1. Remuneration of the Executive Board

The full Supervisory Board is responsible for determining the total emoluments of each individual member of the Executive Board. In line with the procedural rules of the Supervisory Board, it is incumbent upon the Standing Committee to do the groundwork so that the Supervisory Board can pass resolutions relating to remuneration.

The remuneration system for the Executive Board, described in more detail below, has applied since 1 January 2012. It was approved at the 2012 Annual General Meeting of Linde Aktiengesellschaft with a majority of 96.45 percent. With effect from 1 January 2014, the Supervisory Board made minor amendments to take account of the corresponding changes to the German Corporate Governance Code. No amendments were made in 2015.

The amount and structure of the remuneration payable are based on the size and international reach of the Group, its economic and financial situation, its performance and prospects and the unit of the Group for which the Executive Board member is responsible, as well as on customary remuneration practice among peers and the remuneration structure which applies elsewhere in the company. To gauge customary practice among peers, Linde compares its remuneration system with that of several other groups of companies (DAX 30 companies, similar German and international companies). As regards the remuneration structure which applies elsewhere in the company, the Supervisory Board considers when determining the emoluments of the Executive Board the relationship between the remuneration of the Executive Board and that of senior management and the staff overall, also in terms of its development over time. To do so, it has established how to identify members of senior management and the relevant members of staff. The emoluments also depend on the duties of each individual member of the Executive Board, and on his or her personal performance and the performance of the Executive Board as a whole. The remuneration is calculated so that it is competitive at international level and gives Board members an incentive to create sustainable performance and sustainable growth in a dynamic environment. In its evaluation and weighting of various criteria, the Supervisory Board was advised by an independent external expert on executive pay. The amounts of the fixed cash emoluments and the variable remuneration components were subject to a scheduled review as at 1 January 2014 and some adjustments were made. No adjustments were made in 2015.

The remuneration system places particular emphasis on sustainable business development. There is a significant focus on multi-year remuneration components. As a result of the obligation to invest part of the variable cash emoluments in Linde shares and to hold those shares for several years and as a result of the granting of a Long Term Incentive Plan in the form of options to purchase Linde shares (performance shares) and bonus shares (matching shares) after compulsory personal investment by the Executive Board member, the remuneration of the members of the Executive Board is linked to the price of Linde shares. This creates a long-term incentive to achieve a positive Group performance.

The members of the Executive Board receive no remuneration for any Group offices held.

Total emoluments

The remuneration system comprises the following components:

  • fixed monthly cash emoluments;
  • benefits in kind/other benefits;
  • variable cash emoluments which are paid in cash in April of the following year linked to an obligation to use 40 percent of the cash amount (after the deduction of tax) to acquire Linde shares and hold them for a period of at least four years;
  • a Long Term Incentive Plan, which provides for multi-year share-based remuneration in the form of options to purchase shares (performance shares) and bonus shares linked to personal investment by the Executive Board member (matching shares);
  • pension commitments.

Of these components, the fixed cash emoluments, the benefits in kind/other benefits and the pension commitments are not performance-related, while the variable cash emoluments and the Long Term Incentive Plan are performance-related.

The regular target remuneration for a year (i. e. the total of fixed cash emoluments, variable cash emoluments and entitlements under the Long Term Incentive Plan) comprises the following targets for the performance-related entitlements:

  • 25 percent fixed cash emoluments;
  • 30 percent one-year variable cash emoluments;
  • 45 percent multi-year variable emoluments, of which:
    • around 50 percent obligatory investment in Linde shares required to be held for at least four years;
    • around 50 percent share-based remuneration components from the Long Term Incentive Plan, of which:
      • 80 percent performance shares;
      • 20 percent matching shares.

The relative weighting of fixed and variable remuneration components is therefore around 25 percent (fixed cash emoluments) to around 75 percent (variable cash emoluments, performance shares and matching shares), while within the variable remuneration components around 40 percent is determined solely on a one-year basis and around 60 percent on a multi-year basis. As a result, the remuneration system is highly performance-related and determined predominantly on a multi-year basis. Around 65 percent of the variable emoluments are directly linked with performance indicators or long-term management targets.

Fixed cash emoluments

Each member of the Executive Board receives fixed monthly cash emoluments.

Benefits in kind/Other benefits

Benefits in kind are also provided which are taxed in accordance with the fiscal regulations applicable in each case. They comprise mainly the cost or monetary advantage of insurance benefits at normal market rates and the provision of company cars.

Variable cash emoluments

Variable cash emoluments are based on two equally-weighted key ratios, return on capital employed (ROCE) and the operating margin, based on the customary definitions used by the Group which are given on in chapter Value-based management. For each of the two measurement factors, a minimum target is defined in the form of an ambitious performance hurdle. If this hurdle is not reached in respect of one of the measurement factors, the variable cash emoluments linked to this factor are not paid. If neither minimum target is reached, there is no entitlement at all to variable cash emoluments. The amount of the variable cash emoluments based on reaching the ROCE and operating margin targets may be modified by an individual performance component.

If the entitlement to variable cash remuneration is met as a result of target achievement, 60 percent of the variable cash remuneration calculated on this basis is paid in cash, with no further obligation attached to the amount (cash component). 40 percent of the total amount of the one-year variable remuneration is paid in cash at the same time as the cash component, but there is an obligation on the Executive Board member to re-invest this portion of the total amount in Linde AG shares (deferral component). The member of the Executive Board must invest the net amount of the deferral component (estimated to be 50 percent of the gross amount) in Linde shares and must hold these shares for a period of at least four years.

Measurement factors for variable cash emoluments Group ROCE

The variable cash remuneration for all the members of the Executive Board is based on the Group ROCE achieved in the financial year, to the extent that each member receives a fixed euro amount for each 0.1 percent of Group ROCE achieved. The variable cash remuneration is only paid if Group ROCE exceeds or equals an ambitious minimum return on capital which has been defined (performance hurdle).

