Remuneration report
The remuneration report outlines the remuneration system and lists the individual remuneration of the members of the Management Board and the Supervisory Board.
Remuneration system of the Management Board
The remuneration system for the Management Board of DB AG aims to provide appropriate remuneration to members of the Management Board in accordance with their duties and areas of responsibility.
The appropriate level of remuneration is reviewed regularly using a comparison process. This review examines the level of Management Board remuneration both in comparison to the external market (horizontal appropriateness) and in comparison to other levels of remuneration within the company (vertical appropriateness). If the review shows a need to adjust the remuneration system or the level of remuneration, 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 the remuneration of the Board members was assessed in the year under review. The results of the review were taken into account as part of a revised version of the Management Board remuneration methodology, which will take effect from 2024.
Remuneration components
The total remuneration for Management Board members consists of a fixed salary, a performance-linked annual remuneration (short-term incentive, STI) and a long-term remuneration with a multi-year valuation basis (long-term incentive plan). Total remuneration also includes benefit commitments, other commitments and ancillary benefits.
The fixed salary is cash remuneration 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 salary 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 various management levels from 2022. The methodological revised version of the STI takes into account in particular the recommendations of the Federal Government’s Public Corporate Governance Code. The main focus of the established STI methodology is on operating performance (punctuality) and customer satisfaction, but also takes into account the income situation and respective Board division-specific issues. The annual remuneration is calculated on the basis of the total of five individual targets with equal weightings. Three of these targets relate to the ESG (Environmental, Social, Governance) areas of “Customer,” “Quality” and “Employees,” and another target is the economic performance of DB Group. These four targets 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 arithmetical calculation of the STI, it is possible to modify the arithmetical result by means of a discretionary factor 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. The STI payout cannot exceed 200% of the STI target value (for the last time in 2023). In accordance with the recommendations of the PCGK, supplementary premium and clawback provisions were also agreed with the Management Board members. The financial 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 planning adopted by the Supervisory Board, the personal targets form the basis for calculating the annual remuneration. This means that all of the key parameters for total remuneration 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 consolidated profits. The target remuneration 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 traffic 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 LTI plan has an upper limit and can – for the last time for the 2023 tranche – vary between 0% and 200%. Claims from the LTI plan are inheritable.
During the reporting period, the Supervisory Board continued to develop the remuneration structure of the Management Board in a methodical manner. The weighting of the remuneration components was changed in line with market practice by increasing the share of fixed remuneration and, in particular, the LTI in the interests of long-term and sustainable performance management and consequently reducing the weighting of short-term variable remuneration. Likewise, the caps for the STI as well as for the LTI and thus the maximum achievable remuneration were lowered overall. At the same time, the target key figures for both the STI and the LTI underwent further development. Additional ESG targets were added to the existing targets in the STI, for example in relation to customers and quality. If targets are missed, a newly established attenuation factor reduces the STI result even further beyond the reduction that would have resulted in any case. The changes outlined above will take effect from the 2024 financial year.
The Management Board members are entitled to an appropriate severance package if their contract is terminated before the contractually stipulated termination date, provided there is no good cause for which they are responsible. 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 remuneration components, and must not provide remuneration for more than the remaining term of the employment agreement.
Management Board members do not receive any additional remuneration for mandates exercised in control bodies of Group companies or affiliated companies.
Group-wide remuneration system for executives
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. Where possible, the further development of the remuneration methodology for the Group Management Board carried out in the reporting period was also implemented in the same way for other Group subsidiaries and management levels in 2023. This will also take effect from the 2024 financial year.
The remuneration system for executives aims primarily to closely link remuneration 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 variable remuneration for executives and employees not subject to collective bargaining agreements in the Integrated Rail System is structured as profit-sharing. Personal targets 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 sharing and in decisions to increase the fixed salary.
