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Remuneration of the Supervisory Board
The members of the Supervisory Board received no remuneration for their services.
Remuneration of the Management Board
Total remuneration of the Management Board in the 2010 financial year, including ancillary costs, was
TEUR 2,028 (previous year: TEUR 990) and is broken down as follows:
Individual contracts regarding pension commitments were concluded with Alexander Exner and Wolfgang Pilz.
The Annual General Meeting on 25 March 2009 resolved to set up a stock option programme in the form of an equity-settled plan for members of the Supervisory and Management Boards and to grant 250,000 stock options under this programme to Alexander Exner, Chairman of the Supervisory Board (since 13 December 2010 member
of the Supervisory Board), Alexander Doujak, member of the Supervisory Board (since 13 December 2010 Chairman of the Supervisory Board), and to Management Board members Herbert Ortner, Wolfgang Pilz, and Martin Zehnder.
The objective of the programme is to link the amount of remuneration directly to operating performance. Thus management should be more willing to align its objectives with those of the shareholders of the Company but also have a share in the success of the Company.
Each stock option may be exercised in exchange for one share at an exercise price of EUR 10.12. The stock options may be exercised (one half each) at two exercise dates. In order to be able to exercise stock options, the average ratio of earnings before taxes (EBT ) to revenue as reported in the consolidated financial statements of PALFIN GER AG must have been at least three percent (exercise date 1 in 2012) or five percent (exercise date 2 in 2014) for each of the three balance sheet dates preceding the date the option is exercised.
The maximum number of shares available for subscription is equivalent to the number of options issued. If the EBT ratio is less than three or five percent, no options may be exercised and there is no entitlement to subscription. If the EBT ratio is three or five percent, the entitled person enjoys the right to exercise 25 percent of his stock options at the relevant exercise date. If the EBT ratio exceeds three or five percent, the number of stock options that may be exercised by a person at the relevant exercise date rises in linear progression up to an EBT ratio of seven or eleven percent.
The Annual General Meeting on 31 March 2010 resolved to grant 50,000 stock options to Christoph Kaml,
member of the Management Board.
Each stock option may be exercised in exchange for one share at an exercise price of EUR 16.57. The stock options may be exercised (one half each) at two exercise dates. In order to be able to exercise stock options, the average ratio of earnings before taxes (EBT ) to revenue as reported in the consolidated financial statements of PALFINGER AG must have been at least four percent (exercise date 1 in 2013) or five percent (exercise date 2 in 2015) for each of the three balance sheet dates preceding the date the option is exercised.
The maximum number of shares available for subscription is equivalent to the number of options issued. If the EBT ratio is less than four or five percent, no options may be exercised and there is no entitlement to subscription. If the EBT ratio is four or five percent, the entitled person enjoys the right to exercise 25 percent of his stock options at the relevant exercise date. If the EBT ratio exceeds four or five percent, the number of stock options that may be exercised by a person at the relevant exercise date rises in linear progression up to an EBT ratio of nine or
eleven percent.
The fair value of the options granted is recognised as employee benefits expense and offset against additional paid-in capital in equity. The fair value is determined at the date the option is granted and expensed over a period during which the employees acquire the unconditional entitlement to the options granted (vesting period). A Monte Carlo simulation is used to determine the fair value of options, taking into account the terms and conditions on which the options were granted. The amount, which is to be reported as an expense, is adjusted to take into account the effect of anticipated staff turnover in order to reflect the expected actual number of options that may be exercised in the future.
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