Compensation report
The compensation report outlines the compensation system and lists the individual compensation of the members of the Management Board and the Supervisory Board.
Compensation system of the Management Board
The compensation system for the Management Board of DB AG aims to provide appropriate compensation to members of the Management Board in accordance with their duties and areas of responsibility.
The appropriate level of compensation is reviewed regularly using a comparison process. This review examines the level of Management Board compensation both in comparison to the external market (horizontal appropriateness) and in comparison to other levels of compensation within the company (vertical appropriateness). If the review shows a need to adjust the compensation system or the level of compensation, the Personnel Committee of the Supervisory Board, which has equal representation of the stakeholders and shareholders involved through the shareholders and employee representatives on the committee, submits corresponding proposals in this regard to the Supervisory Board for approval. The appropriateness of Management Board compensation was last reviewed in the 2021 financial year.
Compensation components
The total compensation for Management Board members consists of a fixed salary, a performance-linked annual bonus (short-term incentive, STI) and a long-term incentive plan based on multi-year figures. Total compensation also includes benefit commitments, other commitments and ancillary benefits.
The fixed salary is cash compensation linked to the financial year. It is based on the scope of responsibility and the experience of each Management Board member. The individually defined fixed income is paid out in 12 equal installments.
In December 2021, the Supervisory Board adopted an amendment to the STI methodology, which was applicable for the first time in the 2022 financial year. In the interests of transparent and uniform rules on profit-sharing in the Integrated Rail System, this also applies, as far as possible, to other Group subsidiaries and management levels from 2022. The methodological revision of the STI takes into account in particular the recommendations of the Federal Government’s Public Corporate Governance Code, which was amended in 2020. The main focus of the established STI methodology is on operating performance and customer satisfaction, but also takes into account the income situation and respective Board Division-specific issues. The annual bonus is calculated on the basis of the total of five individual targets with equal weightings. Three of these objectives relate to the areas of “Customer,” “Quality” and “Employees,” and another objective is the economic performance of DB Group. These four objectives are common to all members of the Management Board. In addition, a Board Division-specific target has been agreed for each Board member. After the mathematical calculation of the STI, it is possible to modify the mathematical result by means of a discretionary factor and to allow extraordinary events that occurred during the reporting year and cannot be predicted at the start of the assessment period to be included in the target achievement via a modifier. Furthermore, the STI is only paid out if DB AG is able to pay dividends. If this is not the case, the STI is completely canceled (knock-out). The STI payout may not amount to more than 200% of the STI target bonus. Extra premium and clawback regulations were also agreed with Board members in accordance with the recommendations of the PCGK. The business and personal targets of the Management Board members are determined by the Supervisory Board annually, based on recommendations from the Personnel Committee, and are then agreed in writing with the Management Board members.
Together with the corporate plan adopted by the Supervisory Board, the personal targets form the basis for calculating the annual bonus. This means that all of the key parameters for total compensation are established at the beginning of the financial year. At the end of a financial year, the level of target achievement is determined for each member of the Management Board on the basis of the Group results. The target income is achieved if every target is 100% met. The final decision on this matter is made by the Supervisory Board and is prepared by the Personnel Committee.
The long-term incentive (LTI) for the Management Board is focused on long-term transport volume and climate policy targets and the sustainable creditworthiness and profitability of DB Group. After the end of the respective plan term of four years, the extent to which LTI targets have been achieved at the end of the tranche is measured using the average target achievement for the individual years. The payment amount for the long-term incentive plan has an upper limit and can vary between 0% and 200%. Claims from the long-term incentive plan are inheritable.
The Management Board members are entitled to an appropriate severance package if their contract is terminated before the contractually stipulated termination date, provided that the Management Board member was not personally responsible for the termination through his or her actions. The severance package is based on the remaining term of the contract, the agreed target salary and, where applicable, the pension benefits already owed by DB AG for the remainder of the contract.
In accordance with the recommendations of the PCGK, a severance payment cap is included in all contracts of DB AG Management Board members. This cap means that payments made to a Management Board member due to premature termination of Management Board duties cannot, without good cause as defined by section 626 of the German Civil Code (Bürgerliches Gesetzbuch; BGB), exceed the value of two years’ salary, including variable compensation components, and must not provide compensation for more than the remaining term of the employment agreement.