Operating margin

The variable cash remuneration is based on the operating margin achieved in the area for which the Executive Board member is responsible. The operating margin is calculated as the ratio of operating profit (EBITDA) to revenue. A fixed euro amount is paid to each Board member for each 0.1 percent of operating margin achieved. For the Chief Executive Officer and Chief Financial Officer, this is based on the operating margin of the Group. For those members of the Executive Board responsible for operations, the margin in the gases segments or the Engineering Division for which he or she is responsible is relevant. In both cases, payment is only made if ambitious minimum margins derived from specific market conditions are met. The Supervisory Board may attach additional conditions to the establishment and the amount of the remuneration entitlement linked to the operating margin. These conditions should be set in the light of the prevailing market situation.

Individual performance component

To reflect the personal performance of Executive Board members, the amounts calculated on the basis of the two measurement factors (Group ROCE and the operating margin) are multiplied using a performance multiplier of between 0.8 and 1.2. The Supervisory Board may exercise its discretion to reduce or increase the amounts calculated as a result of the achievement of one or both targets by up to 20 percent, to take account of the individual performance of the Executive Board member.

Deferral component

Of the variable cash remuneration, 40 percent is paid but effectively deferred, as the Executive Board member has an obligation to invest the net amount in Linde shares and to hold these shares for a period of at least four years from the date they are transferred to a securities account (deferral shares). The net amount of the deferral component is paid directly to a bank with instructions to acquire the deferral shares for the Executive Board members in a block order on the third stock exchange trading day after the Annual General Meeting of Linde AG, to transfer the shares to a separate securities account and to manage them. The shares must be newly acquired in the market. It is not possible to use shares for this purpose which are already held by the Executive Board members. The deferral shares carry dividend rights during the blocked period. The dividend is paid to the Executive Board members.

Cap

The cash component (i. e. 60 percent of the variable cash remuneration, calculated on the basis of one or both the targets being met and payable in cash) is capped at 250 percent of the fixed cash emoluments. The deferral component (the remaining 40 percent of the variable cash remuneration) is capped at 165 percent of the fixed cash emoluments as at the date on which it is paid.

In exceptional circumstances which lead to an unforeseen increase in the value of the deferral shares by the end of the blocked period, where this is not due to the performance of the Executive Board member, the Supervisory Board has the right to offset this by reducing the amount of the cash and/or deferral components in subsequent years.

Regular reviews

The Supervisory Board conducts regular reviews of the targets set and the calibration of the variable remuneration, including the performance hurdles, in order to prevent potential distortions. It may also take into account non-recurring items or the specific impact on both measurement factors (Group ROCE and the operating margin) of any investment or acquisition projects.

Share-based emoluments Long Term Incentive Plan 2012

It was resolved at the Annual General Meeting on 4 May 2012 to replace the Linde Performance Share Programme 2007 for the Executive Board and other executives with the new Long Term Incentive Plan 2012 (LTIP 2012). Like the previous programme, this scheme provides for the granting of options to purchase shares in Linde (performance shares). Executive Board members and selected executives are required to make a compulsory personal investment in shares of the company at the beginning of the scheme. For the shares acquired by a scheme participant as a personal investment, bonus shares (matching shares) are granted at the end of the four-year qualifying period if certain conditions are met. The members of the Executive Board are granted options and rights to matching shares for a specified sum. The number of options or matching share rights to be allocated to each member of the Executive Board is determined on the basis of the fair value per option or per right to a matching share at the grant date calculated in an actuarial report. Of the remuneration, 80 percent of the amount which may be earned as a result of participating in the LTIP 2012 if the target is reached relates to performance shares and 20 percent to matching shares. The company has the option of making a payment in cash to the scheme participants instead of issuing performance shares and/or matching shares. In exceptional circumstances, the Supervisory Board may restrict the option rights and matching rights granted to the Executive Board members in terms of content, either in full or in part. The first tranche under the LTIP 2012 was issued after the 2012 Annual General Meeting.

Options to purchase performance shares

The plan participants are granted a certain number of options in various annual tranches. The Supervisory Board determines the allocation of options to members of the Executive Board. Each option confers the right, if certain targets are met, to purchase one share in Linde AG (performance shares) at the exercise price, which is equivalent in each case to the lowest issue price, currently EUR 2.56. The options in a tranche have a five-year term. If the conditions required for the exercise of the options are met, they may first be exercised once a four-year qualifying period calculated from the issue date has expired (the performance period). Options may only be exercised if certain performance targets are reached, which are based on movements in earnings per share and relative total shareholder return. Equal weighting is given to these two performance targets in terms of the total options allocated. Within each of these performance targets, a minimum target must be reached if the options in a particular tranche are to become exercisable, and there is also a stretch target. If the stretch target for one of these performance targets is reached, all the options relating to that performance target in that particular tranche become exercisable. If the minimum target within a performance target is reached, 12.5 percent of all the options in the relevant tranche may be exercised and the plan participant receives a corresponding number of performance shares on payment of the lowest issue price per share. If the relevant stretch target is reached, 50 percent of all the options to purchase performance shares in the relevant tranche may be exercised. If the minimum target is exceeded, but the stretch target is not reached, the number of options that may be exercised is dependent on the percentage by which the minimum target is exceeded.

Further information about the value of the options, and about the structure, conditions and, in particular, the performance targets of the scheme is given in Note [28] of the Notes to the Group financial statements.

Personal investment and matching shares

The number of Linde shares which must be purchased as a personal investment is determined by the Supervisory Board for each member of the Executive Board and corresponds to 20 percent of the target remuneration which may be earned by participating in the LTIP 2012. For each share in Linde acquired by a scheme participant as a personal investment and held by the participant during the four-year qualifying period for the options, one matching share in Linde is granted free of charge. Conditions for granting matching shares are a personal investment in shares of the company by the scheme participant at the appropriate time, the unrestricted holding of such shares during the qualifying period and the existence of a service contract at the end of the qualifying period in respect of which no notice has been given.

