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Remuneration Report

 

This Remuneration Report is a part of the Management Report.

Basic elements of the Executive Board remuneration system
In accordance with the German Stock Corporation Act (Aktiengesetz – AktG), the plenary session of the Supervisory Board is responsible for determining the remuneration for the Executive Board. In September 2013, the Supervisory Board redefined the structure and key elements of the Executive Board remuneration system. The Annual Shareholders’ Meeting on April 25, 2014, approved this system of remuneration for the Executive Board members in accordance with Section 120 (4) AktG. It was applied in 2016 for all Executive Board members in office in this fiscal year.

In 2016, the Supervisory Board once again commissioned an independent consultant to review the system, structure and amount of remuneration for the Executive Board. The conclusion was, firstly, that the remuneration system and structure, as described in detail hereinafter, satisfy the legal requirements and comply with the recommendations of the German Corporate Governance Code. The consultant assessed the amount of remuneration as appropriate overall. In order to raise the direct remuneration, i.e. the fixed and variable remuneration, to the middle of a remuneration range for comparable companies, the consultant, however, proposed that individual elements be increased. After performing its own detailed review and discussions, the Supervisory Board resolved on the adjustments described hereinafter, which take effect as at January 1, 2017. In determining the remuneration of the Executive Board, the Supervisory Board also took account of the remuneration structure that applies in the rest of the corporation and the ratio of the Executive Board remuneration to the remuneration of senior executives and the workforce in Germany as a whole, including its development over time.

Remuneration for Executive Board members consists of fixed remuneration, variable remuneration elements, additional benefits, and retirement benefits.

Each Executive Board member receives fixed annual remuneration paid in twelve monthly installments. The fixed remuneration of the chairman of the Executive Board will be raised as at January 1, 2017, to bring it in line with market development. The fixed remuneration of the other Executive Board members as determined in 2013 will remain unchanged.

The Executive Board members also receive variable remuneration in the form of a performance bonus and a share-based long-term incentive (LTI). The structure of the variable remuneration is geared toward sustainable development of the company as defined in the German Stock Corporation Act and the German Corporate Governance Code, with a future-oriented assessment basis that generally covers several years. The performance bonus is based on a target bonus that the Supervisory Board determines for each Executive Board member for 100% target achievement, and is then calculated in line with the attainment of certain targets relating to the year-on- year change in the Continental Value Contribution (CVC) and the return on capital employed (ROCE). For Executive Board members who are responsible for a particular division, these key figures relate to the relevant division; for other Executive Board members, they relate to the corporation. In addition to the CVC and ROCE targets, the Supervisory Board can determine a strategic target at the beginning of each fiscal year. For 2016, the Supervisory Board had set the target of attaining a specific free cash flow for the corporation. If specified minimum values are not achieved, the performance bonus can also decrease to zero. In order to take into account extraordinary factors that have influenced the degree to which targets are achieved, the Supervisory Board has the right – at its due discretion – to retroactively adjust the established attainment of goals on which the calculation of the performance bonus is based by up to 20% upward or downward. In any event, the performance bonus is capped at 150% of the target bonus. This applies irrespective of whether an additional strategic target is resolved.

The performance bonus achieved in a fiscal year is divided into a lump sum, which is paid out as an annual bonus (immediate payment), and a deferred payment (deferral). Under the agreements applicable until December 31, 2013, the immediate payment amounted to 40% of the performance bonus while the deferral amounted to 60%. Since 2014, the immediate payment has amounted to 60% and the deferral 40%. The deferral is converted into virtual shares of Continental AG. Following a holding period of three years after the end of the fiscal year for which variable remuneration is awarded, the value of these virtual shares is paid out together with the value of the dividends that were distributed for the fiscal years of the holding period. The conversion of the deferral into virtual shares and payment of their value after the holding period are based on the average share price for the three-month period immediately preceding the Annual Shareholders’ Meeting in the year of conversion or payment. However, the amount of a deferral relating to a fiscal year up to and including 2013 that is paid after the holding period may not fall below 50% of the value at the time of conversion or exceed three times this same value. In addition, the Supervisory Board may retroactively revise the amount paid out for such deferrals by up to 20% upward or downward to balance out extraordinary developments. For deferrals acquired in 2014 or subsequent years, there is no guarantee that at least 50% of the initial value of the deferral will be paid out at the end of the holding period, and it is not possible anymore for the Supervisory Board to change the amount to be paid out retroactively. Furthermore, the possible increase in the value of the deferral is capped at 250% of the initial value.