Management Board members do not receive any additional compensation for mandates exercised in control bodies of Group companies or affiliated companies.
In the interests of transparent and uniform rules on profit-sharing in the Integrated Rail System, the modified STI methodology adopted by the Supervisory Board of DB AG for the Management Board in December 2021 was implemented for other Group subsidiaries and management levels from 2022.
The compensation system for executives aims primarily to closely link compensation to the sustainable success of the company in the sense of the business success of the Integrated Rail System and of DB Group, as well as the alignment of all divisions toward this target.
The annual bonus for executives and employees not subject to wage agreements in the Integrated Rail System is structured as a profit share. Personal goals are then agreed with executives as part of a regular process. The target achievement and/or personal performance assessments are then regularly included in the assessment, both in the profit share and in decisions to increase the fixed salary.
If the executives are members of DB AG subsidiaries, the respective subsidiary’s supervisory board is responsible for discussing the personal goals, if possible by the end of a financial year. Where applicable, the respective decision-making will take place after the DB AG Supervisory Board meeting in which the mid-term planning and the targets for DB AG’s Management Board are adopted. This chronological sequence of the handling of personal goals in the Supervisory Boards of the subsidiaries is due to the Group structure of DB AG.
In some cases, given the regulatory requirements, DB Netz AG is subject to separate regulatory requirements which take even greater account of the business success of DB Netz AG.
The Supervisory Board of DB AG has determined that the Management Board should not include members who have exceeded the standard retirement age of the statutory pension insurance. After leaving the company, Management Board members are entitled to pension payments. At the latest upon reaching the age of 65, Management Board members who were in office prior to 2017 are entitled to a lifelong pension if the term of employment ends due to permanent invalidity, or if the contract is terminated before the agreed termination date or is not extended, without good cause, or if the Management Board member refuses to continue the contract under the same or more beneficial conditions.
The system governing benefit commitments to Management Board members was amended in 2017. Members appointed to the Management Board for the first time in 2017 and thereafter receive a defined benefit commitment under which a capital stock is saved up for the Board member for the duration of their employment and paid out when they reach retirement age. The commitment is granted in the form of a capital account plan with an annual contribution derived as a fixed percentage rate of the fixed salary.
Company pension commitments for Management Board members already in office are based on a percentage of the basic salary depending on the length of time that the Management Board member has been with the company. Pension commitments include lifelong retirement and surviving dependent benefits. There is no lump sum payment option.
In addition, for Management Board member contracts entered into before January 1, 2009, a reinsurance policy was concluded to cover company pension benefits.
The contractual ancillary benefits for Management Board members include a company car with driver for business and personal use, a personal BahnCard 100 First travel card and standard insurance coverage. A housing allowance is provided for second homes where these are required for business purposes. Where these benefits in kind cannot be granted on a tax-free basis, they are taxed as monetary benefits for which the Management Board members are fully responsible. Management Board members, like any other member of the Group’s executive personnel, can choose to take part in the company’s deferred compensation program.
The members of the Management Board are covered by liability insurance against financial losses incurred due to DB AG’s business operations (D&O insurance). In the year under review, this insurance was designed as a Group insurance policy with the deductible provided for under law; it provides coverage for financial losses that may occur during the performance of Management Board activities. The insurance coverage of the existing D&O insurance policy is valid for a period of five years after the termination of activities as a member of the Management Board.
Compensation for the 2022 financial year
The director’s fee for the previous financial year is due at the end of the month in which the company’s Annual General Meeting takes place.
The DB AG Management Board members will receive the following compensation for their work during the year under review:
Total COMPENSATION of the Management Board / € thousand | Fixed comp- | Variable compensation | Other 3) | Total 4) | ||
Short- | Long-term payment | Provision 2) | ||||
Incumbent Management Board members of DB AG as of Dec 31, 2022 | ||||||
Dr. Richard Lutz | 968 | 1,261 | – | 672 | 8 | 2,236 |
Dr. Daniela Gerd tom Markotten | 400 | 482 | – | 97 | 15 | 896 |
Dr. Levin Holle | 400 | 518 | – | 219 | 15 | 933 |
Berthold Huber | 699 | 699 | – | 428 | 14 | 1,411 |
Dr. Sigrid Nikutta | 400 | 473 | – | 225 | 9 | 881 |
Evelyn Palla | 200 | 214 | – | 38 | 5 | 419 |
Dr. Michael Peterson | 200 | 214 | – | 38 | 6 | 419 |
Martin Seiler | 650 | 736 | – | 360 | 8 | 1,394 |
Total | 3,916 | 4,595 | – | 2,076 | 78 | 8,589 |
Members who left the Management Board of DB AG during the year under review | ||||||
Ronald Pofalla | 217 | 245 | – | 350 | 12 | 474 |
Total | 4,133 | 4,840 | – | 2,426 | 90 | 9,064 |
Individual figures are rounded and therefore may not add up.
