Remuneration report

Executive Board remuneration

The remuneration system used for HHLA’s Executive Board is designed to foster successful and sustainable corporate development. The Supervisory Board is responsible for defining the Executive Board’s remuneration system, regularly reviewing and adjusting the remuneration system if necessary, and setting the individual remuneration of executives following preparatory work by the Personnel Committee. When making such decisions, the Personnel Committee and the Supervisory Board take into account the recommendations of the German Corporate Governance Code, the responsibilities and performance of each member of the Executive Board, and in particular HHLA’s size and activities, its financial and economic position, the amount and structure of executive board remuneration at comparable companies, and the relationship between the remuneration of the Executive Board and the remuneration of the upper levels of management and the work force.

In accordance with the current remuneration system for the members of the Executive Board, which was last modified slightly in the 2015 financial year and has applied in this version for all members of the Executive Board since 1 January 2017, remuneration for the members of the Executive Board comprises a non-performance-related fixed salary, a performance-related bonus, pension entitlements and fringe benefits.

Level of remuneration for Executive Board members according to different scenarios

As of: 31 December 2018

Level of remuneration for Executive Board members according to different scenarios (diagram)

1 Per container handled and transported

Fixed remuneration amounts to € 350,000 p.a. for ordinary members of the Executive Board. This is paid in twelve monthly instalments. The chairperson of the Executive Board receives a higher basic salary. In addition, there are fringe benefits (non-monetary compensation) in the form of a right to use an appropriate company car (including for private purposes) and the payment of insurance premiums by the company. The members of the Executive Board pay tax on these benefits as components of their remuneration.

The performance-related bonus is set on the basis of a three-year assessment period and paid out once the annual financial statements have been approved. The calculation is based on the average earnings before interest and taxes () for the past three years (before additions to pension provisions and reduced by any extraordinary income from the disposal of real estate and companies), the average return on capital employed () and the achievement of targets relating to environmental issues (reduction of the carbon footprint of each container handled and transported) and social issues (broken down into training and continuing professional development, health and employment) in the same period. Target ranges were set for each of the sustainability components. Achieving these targets triggers the payment of the relevant bonus. When making these calculations, roughly equal weight is given to EBIT on the one hand and the above-mentioned sustainability components on the other. The total variable remuneration is capped at 100 % of the fixed salary.

Pension entitlements exist for Executive Board members who have served on the Executive Board for more than three years. These entitlements grant Executive Board members a pension if they leave the Executive Board after a minimum of five or eight years’ service for reasons unrelated to their person or for which they are not responsible, or as a result of incapacity or reaching retirement age. Pensions consist of a percentage of the entitlement salary, which in turn is based on the annual basic salary. Depending on the Executive Board member’s length of service, this percentage is between 35 and 50 %, whereby adjustments are made not on a linear basis over the contract term, but rather in the course of contract extensions. Several different forms of income are taken into account on an individual basis, such as earnings from self-employment or employment and, in some cases, income from statutory pensions and related benefits from public funds. Surviving spouses of Executive Board members receive a widow(er)’s pension of 55 to 60 % of the pension entitlement and children receive an orphan’s allowance of 12 to 20 % of the pension. Should the pension entitlement have been suspended or no longer apply, transitional or interim pay applies for a limited period on the basis of the fixed remuneration. During their first term (usually three years), Executive Board members do not generally accrue pension entitlements. Instead, individual arrangements are made, such as the payment of premiums for a direct insurance policy or the payment of a certain amount which is earmarked for a private pension.

The service contracts of the members of the Executive Board contain a clause that provides for the payment of compensation to the respective Executive Board member in the event of them losing their Executive Board seat without good cause (including termination due to a change of control). In line with the recommendations of the German Corporate Governance Code, the compensation is limited to a maximum of two annual salaries (including other benefits) and not more than the total remuneration for the remaining term of the service contract.

The members of the Executive Board were not granted any loans or similar payments. Total remuneration disbursed to the members of the Executive Board for their services in the 2018 financial year amounted to approximately € 3.0 million (previous year: € 2.93 million). Former members of the Executive Board and their surviving dependants received benefits totalling € 1,008,923 (previous year: € 931,633). Total provisions of € 23,239,497 were recognised for pension obligations to former members of the Executive Board and their surviving dependants (previous year: € 24,241,804).

Individual remuneration of the Executive Board

The following figures comply with the recommendations in Section 4.2.5 of the German Corporate Governance Code (GCGC).