In addition to the performance bonus, a special bonus can be agreed upon for special projects in individual cases or a recognition bonus can be granted. However, a recognition or special bonus of this kind and the performance bonus together must not exceed 150% of the target bonus, and it is also included in the division into immediate payment and deferral.

With the granting of the LTI, the share of long-term components amounts to 60% or more of variable remuneration on the basis of the target values. The LTI plan is resolved by the Supervisory Board on an annual basis with a term of four years in each case. It determines the target bonus to be paid for 100% target achievement for each Executive Board member, taking into account the corporation’s earnings and the member’s individual performance. The first criterion for target achievement is the average CVC that the corporation actually generates in the four fiscal years during the term, starting with the fiscal year in which the tranche is issued. This value is compared to the average CVC, which is set in the strategic plan for the respective period. The degree to which this target is achieved can vary between 0% and a maximum of 200%. The other target criterion is the total shareholder return on Continental shares (share-price performance plus dividends) during the term of the tranche. The degree to which this target is achieved is multiplied by the degree to which the CVC target is achieved to determine the degree of target achievement on which the LTI that will actually be paid after the end of the term is based. It can range between 0% (no payment) and 200% (maximum payment).

In 2013, in anticipation of the plan to be implemented from 2014, the Supervisory Board already granted an LTI to the Executive Board members in office, with the exception of Frank Jourdan. Its conditions correspond to those that apply to the 2013 LTI plan for the senior executives. In addition to a CVC target, this plan does not have a share-based target but does have a target relating to free cash flow in the last year of the term. The 2013 LTI plan is described in detail in the Notes to the Consolidated Financial Statements in the section on employee benefits (Note 24). Frank Jourdan and Hans Jürgen Duensing remain entitled to LTI that were granted to them as senior executives between 2010 and 2013 or 2011 and 2014 respectively.

Starting from January 1, 2017, the target amounts for the performance bonus and the LTI will be increased to raise the total remuneration of the Executive Board members to the middle of a remuneration range of comparable companies in each case.

Executive Board members also receive additional benefits, primarily the reimbursement of expenses, including any relocation expenses and payments – generally for a limited time – for a job-related second household, the provision of a company car, and premiums for group accident and directors’ and officers’ (D&O) liability insurance. The D&O insurance policy provides for an appropriate deductible in line with the requirements of Section 93 (2) Sentence 3 AktG. For longer periods working abroad, benefits are granted in line with the foreign assignment guidelines for senior executives. As a rule, members of the Executive Board must pay taxes on these additional benefits.

Continued remuneration payments have also been agreed for a certain period in the event of employment disability through no fault of the Executive Board member concerned.

All members of the Executive Board have been granted postemployment benefits that are paid starting at the age of 63 (but not before they leave the service of the company) or in the event of disability.

From January 1, 2014, the company pension for the members of the Executive Board was changed from a purely defined benefit to a defined contribution commitment. A “capital component” is credited to the Executive Board member’s pension account each year. To determine this, an amount equivalent to 20% of the sum of the fixed remuneration and the target value of the performance bonus is multiplied by an age factor representing an appropriate return. The future benefit rights accrued until December 31, 2013, have been converted into a “starting component” in the capital account. When the insured event occurs, the benefits are paid out as a lump sum, in installments or – as is normally the case due to the expected amount of the benefits – as a pension. Overall, the level of the benefits has fallen to around 80% of the previous commitments due to the conversion. Post-employment benefits are adjusted after commencement of such benefit payments in accordance with Section 16 of the German Company Pensions Law (Betriebsrentengesetz – BetrAVG).

In the employment contracts it has been agreed that, in the event of premature termination of Executive Board work, payments to the Executive Board member that are to be agreed, including the additional benefits, shall not exceed the value of two annual salaries or the value of remuneration for the remaining term of the employment contract for the Executive Board member. There are no compensation agreements with the members of the Executive Board for the event of a takeover bid or a change of control at the company. Heinz-Gerhard Wente, who retired on April 30, 2015, received compensation for non-competition in an amount of €686 thousand in 2016 – taking into account his pension entitlements – for a post-contractual non-compete covenant, which was still in place in that year. This amount included a back payment for the previous year, because the starting basis had increased as a result of including realized variable remuneration elements.