Movements in the options and rights to matching shares issued to members of the Executive Board under the Long Term Incentive Plan 2012 were as follows in the period under review:

  (XLS:) Download

Options, matching shares – Long Term Incentive Plan 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

Matching shares

Executive Board members in office at 31.12.2015

 

 

 

At 01.01.

 

Granted in the financial year

 

At 31.12.

 

At 01.01.

 

Granted in the financial year

 

At 31.12.

 

 

 

in units

 

in units

 

in units

 

in units

 

in units

 

in units

1

Rights outstanding at the start of the reporting period from the time spent as an executive in The Linde Group.

2

2014 including Professor Dr Aldo Belloni (member of the Executive Board until 31.12.2014).

Dr Wolfgang Büchele (from 01.05.2014) (Chief Executive Officer from 20.05.2014)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

12,304

 

11,921

 

24,225

 

1,428

 

1,267

 

2,695

 

2014

 

 

12,304

 

12,304

 

 

1,428

 

1,428

Thomas Blades

 

2015

 

21,220

 

5,960

 

27,180

 

2,376

 

633

 

3,009

 

2014

 

15,068

 

6,152

 

21,220

 

1,662

 

714

 

2,376

Dr Christian Bruch (from 01.01.2015)

 

2015

 

2,5921

 

4,470

 

7,062

 

2911

 

475

 

766

 

2014

 

 

 

 

 

 

Georg Denoke

 

2015

 

22,758

 

7,450

 

30,208

 

2,555

 

792

 

3,347

 

2014

 

15,068

 

7,690

 

22,758

 

1,662

 

893

 

2,555

Bernd Eulitz
(from 01.01.2015)

 

2015

 

3,1811

 

4,470

 

7,651

 

3551

 

475

 

830

 

2014

 

 

 

 

 

 

Sanjiv Lamba

 

2015

 

21,220

 

5,960

 

27,180

 

2,376

 

633

 

3,009

 

2014

 

15,068

 

6,152

 

21,220

 

1,662

 

714

 

2,376

Total

 

2015

 

83,275

 

40,231

 

123,506

 

9,381

 

4,275

 

13,656

Total

 

20142

 

60,272

 

38,450

 

98,722

 

6,648

 

4,463

 

11,111

All options held at 31 December 2015 were not yet exercisable. The exercise price of all options is currently EUR 2.56 per option. During the 2015 financial year, none of the options and/or rights to matching shares held by members of the Executive Board expired or were forfeited. Matching shares were not allocated. The weighted average remaining term of the options and rights to matching shares is 1.8 years (2014: 2.3 years).

As a prerequisite for participation in the Long Term Incentive Plan 2012, the Executive Board members made the following personal investment in Linde shares of the company in the 2015 financial year: Dr Wolfgang Büchele 1,267 (2014: 1,428), Thomas Blades 633 (2014: 714), Dr Christian Bruch 475, Georg Denoke 792 (2014: 893), Bernd Eulitz 475 and Sanjiv Lamba 633 (2014: 714).

Information about the rules which apply to the option schemes in the event of a change of control is given in chapter Takeover-related disclosures of the combined management report for Linde AG and The Linde Group (Disclosures in accordance with § 289 (4), § 315 (4) of the German Commercial Code (HGB)).

Total cost of share-based emoluments and remeasurement of virtual shares

The total cost of share-based emoluments in 2015 was EUR 6 m (2014: EUR 18 m). During the financial year, the following cost was recognised in respect of share-based payment instruments held by members of the Executive Board currently in office and the gain on remeasurement of current entitlements to virtual shares in Linde:

  (XLS:) Download

Cost of share-based payments and change in value of existing entitlement to virtual shares

Executive Board members in office at 31.12.2015

in EUR

 

 

 

Cost of share-based payments (without virtual shares)

 

Change in value of virtual shares1

1

In 2012 and 2013, 40 percent of the variable cash remuneration was converted as at the balance sheet date into virtual shares with dividend entitlement and not paid for at least another three years. (The amounts paid in each case are dependent on movements in Linde’s share price.)

2

2014 including Professor Dr Aldo Belloni (Member of the Executive Board until 31.12.2014) and Professor Dr Wolfgang Reitzle (Chairman of the Executive Board until 20.05.2014): Professor Dr Aldo Belloni expense EUR 1,286,012, change in value EUR 74,825; Professor Dr Wolfgang Reitzle expense EUR 2,358,115, change in value EUR 67,165. The share-based emoluments for 2014 include the cost on the retirement of the Board member of all the annual tranches not yet recognised as an expense.

Dr Wolfgang Büchele (from 01.05.2014) (Chief Executive Officer from 20.05.2014)

 

2015

 

395,929

 

 

2014

 

145,802

 

Thomas Blades

 

2015

 

177,881

 

21,856

 

2014

 

322,935

 

47,752

Dr Christian Bruch (from 01.01.2015)

 

2015

 

72,648

 

 

2014

 

 

Georg Denoke

 

2015

 

227,403

 

24,876

 

2014

 

387,603

 

54,349

Bernd Eulitz (from 01.01.2015)

 

2015

 

70,391

 

 

2014

 

 

Sanjiv Lamba

 

2015

 

177,881

 

18,912

 

2014

 

369,368

 

41,320

Total

 

2015

 

1,122,133

 

65,644

Total

 

20142

 

4,869,835

 

285,411

In the statutory financial statements of Linde AG, the company has availed itself of the option not to recognise share-based remuneration systems as personnel expenses, in accordance with legal regulations. For the matching shares of Linde AG employees, a cost of EUR 1.4 m (2014: EUR 1.8 m) was recognised as an expense in accordance with the German Commercial Code (HGB). Of this amount, EUR 0.4 m (2014: EUR 0.9 m) related to rights to matching shares of members of the Executive Board.

