Performance-based compensation of top executives
At the end of 2012, we reviewed the remuneration policies for our top executives and integrated them into our new remuneration principles and leadership guidelines. Our new remuneration system PERFORM & REWARD comprises a fixed monthly base salary and variable compensation components whose total is tied to our company’s business performance. The total amount of variable compensation is determined in part by an executive’s individual role in the creation of additional customer value and his or her efforts to practice the leadership principles of our company on the job each day. The new system was introduced on a binding basis during the financial year 2013.
The remuneration model of the top managers of METRO GROUP, or the executives, is based on the following four principles:
- Fair and consistent compensation – comparable positions at METRO GROUP receive comparable pay. The basis for this is our internal grading system for job profiles.
- Performance-based pay – the amount of variable compensation is tied to the company’s business performance and the role played by the executives. By linking individual performance and goal achievement to variable compensation, we strengthen executives’ shared sense of responsibility for the company’s overall success.
- Market-driven and appropriate salaries – we regularly assess the remuneration level of comparable companies to ensure that we offer competitive compensation. But we must be always able to afford to pay the remuneration. This means that it must reflect the business performance of METRO GROUP.
- Encouragement of role-model behaviour – the variable compensation total is also based on whether METRO GROUP’s management principles are being integrated into everyday business activities and, as a result, are furthering our strategy to create customer value and achieve the highest levels of operational performance.
The primary elements of our remuneration model are the base salary, one-year compensation (short-term incentive) and multi-year variable compensation (long-term incentive). In addition, METRO GROUP provides its executives with a company pension scheme that includes both contribution- and performance-based components. The contribution-based components are financed in equal parts by the company and the executive.
Additional information on compensation at METRO GROUP can be found in chapter 9 Remuneration report.