Individual remuneration
In the tables below, the benefits, inflows and service costs granted to each active member of the Executive Board are shown separately in accordance with the recommendations of Section 4.2.5 para. 3 of the German Corporate Governance Code.

Dr. E. Degenhart
(Board chairman; Board member since August 12, 2009)
  Remuneration granted Inflows
in € thousands 2015 2016 2016 (min.) 2016 (max.) 2015 2016
Fixed remuneration 1,350 1,350 1,350 1,350 1,350 1,350
Additional benefits 29 102 102 102 29 102
Total 1,379 1,452 1,452 1,452 1,379 1,452
Performance bonus (immediate payment) 1,110 1,110 0 1,665 1,665 1,245
Multiannual variable remuneration 1,940 1,940 0 4,250 3,227 2,230
- Performance bonus (deferral) [3 years] 740 740 0 1,850 3,227 2,230
- Long term incentive [4 years] 1,200 1,200 0 2,400
Total 4,429 4,502 1,452 7,367 6,271 4,927
Service costs 764 900 900 900 764 900
Total remuneration 5,193 5,402 2,352 8,267 7,035 5,827
 
J. A. Avila
(Board member for Powertrain; Board member since January 1, 2010)
  Remuneration granted Inflows
in € thousands 2015 2016 2016 (min.) 2016 (max.) 2015 2016
Fixed remuneration 800 800 800 800 800 800
Additional benefits 34 49 49 49 34 49
Total 834 849 849 849 834 849
Performance bonus (immediate payment) 660 660 0 990 990 641
Multiannual variable remuneration 990 990 0 2,200 2,216 990
- Performance bonus (deferral) [3 years] 440 440 0 1,100 2,216 990
- Long term incentive [4 years] 550 550 0 1,100
Total 2,484 2,499 849 4,039 4,040 2,480
Service costs 460 365 365 365 460 365
Total remuneration 2,944 2,864 1,214 4,404 4,500 2,845
 
Dr. R. Cramer
(Board member for China; Board member since August 12, 2009)
  Remuneration granted Inflows
in € thousands 2015 2016 2016 (min.) 2016 (max.) 2015 2016
Fixed remuneration 800 800 800 800 800 800
Additional benefits 635 475 475 475 635 475
Total 1,435 1,275 1,275 1,275 1,435 1,275
Performance bonus (immediate payment) 660 660 0 990 990 740
Multiannual variable remuneration 990 990 0 2,200 2,249 844
- Performance bonus (deferral) [3 years] 440 440 0 1,100 2,249 844
- Long term incentive [4 years] 550 550 0 1,100
Total 3,085 2,925 1,275 4,465 4,674 2,859
Service costs 477 611 611 611 477 611
Total remuneration 3,562 3,536 1,886 5,076 5,151 3,470
 
H.-J. Duensing
(Board member for ContiTech; Board member since May 1, 2016)
  Remuneration granted Inflows
in € thousands 2015 2016 2016 (min.) 2016 (max.) 2015 2016
Fixed remuneration 533 800 800 800 533 800
Additional benefits 10 54 54 54 10 54
Total 543 854 854 854 543 854
Performance bonus (immediate payment) 443 660 0 990 133 965
Multiannual variable remuneration 845 990 0 2,200 145 140
- Performance bonus (deferral) [3 years] 295 440 0 1,100
- Long term incentive [4 years] 550 550 0 1,100 145 140
Total 1,831 2,504 854 4,044 821 1,959
Service costs 348 516 516 516 348 516
Total remuneration 2,179 3,020 1,370 4,560 1,169 2,475
 
F. Jourdan
(Board member for Chassis & Safety; Board member since September 25, 2013)
  Remuneration granted Inflows
in € thousands 2015 2016 2016 (min.) 2016 (max.) 2015 2016
Fixed remuneration 800 800 800 800 800 800
Additional benefits 36 60 60 60 36 60
Total 836 860 860 860 836 860
Performance bonus (immediate payment) 660 660 0 990 990 303
Multiannual variable remuneration 990 990 0 2,200 181 175
- Performance bonus (deferral) [3 years] 440 440 0 1,100
- Long term incentive [4 years] 550 550 0 1,100 181 175
Total 2,486 2,510 860 4,050 2,007 1,338
Service costs 572 305 305 305 572 305
Total remuneration 3,058 2,815 1,165 4,355 2,579 1,643
 