Individual remuneration of the Executive Board

 

 

Angela Titzrath, Chairwoman of the Executive Board

 

 

Benefits granted (target)

 

Allocation (amount disbursed)

in €

 

2018

 

2018 Minimum

 

2018 Maximum

 

2017

 

2018

 

2017

Fixed remuneration

 

450,000

 

450,000

 

450,000

 

450,000

 

450,000

 

450,000

Other benefits

 

13,859

 

13,859

 

13,859

 

12,248

 

13,859

 

12,248

Total

 

463,859

 

463,859

 

463,859

 

462,248

 

463,859

 

462,248

One-year variable remuneration1, 2

 

406,450

 

0

 

450,000

 

350,940

 

400,391

 

392,230

Other

 

0

 

0

 

0

 

0

 

0

 

0

Total remuneration

 

870,309

 

463,859

 

913,859

 

813,188

 

864,250

 

854,478

Service cost3

 

355,898

 

355,898

 

355,898

 

354,032

 

355,898

 

354,032

Total expenses

 

1,226,207

 

819,757

 

1,269,757

 

1,167,220

 

1,220,148

 

1,208,510

 

 

Heinz Brandt, Executive Board member

 

 

Benefits granted (target)

 

Allocation (amount disbursed)

in €

 

2018

 

2018 Minimum

 

2018 Maximum

 

2017

 

2018

 

2017

Fixed remuneration

 

350,000

 

350,000

 

350,000

 

350,000

 

350,000

 

350,000

Other benefits

 

13,359

 

13,359

 

13,359

 

13,215

 

13,359

 

13,215

Total

 

363,359

 

363,359

 

363,359

 

363,215

 

363,359

 

363,215

One-year variable remuneration1, 2

 

326,450

 

0

 

350,000

 

282,815

 

323,974

 

324,813

Other

 

0

 

0

 

0

 

0

 

0

 

0

Total remuneration

 

689,809

 

363,359

 

713,359

 

646,030

 

687,333

 

688,028

Service cost3, 4

 

269,655

 

269,655

 

269,655

 

265,932

 

269,655

 

265,932

Total expenses

 

959,464

 

633,014

 

983,014

 

911,961

 

956,988

 

953,960

 

 

Jens Hansen, Executive Board member (since 1 April 2017)

 

 

Benefits granted (target)

 

Allocation (amount disbursed)

in €

 

2018

 

2018 Minimum

 

2018 Maximum

 

2017

 

2018

 

2017

Fixed remuneration

 

350,000

 

350,000

 

350,000

 

262,500

 

350,000

 

262,500

Other benefits

 

18,624

 

18,624

 

18,624

 

10,081

 

18,624

 

10,081

Total

 

368,624

 

368,624

 

368,624

 

272,581

 

368,624

 

272,581

One-year variable remuneration1, 2

 

350,000

 

0

 

350,000

 

230,393

 

350,000

 

257,048

Other

 

0

 

0

 

0

 

0

 

0

 

0

Total remuneration

 

718,624

 

368,624

 

718,624

 

502,974

 

718,624

 

529,629

Service cost3

 

35,000

 

35,000

 

35,000

 

26,250

 

35,000

 

26,250

Total expenses

 

753,624

 

403,624

 

753,624

 

529,224

 

753,624

 

555,879

 

 

Dr. Roland Lappin, Executive Board member

 

 

Benefits granted (target)

 

Allocation (amount disbursed)

in €

 

2018

 

2018 Minimum

 

2018 Maximum

 

2017

 

2018

 

2017

1

Elements of the performance-related bonus (EBIT and sustainability components), calculated on the basis of a three-year assessment period.

2

A level of goal achievement of 100 % was assumed for each sustainability component and an average probability scenario was used for the EBIT figure (based on the forecasts announced on the capital market at the start of each year).

3

Service costs in accordance with IAS 19 “Service Cost Components for Entitlements, Payments for Direct Insurance Policies or Earmarked Contributions for Pensions” (according to the comments on model table 1 in the appendix to the GCGC)

4

As a result of Mr. Brandt's decision to leave the Executive Board at the end of March 31, 2019, additional actuarial losses of € 1,020,105 were incurred in the 2018 financial year.

Fixed remuneration

 

350,000

 

350,000

 

350,000

 

350,000

 

350,000

 

350,000

Other benefits

 

10,782

 

10,782

 

10,782

 

9,593

 

10,782

 

9,593

Total

 

360,782

 

360,782

 

360,782

 

359,593

 

360,782

 

359,593

One-year variable remuneration1, 2

 

326,450

 

0

 

350,000

 

282,815

 

323,974

 

324,813

Other

 

0

 

0

 

0

 

0

 

0

 

0

Total remuneration

 

687,232

 

360,782

 

710,782

 

642,408

 

684,756

 

684,406

Service cost3

 

207,878

 

207,878

 

207,878

 

205,008

 

207,878

 

205,008

Total expenses

 

895,110

 

568,660

 

918,660

 

847,415

 

892,634

 

889,414

Supervisory Board remuneration

In accordance with Article 16 of HHLA’s articles of association, Supervisory Board members are remunerated as resolved by the Annual General Meeting. This remuneration is based on the scope of the Supervisory Board members’ activities as well as on the company’s financial position and results. The current remuneration clause was adopted at the Annual General Meeting held on 13 June 2013. The members of the Supervisory Board receive fixed remuneration of € 13,500 per financial year. The chairman receives three times this amount and the vice chairman is paid one-and-a-half times the basic figure. Supervisory Board members who belong to a committee receive an additional € 2,500 per committee per financial year, while the chairman of the respective committee receives € 5,000, but altogether no more than € 10,000. Supervisory Board members who have belonged to the Supervisory Board or a committee for less than one full financial year receive a corresponding pro rata payment. Furthermore, Supervisory Board members receive a meeting attendance fee of € 250 for each meeting of the Supervisory Board or one of its committees. There are no plans for a variable remuneration component.