Pension commitments

For members joining the Executive Board of the company on or after 1 January 2012, a defined contribution pension scheme was introduced in the form of a direct commitment, which will provide benefits comprising old age pensions, disability pensions and surviving dependants pensions. For new members, the annual contributions made by the company during the period of employment will be 45 percent of the fixed cash emoluments (and therefore around 11 percent of the target emoluments). After 15 years of service on the Board, a target pension level of around 50 percent of the final fixed cash emoluments would be achieved as an old age pension. The capital is invested with an external provider. The pension commitment is designed to be similar to the Linde Pension Plan (Linde Vorsorgeplan) for employees. Insolvency insurance is provided as a result of the integration of the pension commitments into the existing Contractual Trust Arrangement (CTA). The contributions participate in the performance of the CTA and also participate in potential CTA surpluses. The model provides for guaranteed minimum interest of 3 percent plus any overperformance. The regular old age pension is payable from the age of 65 and in the case of early retirement from the age of 62. The employer`s contributions are legally non-forfeitable in accordance with the German Company Pension Act (BetrAVG). The current account balance inclusive guaranteed interest are taken as a basis for calculating the benefits when due. In the case of death or invalidity, a minimum benefit is payable for a period of service on the Board of less than ten years. In this case, the amount payable is topped up by the missing contributions to the amount that would have been payable if the Executive Board member had served on the Board for ten years (up to a maximum age of 65), as long as the period served on the Board was at least three years. Those entitled to the full pension account are, firstly, the widow, widower or surviving civil partner of the Executive Board member and, secondly, orphans of the Executive Board member if there is no widow, widower or surviving civil partner.

The pension payable is calculated on the basis of the mortality tables and interest rates which are valid when the pension is drawn. In all cases, the Executive Board member may choose to have his or her pension paid in one of three ways:

  • as a lump sum;
  • in five to ten annual instalments with the accrual of interest (depending on the term) until the payments are due;
  • in the form of payments for life including an annual increase of 1 percent per annum.

On request and with the Group’s agreement, the Executive Board member may opt for other payment variants.

Pension commitments for Georg Denoke and Sanjiv Lamba, who were already on the Executive Board of the company at 1 January 2012, are set out in individual contracts. The pension is based on a particular percentage of the last fixed monthly pensionable emoluments paid. The percentage rate on entry is 20 percent. This percentage increases by 2 percent for every year of service completed by the Executive Board member. The maximum percentage that can be achieved for the pension is 50 percent of the last fixed monthly emoluments paid. Payments are made on a monthly basis once the member has retired from the Group and is eligible for his or her pension (old age pension from the age of 65, pension for medical disability or incapacity for work, and surviving dependants pension in the event of death). Widowed spouses receive 60 percent of the pension of the deceased member of the Executive Board. The commitments also include benefits for any orphans or children who have lost one parent. Each child entitled to maintenance receives 10 percent (in the case of children who have lost one parent) up to a maximum of 25 percent (in the case of orphans) of the pension of the contracting party, generally until his or her 18th year, although maintenance may continue to be paid until he or she reaches the age of 27. If the deceased has left several children, the amounts are reduced proportionately and limited in total to half the pension to which the contracting party was entitled. The total maintenance payments to surviving dependants must not exceed the full amount of the pension of the contracting party. Current pensions are adjusted annually to take account of the change in the consumer price index for private households based on information provided by the German Statistical Office. If a member of the Executive Board has reached the age of 55 and completed ten years of service on the Executive Board, and his or her employment contract is terminated early by the Supervisory Board or his or her term of office is not extended for reasons beyond the control of the Executive Board member, he or she would immediately receive the pension earned, taking into account other income. If, however, an Executive Board member has not completed ten years of service or if the employment contract is terminated before he or she reaches the age of 55, he or she acquires entitlement by law to a pension as a supplement to the occupational pension in the amount specified by law, provided the Executive Board member was employed by the company for a minimum period of three consecutive years.

Emoluments of the Executive Board for 2015

With regard to the composition of the Executive Board, the following changes were made in the 2015 financial year: with effect from 1 January 2015, Dr Christian Bruch and Bernd Eulitz were appointed to the Executive Board of Linde AG. They replaced Professor Dr Aldo Belloni, who retired on 31 December 2014. The total cash remuneration for members of the Executive Board for performing their duties at Linde AG and its subsidiaries in and/or for the 2015 financial year was EUR 11,578,045 (2014: EUR 11,967,739). Of this amount, EUR 4,295,945 (2014: EUR 4,263,230) related to fixed remuneration components which are not performance-related and EUR 7,282,100 (2014: EUR 7,704,509) to variable short-term or long-term performance-related remuneration components. The measurement of benefits in kind and other benefits was based on their value for tax purposes. 60 percent of the variable cash emoluments, i. e. EUR 4,369,260 (2014: EUR 4,622,705) will be paid. 40 percent, i. e. EUR 2,912,840 (2014: EUR 3,081,804) is required to be invested (after the deduction of tax) in Linde shares which must be held for a qualifying period of four years. This therefore constitutes a long-term remuneration component. The total remuneration of the members of the Executive Board in 2015 was EUR 14,953,014 (2014: EUR 15,092,622). Included in the total remuneration are options and rights to matching shares which were granted to members of the Executive Board under the Long Term Incentive Plan. In each case, the options and matching shares are included at their value on allocation. In the 2015 financial year, members of the Executive Board were granted a total of 40,231 (2014: 38,450) options with a value on allocation of EUR 67.11 (2014: EUR 65.02) per option and 4,275 (2014: 4,463) rights to matching shares with a value on allocation of EUR 157.91 (2014: EUR 140.01) per right to a matching share.