H. Matschi
(Board member for Interior; Board member since August 12, 2009)
  Remuneration granted Inflows
in € thousands 2015 2016 2016 (min.) 2016 (max.) 2015 2016
Fixed remuneration 800 800 800 800 800 800
Additional benefits 37 47 47 47 37 47
Total 837 847 847 847 837 847
Performance bonus (immediate payment) 660 660 0 990 990 282
Multiannual variable remuneration 990 990 0 2,200 1,201 844
- Performance bonus (deferral) [3 years] 440 440 0 1,100 1,201 844
- Long term incentive [4 years] 550 550 0 1,100
Total 2,487 2,497 847 4,037 3,028 1,973
Service costs 465 277 277 277 465 277
Total remuneration 2,952 2,774 1,124 4,314 3,493 2,250
 
Dr. A. Reinhart
(Board member for Human Relations; Board member since October 1, 2014)
  Remuneration granted Inflows
in € thousands 2015 2016 2016 (min.) 2016 (max.) 2015 2016
Fixed remuneration 800 800 800 800 800 800
Additional benefits 11 37 37 37 11 37
Total 811 837 837 837 811 837
Performance bonus (immediate payment) 660 660 0 990 990 740
Multiannual variable remuneration 990 990 0 2,200
- Performance bonus (deferral) [3 years] 440 440 0 1,100
- Long term incentive [4 years] 550 550 0 1,100
Total 2,461 2,487 837 4,027 1,801 1,577
Service costs 736 473 473 473 736 473
Total remuneration 3,197 2,960 1,310 4,500 2,537 2,050
 
W. Schäfer
(Board member for Finance; Board member since January 1, 2010)
  Remuneration granted Inflows
in € thousands 2015 2016 2016 (min.) 2016 (max.) 2015 2016
Fixed remuneration 1,100 1,100 1,100 1,100 1,100 1,100
Additional benefits 28 44 44 44 28 44
Total 1,128 1,144 1,144 1,144 1,128 1,144
Performance bonus (immediate payment) 660 660 0 990 990 740
Multiannual variable remuneration 1,090 1,090 0 2,400 2,482 1,715
- Performance bonus (deferral) [3 years] 440 440 0 1,100 2,482 1,715
- Long term incentive [4 years] 650 650 0 1,300
Total 2,878 2,894 1,144 4,534 4,600 3,599
Service costs 525 526 526 526 525 526
Total remuneration 3,403 3,420 1,670 5,060 5,125 4,125
 
N. Setzer
(Board member for Tires; Board member since August 12, 2009)
  Remuneration granted Inflows
in € thousands 2015 2016 2016 (min.) 2016 (max.) 2015 2016
Fixed remuneration 800 800 800 800 800 800
Additional benefits 44 81 81 81 44 81
Total 844 881 881 881 844 881
Performance bonus (immediate payment) 660 660 0 990 946 885
Multiannual variable remuneration 990 990 0 2,200 2,138 1,585
- Performance bonus (deferral) [3 years] 440 440 0 1,100 2,138 1,585
- Long term incentive [4 years] 550 550 0 1,100
Total 2,494 2,531 881 4,071 3,928 3,351
Service costs 543 735 735 735 543 735
Total remuneration 3,037 3,266 1,616 4,806 4,471 4,086
 
H.-G. Wente
(Board member for ContiTech; Board member from May 3, 2007 to April 30, 2015)
  Remuneration granted Inflows
in € thousands 2015 2016 2016 (min.) 2016 (max.) 2015 2016
Fixed remuneration 267 267
Additional benefits 25 25
Total 292 292
Performance bonus (immediate payment) 217 65
Multiannual variable remuneration 190 2,303 1,438
- Performance bonus (deferral) [3 years] 145 2,303 1,438
- Long term incentive [4 years] 45
Total 699 2,660 1,438
Service costs 0 0
Total remuneration 699 2,660 1,438
 

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The disclosures on benefits granted and inflows are broken down into fixed and variable remuneration components and supplemented by disclosures on the service costs. The fixed remuneration components include the non-performance-related fixed remuneration and additional benefits. The variable performance-related remuneration components consist of the immediate payment from the performance bonus as a short-term remuneration component and the two long-term components: the deferral of the performance bonus and the LTI.