No loans or similar payments were granted to members of the Supervisory Board. Other than the customary remuneration payable to the employee representatives under their contracts of employment, Supervisory Board members did not receive any other payment for services rendered. The total remuneration paid to members of the Supervisory Board during the reporting period amounted to € 309,292 (previous year: € 303,938).

Individual remuneration of Supervisory Board members

 

 

Fixed
remuneration

 

Remuneration for
committee work

 

Meeting fee

 

Total

in €1

 

2018

 

2017

 

2018

 

2017

 

2018

 

2017

 

2018

 

2017

1

All figures exclude VAT

2

Since 21 June 2017 (Annual General Meeting 2017)

3

Until 21 June 2017 (Annual General Meeting 2017)

4

Until 12 June 2018 (Annual General Meeting 2018)

5

Until 20 April 2018

6

21 April 2018 until 12 June 2018 (Annual General Meeting 2018)

7

Since 12 June 2018 (Annual General Meeting 2018)

Prof. Dr. Rüdiger Grube2

 

40,500

 

23,625

 

5,000

 

0

 

3,500

 

750

 

49,000

 

24,375

Prof. Dr. Peer Witten3

 

0

 

20,250

 

0

 

5,000

 

0

 

3,000

 

0

 

28,250

Berthold Bose2

 

20,250

 

11,813

 

2,500

 

0

 

3,500

 

750

 

26,250

 

12,563

Wolfgang Abel3

 

0

 

10,125

 

0

 

1,250

 

0

 

2,500

 

0

 

13,875

Torsten Ballhause3

 

0

 

6,750

 

0

 

3,750

 

0

 

3,000

 

0

 

13,500

Petra Bödeker-Schoemann4

 

6,750

 

13,500

 

3,750

 

6,250

 

1,000

 

2,750

 

11,500

 

22,500

Dr. Rolf Bösinger5

 

4,500

 

13,500

 

833

 

2,500

 

0

 

3,500

 

5,333

 

19,500

Dr. Bernd Egert3

 

0

 

6,750

 

0

 

3,750

 

0

 

1,500

 

0

 

12,000

Holger Heinzel3

 

0

 

6,750

 

0

 

1,250

 

0

 

1,000

 

0

 

9,000

Dr. Norbert Kloppenburg

 

13,500

 

13,500

 

7,500

 

6,250

 

3,750

 

3,250

 

24,750

 

23,000

Andreas Kummer3

 

0

 

6,750

 

0

 

3,750

 

0

 

3,250

 

0

 

13,750

Thomas Lütje2

 

13,500

 

7,875

 

2,500

 

833

 

2,000

 

1,000

 

18,000

 

9,708

Dr. Wibke Mellwig6

 

3,375

 

0

 

0

 

0

 

250

 

0

 

3,625

 

0

Thomas Mendrzik2

 

13,500

 

7,875

 

10,000

 

2,500

 

4,750

 

1,750

 

28,250

 

12,125

Thomas Nahr3

 

0

 

6,750

 

0

 

2,500

 

0

 

1,500

 

0

 

10,750

Dr. Isabella Niklas7

 

7,875

 

0

 

3,125

 

0

 

1,750

 

0

 

12,750

 

0

Norbert Paulsen

 

13,500

 

13,500

 

10,000

 

5,000

 

5,250

 

3,500

 

28,750

 

22,000

Sonja Petersen2

 

13,500

 

7,875

 

5,000

 

1,667

 

3,000

 

250

 

21,500

 

9,792

Dr. Sibylle Roggencamp

 

13,500

 

13,500

 

10,000

 

8,750

 

5,000

 

4,500

 

28,500

 

26,750

Maya Schwiegershausen-Güth2

 

13,500

 

7,875

 

0

 

0

 

1,750

 

250

 

15,250

 

8,125

Dr. Torsten Sevecke7

 

7,875

 

0

 

1,458

 

0

 

2,250

 

0

 

11,583

 

0

Michael Westhagemann2

 

13,500

 

7,875

 

7,500

 

2,500

 

3,250

 

2,000

 

24,250

 

12,375

Total

 

199,125

 

206,438

 

69,166

 

57,500

 

41,000

 

40,000

 

309,292

 

303,938

EBIT

Earnings before interest and taxes.

ROCE (Return on Capital Employed before Taxes)

EBIT / Average Operating Assets.