Subject to the approval of the annual financial statements of Linde AG for the year ended 31 December 2015, the emoluments for the individual members of the Executive Board for 2015 (including variable emoluments calculated on the basis of Group ROCE after non-recurring items of 8.7 percent) are as follows:

Enlarge table (XLS:) Download

Total remuneration of members of the Executive Board

Executive Board members in office at 31.12.2015

 

 

 

 

Cash emoluments

 

Long Term Incentive Plan

 

Total

 

Pensions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

Matching shares

 

 

 

 

 

 

 

 

 

 

Fixed emoluments

 

Benefits in kind/ Other benefits

 

Variable cash emoluments

 

Total cash
emoluments2

 

Value on the grant date

 

Value on the grant date

 

Total emoluments

 

Service cost in financial year3 IFRS

 

Service cost in financial year3 HGB

in EUR

 

 

 

 

 

 

 

current1
(60%)

 

non-current2
(40%)

 

 

 

 

 

 

 

 

 

 

 

 

1

60 percent of the variable cash remuneration is paid directly in the year following the balance sheet date.

2

40 percent of the variable cash remuneration is paid out in the year following the balance sheet date with the obligation to purchase shares in Linde and hold these shares for at least four years.

3

No past service cost arose in the 2014 or 2015 financial years.

4

Sanjiv Lamba received an anniversary bonus of EUR 50k.

5

2014 including Professor Dr Aldo Belloni (Member of the Executive Board until 31.12.2014) and Professor Dr Wolfgang Reitzle (Chairman of the Executive Board until 20.05.2014).

Dr Wolfgang Büchele (from 01.05.2014) (Chairman from 20.05.2014)

 

2015

 

1,200,000

 

37,733

 

1,075,500

 

717,000

 

3,030,233

 

800,018

 

200,072

 

4,030,323

 

651,268

 

539,175

 

2014

 

800,000

 

101,671

 

701,800

 

467,867

 

2,071,338

 

800,006

 

199,934

 

3,071,278

 

453,316

 

375,989

Thomas Blades

 

2015

 

600,000

 

21,955

 

722,760

 

481,840

 

1,826,555

 

399,976

 

99,957

 

2,326,488

 

309,022

 

270,394

 

2014

 

600,000

 

28,481

 

697,080

 

464,720

 

1,790,281

 

400,003

 

99,967

 

2,290,251

 

298,789

 

277,381

Dr Christian Bruch
(from 01.01.2015)

 

2015

 

500,000

 

20,630

 

476,070

 

317,380

 

1,314,080

 

299,982

 

75,007

 

1,689,069

 

305,849

 

244,679

 

2014

 

 

 

 

 

 

 

 

 

 

Georg Denoke

 

2015

 

750,000

 

20,761

 

840,000

 

560,000

 

2,170,761

 

499,970

 

125,065

 

2,795,796

 

256,911

 

139,917

 

2014

 

722,500

 

23,296

 

786,555

 

524,370

 

2,056,721

 

500,004

 

125,029

 

2,681,754

 

163,924

 

120,127

Bernd Eulitz
(from 01.01.2015)

 

2015

 

500,000

 

28,157

 

522,090

 

348,060

 

1,398,307

 

299,982

 

75,007

 

1,773,296

 

308,020

 

246,416

 

2014

 

 

 

 

 

 

 

 

 

 

Sanjiv Lamba

 

2015

 

600,000

 

16,709

 

732,840

 

488,560

 

1,838,109

 

399,976

 

99,957

 

2,338,042

 

274,349

 

150,294

 

2014

 

581,250

 

69,0174

 

687,060

 

458,040

 

1,795,367

 

400,003

 

99,967

 

2,295,337

 

176,221

 

129,592

Total

 

2015

 

4,150,000

 

145,945

 

4,369,260

 

2,912,840

 

11,578,045

 

2,699,904

 

675,065

 

14,953,014

 

2,105,419

 

1,590,875

(in percent)

 

 

 

28

 

1

 

29

 

19

 

77

 

18

 

5

 

100

 

 

 

 

Total

 

20145

 

3,969,861

 

293,369

 

4,622,705

 

3,081,804

 

11,967,739

 

2,500,019

 

624,864

 

15,092,622

 

1,228,535

 

1,022,807

(in percent)

 

 

 

26

 

2

 

31

 

20

 

79

 

17

 

4

 

100

 

 

 

 

2014 includes Professor Dr Aldo Belloni (Member of the Executive Board until 31 December 2014) with total emoluments of EUR 2,966,933 and a service cost of EUR 136,285 (IFRS) and EUR 119,718 (HGB), as well as Professor Dr Wolfgang Reitzle (Chairman of the Executive Board until 20 May 2014) with total emoluments of EUR 1,787,069. The 2014 Financial Report shows the distribution among the various components.

In the 2015 financial year, the service cost for pension obligations in accordance with IFRS was EUR 2,105,419 (2014: EUR 1,228,535), while the figure in accordance with the German Commercial Code (HGB) was EUR 1,590,875 (2014: EUR 1,022,807). At the balance sheet date, the present value for accounting purposes of pension commitments accruing to the individual Board members was as follows: Dr Wolfgang Büchele EUR 1,111,884 (2014: EUR 453,316) (Group), EUR 1,006,674 (2014: EUR 375,989) (Linde AG); Thomas Blades EUR 1,262,717 (2014: EUR 985,861) (Group), EUR 1,181,352 (2014: EUR 869,377) (Linde AG); Dr Christian Bruch EUR 848,196 (Group), EUR 654,033 (Linde AG); Georg Denoke EUR 2,789,595 (2014: EUR 2,777,049) (Group), EUR 1,965,365 (2014: EUR 1,513,921) (Linde AG); Bernd Eulitz EUR 861,327 (Group), EUR 692,771 (Linde AG); Sanjiv Lamba EUR 1,158,813 (2014: EUR 983,190) (Group), EUR 819,326 (2014: EUR 539,886) (Linde AG). The change in the present value of the pension commitments is the result of the unwinding of interest of entitlements acquired in previous years, actuarial gains and changes in holdings. The present values of the pension commitments accruing to Dr Christian Bruch and Bernd Eulitz, who were appointed to the Executive Board on 1 January 2015, include their vested rights from their time spent as executives within The Linde Group.