The immediate payment, the deferral (taking into account the reference tables as recommended in Section 4.2.5, para. 3 of the German Corporate Governance Code), and the LTI are each recognized as benefits granted at the value of the commitment at the time it is granted (equivalent to 100% target achievement). The remuneration elements are supplemented by disclosures on individually attainable maximum and minimum remuneration.

The inflow recognized in the year under review comprises the fixed remuneration components actually received plus the amounts of the immediate payment to be received in the following year that had been determined at the time the remuneration report was prepared. Disclosures on the two long-term components – the deferral and the LTI – relate to actual payments in the year under review. There were no inflows from multiannual variable remuneration that was scheduled to end in the period under review, but would not be paid until the following year. In line with the recommendations of Section 4.2.5 para. 3 of the German Corporate Governance Code, service costs in the disclosures on inflows correspond to the amounts granted, although they do not represent actual inflows in a stricter sense.

In fiscal 2016, the members of the Executive Board neither received nor were promised payments by a third party with respect to their activities on the Executive Board.

Remuneration of the Executive Board in 2016
  Remuneration components
in € thousands Fixed1 Variable,
short-term
Variable,
long-term 2
Total Share-based
payment 3
Dr. E. Degenhart 1,452 1,245 2,030 4,727 550
J. A. Avila 849 641 977 2,467 288
Dr. R. Cramer 1,275 740 1,044 3,059 367
H.-J. Duensing 854 965 1,192 3,011 953
F. Jourdan 860 303 752 1,915 294
H. Matschi 847 282 738 1,867 -13
Dr. A. Reinhart 837 740 1,044 2,621 795
W. Schäfer 1,144 740 1,144 3,028 200
N. Setzer 881 885 1,140 2,906 298
Total 8,999 6,541 10,061 25,601 3,732

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Remuneration of the Executive Board in 2015
  Remuneration components
in € thousands Fixed1 Variable,
short-term
Variable,
long-term 2
Total Share-based
payment 3
Dr. E. Degenhart 1,379 1,665 2,310 5,354 4,296
J. A. Avila 834 990 1,210 3,034 2,280
Dr. R. Cramer 1,435 990 1,210 3,635 2,181
H.-J. Duensing (since May 1, 2015) 543 133 639 1,315 809
F. Jourdan 836 990 1,210 3,036 1,552
H. Matschi 837 990 1,210 3,037 2,151
Dr. A. Reinhart 811 990 1,210 3,011 1,363
W. Schäfer 1,128 990 1,310 3,428 2,688
N. Setzer 844 946 1,181 2,971 2,400
H.-G. Wente (until April 30, 2015) 292 65 88 445 636
Total 8,939 8,749 11,578 29,266 20,356

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Share-based payment – performance bonus (deferral)
The amounts of variable remuneration converted into virtual shares of Continental AG for members of the Executive Board changed as follows:

in units Number of shares as at Dec. 31, 2014 Payment Commit-
ments
Number of shares as at Dec. 31, 2015 Payment Commit-
ments
Number of shares as at Dec. 31, 2016
Dr. E. Degenhart 32,953 -15,660 4,520 21,813 -11,169 5,836 16,480
J. A. Avila 20,352 -10,757 609 10,204 -4,801 3,471 8,874
Dr. R. Cramer 18,047 -10,917 2,688 9,818 -4,226 3,471 9,063
H.-J. Duensing (since May 1, 2016) 465 465
F. Jourdan 427 2,901 3,328 3,471 6,799
H. Matschi 14,853 -5,828 2,795 11,820 -4,231 3,471 11,060
Dr. A. Reinhart (since October 1, 2014) 677 677 3,471 4,148
W. Schäfer 25,349 -12,047 2,688 15,990 -8,592 3,471 10,869
N. Setzer 22,521 -10,376 2,643 14,788 -7,937 3,316 10,167
E. Strathmann (until April 25, 2014) 11,971 11,971 -7,732 4,239
H.-G. Wente (until April 30, 2015) 22,031 -11,175 2,002 12,858 -6,875 228 6,211
Total 168,504 -76,760 21,523 113,267 -55,563 30,671 88,375

