Total remuneration and related compensation costs
The total remuneration and related compensation costs of the members of the Board of Directors related to 2011 and 2010 can be summarised as follows:
Non-Executive members of the Board of Directors
|Fixed fees (1)||1,170,000||1,170,000|
|Fees for participation in meetings||425,000||520,000|
Executive members of the Board of Directors
Annual variable remuneration
(related to reporting period including part paid by EADS NV)
(1) The fixed fees related to 2010 were paid in 2011; the fixed fees related to 2011 will be paid in 2012.
The cash remuneration of the Non-Executive members of the Board of Directors related to 2011 was as follows:
Fixed fees (1)
|Juan Manuel Eguiagaray Ucelay||80,000||40,000||120,000|
|Lakshmi N. Mittal (2)||80,000||30,000||110,000|
Sir John Parker
(1) The fixed fees will be paid in 2012.
(2) Excluding the fees related to 2010 paid in 2011.
The cash remuneration of the Executive member of the Board of Directors related to 2011 was as follows:
Annual Variable Remuneration related to 2011
The table below gives an overview of the performance units granted to the Chief Executive Officer in 2011 pursuant to the Long Term Incentive Plans:
|Unit plan: number of performance units* ||granted |
|Louis Gallois||51,400|| |
Vesting schedule is made up
a) 25% expected in May 2015;
(*) Vesting of all performance units granted to the Chief Executive Officer is subject to performance conditions.
The twelve members of the Executive Committee have pension promises as part of their employment agreements. The general policy is to give them annual pensions of 50% of their annual base salary upon reaching five years of service in the Executive Committee of EADS, payable once they reach retirement age.
These rights can gradually increase to 60% after a second term, usually after ten years of service in the Executive Committee. However, in order to reach this 60% replacement ratio the respective member of the Executive Committee must also have 12 years of seniority within the Group.
These pension schemes have been implemented through collective executive pension plans in France and Germany. These pension promises also have separate rules, e.g. for minimum length of service and other conditions to comply with national regulations.
For the Chief Executive Officer, the amount of the pension defined benefit obligation (i.e. the book cash value) amounted to € 2.9 million as of 31 December 2011, while the amount of current service and interest cost related to his pension promise accounted for the financial year 2011 represented an expense of € 0.6 million. This obligation has been accrued in the Consolidated Financial Statements.
Non-executive Members of the Board of Directors do not receive pension benefits.
As part of his mandate contract, the Chief Executive Officer is entitled to a termination indemnity when the departure results from a decision by the Company in case of change in control or change in the Company’s strategy. Payment of the termination indemnity is also subject to performance conditions as fixed and assessed by the Board of Directors. The termination indemnity, if applicable, would amount to a maximum of 18 months of annual total target remuneration.
However this termination indemnity rule is not applicable, since the Chief Executive Officer has reached the age of 65 and is able to retire immediately.
Non-executive Members of the Board of Directors do not have a termination indemnity.
A non-competition clause is included in the terms of the Chief Executive Officer’s mandate, applicable for one-year starting at the end of the mandate contract, and renewable for another year at the Company’s initiative. The clause envisages a compensation equal to 50% of the last target annual salary, defined as the base salary plus the last paid annual variable remuneration. The application of the clause is subject to a Board of Directors’ decision.
The Chief Executive Officer has pro-actively renounced the benefit of such compensation, while remaining tied by the non-compete clause; the Board of Directors has agreed to this request.
The Chief Executive Officer is entitled to a company car. The value of his company car as of 31 December 2011 is € 24,120 (excluding VAT).