Disclosures in accordance with the requirements of the German Corporate Governance Code

Disclosed in the table below, in accordance with the requirements set out in the German Corporate Governance Code, is the allocated remuneration of the Executive Board for the 2015 financial year including other benefits and including the maximum and minimum emoluments attainable in the case of variable remuneration components. In contrast to the Table entitled “Total remuneration of members of the Executive Board”, the one-year variable remuneration is disclosed in the table below at the target value, which is the value that would apply if all the targets were fully met. As in the Table entitled “Total remuneration of members of the Executive Board”, the options and rights to matching shares included in the share-based remuneration (Long Term Incentive Plan) are reported at fair value on the grant date. The option rights and rights to matching shares only become exercisable or are only transferred after a four-year qualifying period has elapsed. In each case, the number of option rights or rights to matching shares is determined by the actual targets met after the qualifying period has expired. Therefore, the value of the rights may be higher or lower than the figures disclosed in the table below, depending on the prevailing share price at the date of transfer. Moreover, in contrast to the Table entitled “Total remuneration of members of the Executive Board”, the total remuneration in the table below includes the pension expense.

Enlarge table (XLS:) Download

Remuneration allocated during the year

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Board members in office at 31.12.2015

 

 

Dr Wolfgang Büchele
Member of the Executive Board from 01.05.2014
Chairman of the Executive Board from 20.05.2014

 

Thomas Blades
Member of the Executive Board from 08.03.2012

Remuneration allocated during the year, in EUR

 

2014

 

2015

 

2015 (Min)

 

2015 (Max)

 

2014

 

2015

 

2015 (Min)

 

2015 (Max)

1

60 percent of the variable cash remuneration is paid in cash with no further obligation incumbent on the Executive Board member.

2

Capped at 250 percent of the fixed emoluments. The individual maximum values disclosed are the potential maximum values in terms of amount in accordance with the agreed upper limit: i. e. 250 percent of the fixed emoluments.

3

40 percent of the variable cash remuneration is paid out in cash with the obligation to purchase shares in Linde and hold these shares for at least four years.

4

Capped at 165 percent of the fixed emoluments. The individual maximum values disclosed are the potential maximum values in terms of amount in accordance with the agreed upper limit: i. e. 165 percent of the fixed emoluments.

5

The value of the options and rights to matching shares are not limited in terms of amount once the qualifying period has elapsed. The amounts disclosed are the individual maximum amounts if both the performance targets are met in full and are based on the closing price of Linde shares on 31 December 2015 (EUR 133.90).

Fixed emoluments

 

800,000

 

1,200,000

 

1,200,000

 

1,200,000

 

600,000

 

600,000

 

600,000

 

600,000

Other benefits

 

101,671

 

37,733

 

37,733

 

37,733

 

28,481

 

21,955

 

21,955

 

21,955

Total

 

901,671

 

1,237,733

 

1,237,733

 

1,237,733

 

628,481

 

621,955

 

621,955

 

621,955

One-year variable emoluments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term cash emoluments1,2

 

773,120

 

1,095,900

 

0

 

3,000,000

 

778,080

 

742,200

 

0

 

1,500,000

Multi-year variable emoluments

 

1,515,353

 

1,730,690

 

0

 

3,714,355

 

1,018,690

 

994,733

 

0

 

1,856,545

including long-term cash emoluments (deferral)3,4

 

515,413

 

730,600

 

0

 

1,980,000

 

518,720

 

494,800

 

0

 

990,000

including Long Term Incentive Plan 2014 (qualifying period: 4 years)5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

800,006

 

 

 

 

400,003

 

 

 

Matching shares

 

199,934

 

 

 

 

99,967

 

 

 

including Long Term Incentive Plan 2015 (qualifying period: 4 years)5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

 

800,018

 

0

 

1,564,704

 

 

399,976

 

0

 

781,786

Matching shares

 

 

200,072

 

0

 

169,651

 

 

99,957

 

0

 

84,759

Total

 

3,190,144

 

4,064,323

 

1,237,733

 

7,952,088

 

2,425,251

 

2,358,888

 

621,955

 

3,978,500

Service cost

 

453,316

 

651,268

 

651,268

 

651,268

 

298,789

 

309,022

 

309,022

 

309,022

Total emoluments

 

3,643,460

 

4,715,591

 

1,889,001

 

8,603,356

 

2,724,040

 

2,667,910

 

930,977

 

4,287,522

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Board members in office at 31.12.2015

 

 

Dr Christian Bruch
Member of the Executive Board from 01.01.2015

 

Georg Denoke
Member of the Executive Board from 12.09.2006

Remuneration allocated during the year, in EUR

 

2014

 

2015

 

2015 (Min)

 

2015 (Max)

 

2014

 

2015

 

2015 (Min)

 

2015 (Max)

Fixed emoluments

 

 

500,000

 

500,000

 

500,000

 

722,500

 

750,000

 

750,000

 

750,000

Other benefits

 

 

20,630

 

20,630

 

20,630

 

23,296

 

20,761

 

20,761

 

20,761

Total

 

 

520,630

 

520,630

 

520,630

 

745,796

 

770,761

 

770,761

 

770,761

One-year variable emoluments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term cash emoluments1,2

 

 

487,950

 

0

 

1,250,000

 

866,505

 

856,500

 

0

 

1,875,000

Multi-year variable emoluments

 

 

700,289

 

0

 

1,474,693

 

1,202,703

 

1,196,035

 

0

 

2,321,032

including long-term cash emoluments (deferral)3,4

 

 

325,300

 

0

 

825,000

 

577,670

 

571,000

 

0

 

1,237,500

including Long Term Incentive Plan 2014 (qualifying period: 4 years)5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

 

 

 

 

500,004

 