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in € thousands Fair value as at Dec. 31, 2014 Fair value of distri-
bution
Change in fair value Fair value of commit-
ments
Fair value as at Dec. 31, 2015 Fair value of distri-
bution
Change in fair value Fair value of commit-
ments
Fair value as at Dec. 31, 2016
Dr. E. Degenhart 5,918 -3,227 1,309 1,032 5,032 -2,230 -751 1,100 3,151
J. A. Avila 3,656 -2,216 777 139 2,356 -958 -354 655 1,699
Dr. R. Cramer 3,244 -2,249 653 614 2,262 -844 -342 655 1,731
H.-J. Duensing (since May 1, 2016) 88 88
F. Jourdan 76 22 662 760 -123 655 1,292
H. Matschi 2,664 -1,201 622 638 2,723 -845 -416 655 2,117
Dr. A. Reinhart (since Oct. 1, 2014) 155 155 -25 655 785
W. Schäfer 4,550 -2,482 1,008 614 3,690 -1,715 -548 655 2,082
N. Setzer 4,044 -2,138 902 604 3,412 -1,585 -507 625 1,945
E. Strathmann (until April 25, 2014) 2,139 628 2,767 -1,544 -403 820
H.-G. Wente (until April 30, 2015) 3,957 -2,303 855 457 2,966 -1,373 -440 43 1,196
Total 30,248 -15,816 6,776 4,915 26,123 -11,094 -3,909 5,786 16,906

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Heinz-Gerhard Wente, who retired on April 30, 2015, was granted commitments of €43 thousand (equivalent to 228 units) and was paid €1.4 million (equivalent to 6,875 units) in 2016. As at December 31, 2016, there were commitments with a fair value of €1.2 million (equivalent to 6,211 units). Elke Strathmann, whose appointment as member of the Executive Board and employment contract ended as at April 25, 2014, was paid €1.5 million (equivalent to 7,732 units). As at December 31, 2016, there were commitments with a fair value of €0.8 million (equivalent to 4,239 units).

Owing to the individual arrangements specific to the company, there are certain features of the virtual shares as compared to standard options that must be taken into account in their measurement.

A Monte Carlo simulation is used in the measurement of stock options. This means that log-normal distributed processes are simulated for the price of Continental shares. The measurement model also takes into account the average value accumulation of share prices in the respective reference period and the floor and cap for the distribution amount.

The following parameters were used as at the measurement date of December 31, 2016:

  • Constant zero rates as at the measurement date of December 31, 2016:
    Tranche in 2013: -0.97% as at the due date and as at the expected payment date;
    Tranche in 2014: -0.82% as at the due date and as at the expected payment date;
    Tranche in 2015: -0.80% as at the due date and as at the expected payment date.
  • Interest rate based on the yield curve for government bonds.
  • Dividend payments as the arithmetic mean based on publicly available estimates for 2017 and 2018; the dividend of Continental AG amounted to €3.75 per share in 2016, and Continental AG distributed a dividend of €3.25 per share in 2015.
  • Historic volatilities on the basis of daily XETRA closing rates for Continental shares based on the respective remaining term for virtual shares. The volatility for the 2013 tranche is 20.81%, for the 2014 tranche 28.73%, and for the 2015 tranche 29.49%.

Share-based payment – long term incentive (LTI plans starting with 2014)
The LTI plans starting with 2014 developed as follows:

in € thousands Fair value as at Dec. 31, 2014 Commitment
LTI Plan 2015
Change in
fair value
Fair value
as at
Dec. 31, 2015
Commitment
LTI Plan 2016
Change in
fair value
Fair value as at Dec. 31, 20161
Dr. E. Degenhart 1,274 1,200 624 3,098 1,200 -720 3,578
J. A. Avila 584 550 286 1,420 550 -330 1,640
Dr. R. Cramer 584 550 286 1,420 550 -330 1,640
H.-J. Duensing (since May 1, 2016) 106 550 170 826 550 -238 1,138
F. Jourdan 584 550 286 1,420 550 -330 1,640
H. Matschi 584 550 286 1,420 550 -330 1,640
Dr. A. Reinhart (since October 1, 2014) 550 145 695 550 -219 1,026
W. Schäfer 690 650 338 1,678 650 -390 1,938
N. Setzer 584 550 286 1,420 550 -330 1,640
H.-G. Wente (until April 30, 2015) 584 45 -3301 299 -48 251
Total 5,574 5,745 2,377 13,696 5,700 -3,265 16,131