1) Subject to the resolution of the Supervisory Board.
2) Long-term variable compensation refers to the addition/release of provisions for long-term incentives (LTI).
3) Monetary benefits accruing from travel discounts, usage of company cars, and insurance and housing allowances.
4) Total without long-term variable compensation.
In the year under review, no Management Board member of DB AG received benefits or promises of benefits from a third party with regard to their activities as a member of the Management Board.
In the year under review, an amount of € 1,769 thousand was added to the pension provisions.
Additions to pension provisions / € thousand | 2022 |
Incumbent Management Board members of DB AG as of Dec 31, 2022 | |
Dr. Richard Lutz | 329 |
Dr. Daniela Gerd tom Markotten | 176 |
Dr. Levin Holle | 175 |
Berthold Huber | 648 |
Dr. Sigrid Nikutta | 171 |
Evelyn Palla | – |
Dr. Michael Peterson | – |
Martin Seiler | 270 |
Total | 1,769 |
Members who left the Management Board of DB AG during the year under review | |
Ronald Pofalla | – |
Total | 1,769 |
Pension provisions for former Management Board members are shown in total in the Notes to the consolidated financial statements.
Compensation of the Supervisory Board for the 2022 financial year
The compensation of the Supervisory Board of DB AG was most recently regulated by the Annual General Meeting resolution of September 21, 2010. In addition to being reimbursed for their cash outlays and the value-added tax due on their compensation and cash outlays, the DB AG Supervisory Board members each receive fixed annual compensation of € 20,000, plus performance-linked annual compensation. The performance-based compensation is calculated based on the relationship between operating profit (EBIT) as disclosed in the consolidated financial statements for the financial year compared to the previous year’s figures, and the attaining of specific operational performance figures. Performance-based compensation is limited to a maximum of € 13,000. The Chairman of the Supervisory Board receives twice this amount, while his deputy receives one and a half times the above figure. This compensation is increased by a quarter for every position held on a committee by the individual Supervisory Board member. This compensation increases by 100% for the Chairman of the Executive Committee and the Chairman of the Audit and Compliance Committee, and by 50% for the Chairman of the Personnel Committee. This does not include membership or chairmanship of the committee that is formed under the terms of Section 27 Para. 3 of the Co-determination Act (MitbestG).
In addition, the members of the Supervisory Board of DB AG receive an attendance fee of € 250 for each meeting of the Supervisory Board and its committees at which they are present. The members of the Supervisory Board also have the choice between a personal BahnCard 100 First and five free train tickets.
The members of the Supervisory Board are covered by liability insurance against financial losses incurred due to DB AG’s business operations (D&O insurance). This insurance is designed as a group insurance policy with no deductible and provides coverage for financial losses that may occur during the performance of Supervisory Board activities. There is also a Group accident insurance policy in place for members of the Supervisory Board. The company pays the premiums for these policies.
Supervisory Board members who have only been members for part of the respective financial year receive a twelfth of the total compensation for each month or part of a month of their membership. This rule also applies to the increase in compensation for the Chairman of the Supervisory Board and his or her deputy and to the increase in compensation for membership and chairmanship of a Supervisory Board committee.
Compensation is paid after the conclusion of the Annual General Meeting that votes to ratify the Supervisory Board’s activities in the previous financial year.
Taxes due on compensation received, including the personal BahnCard 100 First and the five free train tickets, are the individual responsibility of each Supervisory Board member.
Supervisory Board members currently hold no shares in the company, nor do they hold options entitling them to purchase shares in the company.
