during the term of their office after the end of a three-year accumulation phase.

For more detailed information, please refer to the comprehensive explanations in the → Invitation to the annual general meeting of Dürr AG on May 12, 2023, from page 62.