Total remuneration of the Board of Management

The basis for reporting the remuneration of Board members is German Accounting Standard No. 17 (DRS 17, revised 2010), according to which the amount shown as remuneration for annual performance is the provision established for that remuneration, since the performance on which the remuneration is based has been completed by the balance sheet date and the requisite Board resolution is already foreseeable. Under the above-mentioned standard, remuneration for multi-year performance is not recognised until the year of payment. The members of Munich Reinsurance Company’s Board of Management received remuneration totalling €11.7m (17.8m) for fulfilment of their duties in respect of the parent company and its subsidiaries in the financial year. Total remuneration thus shows a reduction of €6.1m compared with the previous year. The main reasons for this are that, firstly, no performance share units or stock appreciation rights were granted in 2010 and, secondly, provisions for multi-year performance 2010-2012 may not be recognised in remuneration in the year under review, since the underlying performance has not yet been completed.

¹At the time of preparation of this report, no Board resolution had yet been passed on the amounts to be paid for 2010. The amount shown for annual performance remuneration is based on estimates and the relevant provisions posted. For the 2009 annual bonus, a total of €271,830 more was paid out than had been reserved. The amounts for the 2010 annual performance have been increased accordingly.
² Performance share units were granted for the first and last time for the financial year under the Mid-Term Incentive Plan 2009–2011.
³ The total expenditure recognised in 2010 (expenses for reserves due to the development in value of the performance share units from the 2009–2011 plan) for the Mid-Term Incentive Plan 2009–2011 breaks down as follows: von Bomhard €116,266, Arnoldussen €130,399, Blunck €140,856, Daschner €154,685, Jeworrek €195,400, Röder €114,001, Schneider €83,182, Strassl –€8,495, Wenning €97,589.
⁴ The total expenditure recognised in 2010 (expenses for/release of reserves due to the development in value of the stock appreciation rights from the 2003–2009 plans) for the long-term incentive plans breaks down as follows: von Bomhard €133,025.60, Arnoldussen €15,205.80, Blunck –€10,595.78, Daschner €48,892.63, Jeworrek €86,380.56, Röder €19,092.36, Schneider €77,035.80, Strassl –€37,320.55, Wenning –€3,799.37.
⁵ Remuneration in kind/fringe benefits including anniversary payment.

The Mid-Term Incentive Plan 2009–2011 and the Long-Term Incentive Plan 2009 are accounted for at fair value at the granting date. Details of the fair value are provided in the notes to the financial statements under (45) Mid-Term Incentive Plan and (44) Long-Term Incentive Plan. Whether these variable component amounts will actually be paid out to the Board members and, if so, how high the sums will be, is not yet certain and will depend on the degree to which individual objectives are achieved, on share-price development and on the fulfilment of the exercise conditions of the longterm incentive plans. Future obligations arising from the long-term incentive plans are safeguarded in such a way that the expenses resulting from a growth in value of the stock appreciation rights are neutralised as far as possible by an increase in the value of the share portfolio.

The following table shows the amounts payable for the variable remuneration under the newly structured remuneration system as at 1 January 2010.

¹ At the time of preparation of this report, no Board resolution had yet been passed on the amounts to be paid for 2010. The amount shown for annual performance remuneration is based on estimates and the relevant provisions posted in the table on page 37.
² The remuneration set for multi-year performance for 2010 is payable in 2013, that for 2011 in 2014.
³ The information on the calculation bases and parameters on page 30 for the amounts set for 2010 also apply to the amounts set for 2011.

Pension entitlements

Personnel expenses of €4.1m (4.0m) were incurred in the financial year 2010 to finance the pension entitlements for active members of the Board of Management. Of these, €1.0m was apportionable to defined benefit plans and €3.1m to defined contribution plans. As a consequence of the risk transfer to an external insurer under the defined contribution system, the visible pension costs since 2009 are noticeably higher. The Company accepts this increase in order to avoid higher costs in future and to eliminate long-term pension-specific risks. The following defined benefits, present values, contribution rates and personnel expenses result for the individual members of the Board of Management:

¹ In the case of Board members transferred from the old system to the new, the amount corresponds to the value of the vested pension at 31 December 2008; in the case of Mr. Daschner, it corresponds to the defined benefit at 31 December.
² Expenses for defined benefit plan, including provision for continued payment of salary for surviving dependants.
³ Entitled to a reduced occupational pension on early retirement in the event of premature or regular termination of employment.
⁴ Entitled to vested benefits under the German Company Pensions Act in the event of premature or regular termination of employment.
⁵ Entitled to vested benefits under the German Company Pensions Act in the event of premature termination of employment, and to improved vested benefits in the event of regular termination of employment.
⁶ No transfer to defined contribution system, as Board member had already reached 55 at the conversion date. Entitled to an occupational pension in the event of premature or regular termination of employment.
⁷ Entitled to vested benefits under the German Company Pensions Act in the event of premature termination of employment, and to a reduced occupational pension on early retirement in the event of regular termination of employment.
⁸ Entitled to occupational pension in the event of termination of employment owing to incapacity to work.
⁹ Defined contribution plan with the meaning of IAS 19, Employee Benefits, so no present value shown.