If executives are member of a corporate body of a DB AG subsidiary, the respective subsidiary’s supervisory board is responsible for discussing the personal targets, 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 the Group’s Management Board are adopted. This chronological sequence of the handling of personal targets 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 (now DB InfraGO AG) is subject to separate regulations which take even greater account of the business success of the company.
Pension entitlements
In accordance with the provisions of the PCGK, the Supervisory Board of DB AG has determined that the Management Board should not include members who have reached the standard retirement age of the statutory pension insurance scheme. 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 since 2017 and thereafter receive a defined contribution 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 beforehand 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.
Contractual ancillary 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.
Remuneration for the 2023 financial year
DB AG Management Board
The variable remuneration for the previous financial year is due at the end of the month in which the company’s Annual General Meeting takes place.
The payment of variable remuneration elements (STI, LTI) for the DB Management Board is prohibited for the 2023 financial year due to the provisions of the Act on the Introduction of an Electricity Price Brake (StromPBG) for the 2023 financial year. The LTI results for the 2020 tranche, which expired at the end of 2023, are therefore reduced by the partial result for the 2023 financial year. The members of the Management Board of DB AG and the Chief Executive Officer and Chairman of the Management Board of DB InfraGO AG will receive the following remuneration for their activities in the year under review:
Total remuneration of the Management Board / € thousand | Fixed remu nera tion | Variable remuneration | Other 4) | Total 5) | ||
Shortterm 1) | Long term (payout of LTI 2020 to 2023) 2) | Longterm 3) | ||||
Incumbent Management Board members of DB AG as of Dec 31, 2023 | ||||||
Dr. Richard Lutz | 990 | – | 164 | –991 | 8 | 1,162 |
Dr. Daniela Gerd tom Markotten | 400 | – | – | – | 15 | 415 |
Dr. Levin Holle | 629 | – | 68 | –138 | 15 | 712 |
Berthold Huber | 715 | – | 104 | –631 | 17 | 837 |
Dr. Sigrid Nikutta | 650 | – | 74 | –151 | 11 | 735 |
Evelyn Palla | 400 | – | – | – | 11 | 411 |
Dr. Michael Peterson | 400 | – | – | – | 13 | 413 |
Martin Seiler | 650 | – | 74 | –451 | 7 | 732 |
Total | 4,834 | – | 485 | –2,361 | 98 | 5,417 |
For information only | ||||||
Incumbent Chief Executive Officer and chairman of the Management Board of DB InfraGO AG on December 31, 2023 (neither incumbent nor former Board member of DB AG) | ||||||
Dr. Philipp Nagl | 400 | 240 | – | 47 | 19 | 659 |
Individual figures are rounded and therefore may not add up.
1) Subject to the resolution of the Supervisory Board.
2) Payment is planned for 2024, subject to the resolution of the Supervisory Board. It relates to the 2020–2023 LTI tranche without the portion for 2023.
3) Long-term variable remuneration relates to the additions to/reversal of provisions for long-term incentives (LTI). No additions were made in the year under review. The provisions formed in previous years for LTI plans 2019 to 2022 were reversed in full in the reporting year, while the provisions formed for LTI plans 2020 to 2023 were adjusted to the expected payout amount by means of a pro rata reversal.
4) Monetary benefits accruing from travel discounts, usage of company cars, and insurance and housing allowances.
5) Total excluding change in provisions for long-term variable remuneration.
In the year under review, no Management Board member of DB AG received benefits or corresponding commitments from a third party with regard to their activities as a member of the Management Board.
Pension benefits for the Management Board for the 2023 financial year
In the year under review, an amount of € 1,684 thousand was added to the pension provisions.
Additions to pension provisions / € thousand | 2023 |
Incumbent Management Board members of DB AG as of Dec 31, 2023 | |
Dr. Richard Lutz | 200 |
Dr. Daniela Gerd tom Markotten | 170 |
Dr. Levin Holle | 169 |
Berthold Huber | 389 |
Dr. Sigrid Nikutta | 167 |
Evelyn Palla | 163 |
Dr. Michael Peterson | 160 |
Martin Seiler | 266 |
Total | 1,684 |
Pension provisions for former Management Board members are shown in total in the Notes to the consolidated financial statements.