 

 

Matching shares

 

 

 

 

 

125,029

 

 

 

including Long Term Incentive Plan 2015 (qualifying period: 4 years)5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

 

299,982

 

0

 

586,090

 

 

499,970

 

0

 

977,483

Matching shares

 

 

75,007

 

0

 

63,603

 

 

125,065

 

0

 

106,049

Total

 

 

1,708,869

 

520,630

 

3,245,323

 

2,815,004

 

2,823,296

 

770,761

 

4,966,793

Service cost

 

 

305,849

 

305,849

 

305,849

 

163,924

 

256,911

 

256,911

 

256,911

Total emoluments

 

 

2,014,718

 

826,479

 

3,551,172

 

2,978,928

 

3,080,207

 

1,027,672

 

5,223,704

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Board members in office at 31.12.2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bernd Eulitz
Member of the Executive Board from 01.01.2015

 

Sanjiv Lamba
Member of the Executive Board from 09.03.2011

Remuneration allocated during the year, in EUR

 

2014

 

2015

 

2015 (Min)

 

2015 (Max)

 

2014

 

2015

 

2015 (Min)

 

2015 (Max)

Fixed emoluments

 

 

500,000

 

500,000

 

500,000

 

581,250

 

600,000

 

600,000

 

600,000

Other benefits

 

 

28,157

 

28,157

 

28,157

 

69,017

 

16,709

 

16,709

 

16,709

Total

 

 

528,157

 

528,157

 

528,157

 

650,267

 

616,709

 

616,709

 

616,709

One-year variable emoluments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term cash emoluments1,2

 

 

534,060

 

0

 

1,250,000

 

747,015

 

775,800

 

0

 

1,500,000

Multi-year variable emoluments

 

 

731,029

 

0

 

1,474,693

 

997,980

 

1,017,133

 

0

 

1,856,545

including long-term cash emoluments (deferral)3,4

 

 

356,040

 

0

 

825,000

 

498,010

 

517,200

 

0

 

990,000

including Long Term Incentive Plan 2014 (qualifying period: 4 years)5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

 

 

 

 

400,003

 

 

 

Matching shares

 

 

 

 

 

99,967

 

 

 

including Long Term Incentive Plan 2015 (qualifying period: 4 years)5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Options

 

 

299,982

 

0

 

586,090

 

 

399,976

 

0

 

781,786

Matching shares

 

 

75,007

 

0

 

63,603

 

 

99,957

 

0

 

84,759

Total

 

 

1,793,246

 

528,157

 

3,252,850

 

2,395,262

 

2,409,642

 

616,709

 

3,973,254

Service cost

 

 

308,020

 

308,020

 

308,020

 

176,221

 

274,349

 

274,349

 

274,349

Total emoluments

 

 

2,101,266

 

836,177

 

3,560,870

 

2,571,483

 

2,683,991

 

891,058

 

4,247,603

Disclosed in the table below, in accordance with the requirements set out in the German Corporate Governance Code, is remuneration received, comprising fixed emoluments, other benefits, one-year variable emoluments and multi-year variable emoluments, set out according to the relevant reference year, and the pension expense in and/or for the 2015 financial year. The remuneration received table does not include any remuneration for former members of the Executive Board. In contrast to the multi-year variable emoluments granted disclosed above, this table shows the actual value of multi-year emoluments granted in prior years and received in 2015. No tranche of the Long Term Incentive Plan was exercisable in the 2015 financial year. The qualifying period for the Long Term Incentive Plan 2012 ends in 2016.

  (XLS:) Download

Remuneration received during the year

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Board members in office at 31.12.2015

 

 

Dr Wolfgang Büchele
Member of the Executive Board from 01.05.2014
Chief Executive Officer from 20.05.2014

 

Thomas Blades
Member of the Executive Board from 08.03.2012

 

Dr Christian Bruch
Member of the Executive Board from 01.01.2015

Remuneration received during the year, in EUR

 

2014

 

2015

 

2014

 

2015

 

2014

 

2015

1

60 percent of the variable cash remuneration is paid in cash with no further obligation incumbent on the Executive Board member. 40 percent of the variable cash remuneration is paid out in cash with the obligation to purchase shares in Linde and hold these shares for at least four years.

Fixed emoluments

 

800,000

 

1,200,000

 

600,000

 

600,000

 

 

500,000

Other benefits

 

101,671

 

37,733

 

28,481

 

21,955

 

 

20,630

Total

 

901,671

 

1,237,733

 

628,481

 

621,955

 

 

520,630

One-year variable emoluments

 

 

 

 

 

 

 

 

 

 

 

 

Short-term cash emoluments1

 

701,800

 

1,075,500

 

697,080

 

722,760

 

 

476,070

Multi-year variable emoluments

 

467,867

 

717,000

 

464,720

 

481,840

 

 

317,380

including long-term cash emoluments (deferral)1

 

467,867

 

717,000

 

464,720

 

481,840

 

 

317,380

including Long Term Incentive Plan 2011 (qualifying period: 2011–2014)

 

 

 

 

 

 

Others

 

0

 

0

 

0

 

0

 

 

0

Total

 

2,071,338

 

3,030,233

 

1,790,281

 

1,826,555

 

 

1,314,080

Service cost

 

453,316

 

651,268

 

298,789

 

309,022

 

 

305,849

Total emoluments

 

2,524,654

 

3,681,501

 

2,089,070

 

2,135,577

 

 

1,619,929

 

 

 

 

 

 

 

 

 

 

 

 

 

Executive Board members in office at 31.12.2015

 

 

Georg Denoke
Member of the Executive Board from 12.09.2006

 

Bernd Eulitz
Member of the Executive Board from 01.01.2015

 

Sanjiv Lamba
Member of the Executive Board from 09.03.2011

Remuneration received during the year, in EUR

 

2014

 

2015

 

2014

 

2015

 

2014

 

2015

Fixed emoluments

 