The following parameters were used as at the measurement date of December 31, 2016:

  • Constant zero rates as of the measurement date of December 31, 2016:
    2014 LTI plan: -0.84% as at the due date and -0.81% as at the expected payment date;
    2015 LTI plan: -0.81% as at the due date and -0.79% as at the expected payment date;
    2016 LTI plan: -0.76% as at the due date and -0.70% as at the expected payment date.
  • Interest rate based on the yield curve for government bonds.
  • Dividend payments as the arithmetic mean based on publicly available estimates for the years 2017 to 2019; the dividend of Continental AG amounted to €3.75 per share in 2016.
  • Historic volatilities on the basis of daily XETRA closing rates for Continental shares based on the respective remaining term for virtual shares. The volatility for the 2014 LTI plan is 28.64%, for the 2015 LTI plan 29.58%, and for the 2016 LTI plan 28.37%.

Expenses for retirement benefits
The defined benefit obligations for all pension commitments for the active members of the Executive Board in 2016 are presented below:

  Defined benefit obligations
in € thousands Dec. 31, 2016 Dec. 31, 2015
Dr. E. Degenhart 10,535 8,560
J. A. Avila 7,145 5,913
Dr. R. Cramer 3,661 2,671
H.-J. Duensing (since May 1, 2016) 1,094 612
F. Jourdan 2,297 1,447
H. Matschi 4,913 3,751
Dr. A. Reinhart 2,041 981
W. Schäfer 8,925 7,242
N. Setzer 4,165 2,904
Total 44,776 34,081

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We refer to Note 38 of the Notes to the Consolidated Financial Statements for details of pension obligations for former members of the Executive Board.

Remuneration of the Supervisory Board
Article 16 of the Articles of Incorporation regulates the remuneration paid to members of the Supervisory Board. This remuneration also has fixed and variable components. The variable component is aligned with the sustainable development of the company. The chairman and vice chairman of the Supervisory Board and the chairs and members of committees qualify for higher remuneration.

In addition to their remuneration, the members of the Supervisory Board are also paid attendance fees and their expenses are reimbursed. The D&O insurance policy also covers members of the Supervisory Board. As recommended by the German Corporate Governance Code, their deductible also complies with the requirements of Section 93 (2) Sentence 3 AktG that apply directly to the Executive Board only.

In the past year there were no consultant agreements or other service or work agreements between the company and members of the Supervisory Board or related parties.

The remuneration of individual Supervisory Board members in 2016 as provided for under these arrangements is shown in the following table.

Remuneration of the Supervisory Board
  Remuneration components
  2016 2015
in € thousands Fixed1 Variable Fixed1 Variable
Prof. Dr.-Ing. Wolfgang Reitzle 232 301 232 262
Hartmut Meine2 119 151 118 132
Dr. Gunter Dunkel 81 101 81 87
Hans Fischl2 81 101 81 87
Prof. Dr. Peter Gutzmer 79 101 81 87
Peter Hausmann2 121 151 122 132
Michael Iglhaut2 92 113 81 87
Prof. Dr. Klaus Mangold 80 101 81 87
Sabine Neuß 81 101 81 87
Prof. Dr. Rolf Nonnenmacher 198 251 198 219
Dirk Nordmann2 122 151 122 132
Artur Otto (until April 30, 2015)2 27 28
Klaus Rosenfeld 121 151 119 132
Georg F. W. Schaeffler 124 151 123 132
Maria-Elisabeth Schaeffler-Thumann 79 101 81 87
Jörg Schönfelder2 120 151 120 132
Stefan Scholz (since April 30, 2015)2 81 101 55 58
Kirsten Vörkel2 81 101 81 87
Elke Volkmann2 78 101 81 87
Erwin Wörle2 111 136 122 132
Prof. KR Ing. Siegfried Wolf 80 101 81 87
Total 2,161 2,717 2,168 2,361

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