Remuneration of the Supervisory Board for the 2023 financial year
The remuneration 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 remuneration and cash outlays, the DB AG Supervisory Board members each receive fixed annual remuneration of € 20,000, plus performance-linked annual remuneration. The performance-based remuneration 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 remuneration 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 remuneration is increased by a quarter for every position held on a committee by the individual Supervisory Board member. This remuneration 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 (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 remuneration for each month or part of a month of their membership. This rule also applies to the increase in remuneration for the Chairman of the Supervisory Board and his or her deputy and to the increase in remuneration for membership and chairmanship of a Supervisory Board committee.
Remuneration 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 remuneration 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.
The payment of variable remuneration elements for the Supervisory Board of DB AG is prohibited for the 2023 financial year due to the regulations of the Law on the Introduction of An Electricity Price Brake (StromPBG) for the 2023 financial year. Only the fixed remuneration is paid out. Subject to the approval of the activities of the Supervisory Board by the Annual General Meeting on March 20, 2024, the members of the Supervisory Board of DB AG will receive the following remuneration for their work during the year under review:
Total remuneration of the Supervisory Board / € thousand | Annual remuneration 2023 | ||||
Fixed remuneration | Variable remuneration | Meeting attendance fee | Ancillary benefits | Total | |
On December 31, 2023, incumbent Supervisory Board members of DB AG 1) | |||||
Werner Gatzer | 70.0 | – | 3.8 | – | 73.8 |
Martin Burkert | 40.0 | – | 3.8 | – | 43.8 |
Ralf Damde | 20.0 | – | 1.8 | 6.9 | 28.6 |
Stefan Gelbhaar | 20.0 | – | 1.8 | – | 21.8 |
Anja Hajduk 2) | – | – | – | 6.9 | 6.9 |
Susanne Henckel | 35.0 | – | 5.3 | – | 40.3 |
Jörg Hensel | 25.0 | – | 2.5 | 0.9 | 28.4 |
Cosima Ingenschay | 25.0 | – | 3.3 | – | 28.3 |
Alexander Kaczmarek | 20.0 | – | 1.5 | 0.9 | 22.4 |
Prof. Dr. Susanne Knorre | 20.0 | – | 1.8 | 6.9 | 28.6 |
Dorothee Martin | 20.0 | – | 1.8 | – | 21.8 |
Daniela Mattheus | 20.0 | – | 1.8 | 6.9 | 28.6 |
Heike Moll | 20.0 | – | 1.8 | 6.9 | 28.6 |
Michael Puschel | 20.0 | – | 1.8 | 6.9 | 28.6 |
Dr. Immo Querner | 40.0 | – | 3.3 | 6.9 | 50.1 |
Bernd Reuther | 20.0 | – | 1.8 | 0.9 | 22.6 |
Manfred Scholze | 20.0 | – | 1.8 | 7.2 | 29.0 |
Klaus-Peter Schölzke | 20.0 | – | 1.8 | – | 21.8 |
Jens Schwarz | 30.0 | – | 3.3 | 6.9 | 40.1 |
Veit Sobek | 20.0 | – | 1.8 | 6.9 | 28.6 |
Members who left the Supervisory Board of DB AG during the year under review 1) | |||||
Supervisory Board remuneration for further mandates at DB subsidiaries | 50.5 | ||||
Total | 673.0 | ||||
Individual figures are rounded and therefore may not add up.
1) Some Supervisory Board members state that their remuneration is to be donated to the Hans Böckler Foundation in line with the directive of the German Trade Union Confederation (Gewerkschaftsbund).
2) Ms. Hajduk has waived the remuneration to which she is entitled for her work as a member of the Supervisory Board, with the exception of the travel discount.
There are no pension obligations for members of the Supervisory Board.
The members of the Supervisory Board did not receive any remuneration in the year under review for any personally provided services.