722,500

 

750,000

 

 

500,000

 

581,250

 

600,000

Other benefits

 

23,296

 

20,761

 

 

28,157

 

69,017

 

16,709

Total

 

745,796

 

770,761

 

 

528,157

 

650,267

 

616,709

One-year variable emoluments

 

 

 

 

 

 

 

 

 

 

 

 

Short-term cash emoluments1

 

786,555

 

840,000

 

 

522,090

 

687,060

 

732,840

Multi-year variable emoluments

 

879,451

 

560,000

 

 

348,060

 

814,517

 

488,560

including long-term cash emoluments (deferral)1

 

524,370

 

560,000

 

 

348,060

 

458,040

 

488,560

including Long Term Incentive Plan 2011 (qualifying period: 2011–2014)

 

355,081

 

 

 

 

356,477

 

Others

 

0

 

0

 

 

0

 

0

 

0

Total

 

2,411,802

 

2,170,761

 

 

1,398,307

 

2,151,844

 

1,838,109

Service cost

 

163,924

 

256,911

 

 

308,020

 

176,221

 

274,349

Total emoluments

 

2,575,726

 

2,427,672

 

 

1,706,327

 

2,328,065

 

2,112,458

Other remuneration-related arrangements

The Supervisory Board has the right, at its own discretion, to award a special payment to an Executive Board member for exceptional performance. Again in the 2015 financial year, no such payment was granted. Any potential special payment is capped at an amount which, when taken together with the cash component and deferral component for that financial year, does not exceed the cap in terms of the amount for the one-year variable emoluments.

Benefits in the event of termination of a contract

In the event that they are not reappointed between the age of 55 and 63 for reasons beyond their control, Executive Board members Georg Denoke and Sanjiv Lamba will receive in accordance with their existing contracts a lump sum severance payment of 50 percent of their annual cash remuneration (fixed emoluments and that portion of the variable cash emoluments which is to be paid in cash with no obligation to invest in shares (60 percent)) for the last full financial year before the termination of their employment.

In compliance with the German Corporate Governance Code, all contracts with members of the Executive Board include the following provision. In the event of the early termination of the employment contract of a member of the Executive Board without due cause for that termination, his or her severance pay will be capped at twice the annual cash emoluments (fixed emoluments and that portion of the variable cash emoluments which is to be paid in cash with no obligation to invest in shares (60 percent)) (“severance cap”). The calculation is based on the annual cash emoluments for the last full financial year prior to the removal of the member from the Executive Board. If the annual cash emoluments of the member of the Executive Board for the financial year in which his or her employment is terminated are likely to be significantly higher or lower than the annual cash emoluments for the last full financial year, the Supervisory Board may at its discretion make an adjustment to the calculation of the annual cash emoluments. If the remaining term of the employment contract is less than two years, the severance pay is calculated pro rata. For the period on the basis of which the severance pay is determined, the Executive Board members receive no pension payments.

If Linde AG is acquired by another company and there is a change of control, and an employment contract is terminated within nine months of that date by mutual consent or as a result of a failure to renew the contract at the appropriate time or as a result of the resignation of the Executive Board member due to his or her position on the Board being unduly compromised by the takeover, members of the Executive Board have an entitlement to benefits based on their contractual cash emoluments but limited in extent. However, the burden of proof is on the member of the Executive Board to demonstrate the actual circumstances of his or her dismissal as a result of which his or her position has been unduly compromised. The recommendation of the German Corporate Governance Code relating to severance caps in the event of a change of control is also being followed. In accordance with the Code, all Executive Board contracts provide for severance pay in the event of a member retiring early from the Board due to a change of control equivalent to the amount payable in the event of early retirement from the Board without cause under any other circumstances. Moreover, the Executive Board member would receive additional compensation equivalent to his or her annual cash emoluments (fixed emoluments and that portion of the variable cash emoluments which is to be paid in cash with no obligation to invest in shares (60 percent)). The additional compensation would not be payable if the member of the Executive Board had served on the Board for less than three years or if he or she had not yet reached the age of 52 or had already reached the age of 63 when the employment contract ended. If the member of the Executive Board receives benefits on the occasion of or in connection with the acquisition by a majority shareholder, a controlling interest or another legal entity, these are taken into account when the compensation and severance pay benefits are calculated. The pension entitlement is determined in accordance with the rules for the early termination of an employment contract without cause.

If the employment contract of a member of the Executive Board is terminated with due cause, no payments are made to the Board member.

Executive Board members are bound by a restraint clause for a period of two years following the termination of their contracts. By way of compensation, the company undertakes to pay former Board members an amount equivalent to 50 percent of their fixed emoluments during the period of restraint. The compensation qualifies in full for pension benefits.

If the member of the Executive Board leaves the companys service as a result of death or incapacity for work, he or she or his or her heirs are entitled to the fixed monthly emoluments for the month in which the employment contract ended, and for the following six months. Moreover, he or she or his or her heirs are entitled to that proportion of the variable cash emoluments in respect of that part of the year in which the member of the Executive Board was active. In this case, 100 percent of the amount is paid in cash.

Loans and advances

During the financial year, no loans or advances were made to members of the Executive Board.

Total emoluments of former members of the Executive Board

Former members of the Executive Board and their surviving dependants received total emoluments of EUR 2,214,936 in the 2015 financial year (2014: EUR 3,290,586). The total emoluments also include changes in the value of annual tranches of share-based remuneration that have been recognised as an expense and previous claims under virtual shares for former Executive Board members.

A provision has been made in the Group financial statements for current pensions and future pension benefits in respect of former members of the Executive Board and their surviving dependants of EUR 58,771,380 (2014: EUR 58,273,773). In the annual financial statements of Linde AG, a provision of EUR 50,381,450 was made (2014: EUR 44,793,684). The differences in the amounts disclosed are attributable to different accounting parameters being used to calculate the figures included in the Group financial statements and the annual financial statements.