What are investor expectations regarding reporting and transparency on remuneration systems? What expectations do companies have? How should a transparent and comprehensible remuneration system be presented?


2.1. The remuneration report should explain the remuneration system and the resulting amounts of remuneration clearly and concisely, including the use of suitable charts and tables.

2.2. For each management board member, the remuneration report must cover: the amount of remuneration, the performance metrics, explanations on the pay-for-performance relationship, the maximum achievable remuneration level – and under which conditions this can be achieved.

2.3. At least on an ex-post basis, the remuneration report should cover the underlying KPIs for every variable remuneration component, the target levels (threshold, target and maximum amounts), their weightings and the achievement of the objectives for the past business year.

Explanation: A transparent presentation should enable to verify the company’s performance and to justify the resulting remuneration amounts. KPIs that do not originate from a recognised accounting standard have to be explained in detail and by their origin.

2.4. The remuneration report should state the factors that led the supervisory board to exercise any discretion for both positive and negative pay decisions for management board members.

2.5. Extraordinary one-time payments outside the established remuneration system shall be avoided. If exceptionally granted, they should be made transparent and adequately justified.

2.6. Remuneration increases should be presented clearly and adequately justified. This should include the peer group companies that were chosen as a comparative yardstick.

2.7. The relationship between the remuneration of the management board, the remuneration of senior management and the overall workforce should be reported in a relevant form on a multi-year basis. For this purpose, the supervisory board should determine the delineation between the senior management and the relevant workforce.

Guidelines for sustainable management board remuneration systems: DESIGN – REPORTING – ENGAGEMENT