Subject to the approval of the activities of the Supervisory Board by the Annual General Meeting on March 28, 2023, the members of the Supervisory Board of DB AG will receive the following compensation for their work during the year under review:
Total compensation of the Supervisory Board / € thousand | Annual compensation 2022 | ||||
Fixed | Variable compen- | Meeting | Ancillary benefits | Total | |
On December 31, 2022, incumbent Supervisory Board members of DB AG 1) | |||||
Werner Gatzer | 40.0 | 26.0 | 3.0 | – | 69.0 |
Martin Burkert | 21.7 | 14.1 | 2.8 | – | 38.5 |
Ralf Damde | 1.7 | 1.1 | 0.3 | – | 3.0 |
Stefan Gelbhaar | 11.7 | 7.6 | 1.0 | – | 20.3 |
Anja Hajduk 2) | – | – | – | – | – |
Susanne Henckel | 20.4 | 13.3 | 2.8 | – | 36.4 |
Jörg Hensel | 25.0 | 16.3 | 3.3 | 0.9 | 45.4 |
Cosima Ingenschay | 25.0 | 16.3 | 2.3 | – | 43.5 |
Alexander Kaczmarek | 6.7 | 4.3 | 0.8 | 0.9 | 12.6 |
Prof. Dr. Susanne Knorre | 20.0 | 13.0 | 1.5 | 6.6 | 41.1 |
Dorothee Martin | 11.7 | 7.6 | 1.0 | – | 20.3 |
Daniela Mattheus | 5.0 | 3.3 | 0.5 | – | 8.8 |
Heike Moll | 20.0 | 13.0 | 1.5 | 6.6 | 41.1 |
Michael Puschel | 1.7 | 1.1 | 0.3 | – | 3.0 |
Dr. Immo Querner | 40.0 | 26.0 | 3.3 | 6.6 | 75.8 |
Bernd Reuther | 11.7 | 7.6 | 1.0 | 0.9 | 21.1 |
Klaus-Peter Schölzke | 6.7 | 4.3 | 0.5 | – | 11.5 |
Manfred Scholze | 1.7 | 1.1 | 0.3 | 6.9 | 9.9 |
Jens Schwarz | 30.0 | 19.5 | 3.5 | 6.6 | 59.6 |
Veit Sobek | 20.0 | 13.0 | 1.3 | 6.6 | 40.8 |
Members who left the Supervisory Board of DB AG during the year under review 1) | |||||
Jürgen Beuttler | 11.7 | 7.6 | 0.8 | – | 20.0 |
Enak Ferlemann 2) | – | – | – | – | – |
Dr. Ingrid Hengster | 13.3 | 8.7 | 0.8 | – | 22.8 |
Klaus-Dieter Hommel | 30.0 | 19.5 | 2.5 | – | 52.0 |
Jürgen Knörzer | 16.7 | 10.8 | 1.3 | – | 28.8 |
Kirsten Lühmann | 10.0 | 6.5 | 0.5 | – | 17.0 |
Michael Odenwald | 40.8 | 26.5 | 2.0 | – | 69.4 |
Eckhardt Rehberg | 10.0 | 6.5 | 0.5 | – | 17.0 |
Mario Reiss | 11.7 | 7.6 | 0.8 | – | 20.0 |
Christian Schmidt | 6.7 | 4.3 | 0.5 | – | 11.5 |
Elisabeth Winkelmeier-Becker 3) | 8.3 | 5.4 | 0.8 | – | 14.5 |
Supervisory Board remuneration for further mandates in DB subsidiaries | 108.4 | ||||
Total | 982.7 | ||||
Individual figures are rounded and therefore may not add up.
1) Some Supervisory Board members state that their compensation is to be donated to the Hans Böckler Foundation in line with the directive of the German Trade Union Confederation (Gewerkschaftsbund).
2) Ms. Hajduk and Mr. Ferlemann waived the compensation they are due for their work as a member of the Supervisory Board in full.
3) Ms. Winkelmeier-Becker waived the compensation she was due for her work as a member of the Supervisory Board for the period from January 1, 2022 to March 15, 2022.
4) Payment of variable compensation components subject to the regulations of the Law on the Introduction of a Price Brake on Electricity (StromPBG).
There are no pension obligations for members of the Supervisory Board.
The members of the Supervisory Board did not receive any compensation in the year under review for any personally provided services.
