a) Annual management bonus
The management bonus is linked to target achievement and the individual performance of the Board member concerned. Since 1 October 2010, the performance target has been reported earnings before interest, tax and amortisation of goodwill (reported Group EBITA). If less than 50 % of the annual target is achieved, the management bonus for the year is not paid. If more than 50 % of the target is achieved, the target amount fixed in the service contract of the Executive Board member concerned is multiplied by the degree of target achievement; however a cap of 150 % applies.
The amount determined in this way is adjusted by the Supervisory Board by means of a factor ranging between 0.8 and 1.2 in order to take account of the Board member’s personal performance. The annual management bonus for Mr Joussen is paid out in full upon the adoption of the relevant annual financial statements of the Company. 50 % of the annual management bonus for Mr Baier is paid upon adoption of the relevant annual financial statements of the Company. The remaining 50 % of the management bonus is carried forward in equal tranches to the two subsequent years and adjusted in accordance with the degree of target achievement in those two years. The maximum amount payable for the annual performance bonus has been capped at € 1,400.0 thousand for Mr Joussen and € 1,147.5 thousand for Mr Baier.
b) Long-term incentive programme
The long-term incentive programme (LTIP) is based on phantom stocks and covers a period of four years. For Executive Board members, an individual target amount has been fixed in their service contracts. This amount is translated annually into a preliminary number of phantom stocks based on the average price of TUI AG shares over a period of twenty days prior to the beginning of any financial year. Entitlements for the beneficiary under the LTIP always arise upon completion of the four-year performance period (plan term in accordance with the model tables related to section 4.2.5 of the German Corporate Governance Code).
At the end of the four-year period, the degree of target achievement is determined by comparing the change in total shareholder return (TSR) at TUI AG with the change in the Dow Jones Stoxx 600 Travel & Leisure index. The degree of target achievement is determined as a function of the TSR rank at TUI AG compared with the TSR value of the companies in the Dow Jones STOXX 600 Travel & Leisure over the performance period. If the degree of target achievement is less than 25 % of the reference value, no remuneration is paid under the long-term incentive programme. If the degree of target achievement exceeds 25 % based on defined TSR ranks of TUI AG, the resulting degree of target achievement is multiplied by the preliminary number of phantom stocks determined for the first financial year of the four-year service period; however, a cap of 175 % applies.
At the end of the four-year performance period, the final number of phantom stocks determined in this way is multiplied by the average price of TUI AG shares (20 trading days prior to the end of the service period), and the resulting amount is paid out in cash. The maximum amount payable in cash under the long-term incentive programme has been capped at € 2,100.0 thousand for Mr Joussen and € 1,530.0 thousand for Mr Baier per performance period.
The table shows the fair value of the phantom stocks granted this year as per 30 September 2014 as benefits granted (in accordance with the model tables related to section 4.2.5 DCGK) for the completed financial year on the basis of an assumed target achievement of 100 %. An entitlement to a cash payment (“allocation” in accordance with model tables related to section 4.2.5 DCGK) generally only arises upon the termination of the four-year performance period from 1 October 2013 to 30 Septeber 2017 “LTIP 2013 / 14 – 2016 / 17” in the month following the adoption of the annual financial statements of TUI AG as per 30 September 2017 and depends solely on future target achievement for the period “LTIP 2013 / 14 – 2016 / 17”. The allocation for the completed financial year thus shows the cash payment for the performance period “LTIP 2013 / 14 – 2016 / 17” for Mr Baier. By way of derogation, a contractual advance payment of € 1,280.0 thousand has been agreed with Mr Joussen for the performance period “LTIP 2013 / 14 – 2016 / 17”, payable upon the adoption of the annual financial statements for financial year 2013 / 14. It is shown as an allocation and will be offset against the actual entitlement that will have arisen at the end of the performance period (LTIP 2013 / 14 – 2016 / 17”. Mr Joussen will receive additional advance payments of € 100.0 thousand each for the performance periods “LTIP 2012 / 13 – 2015 / 16” and “LTIP 2013 / 14 – 2016 / 17”, along with the advance payment for the performance period “LTIP 2014 / 15 – 2017 / 18”.
The long-term incentive programme for Mr Long entails the granting of shares in TUI Travel PLC (“TUI Travel”) based on personal assessment factors established by TUI Travel’s Remuneration Committee. On 1 October 2013, Mr Long held vesting rights to 7.54 million shares in TUI Travel. In financial year 2013 / 14, 2.37 million shares worth 378 pence / share were allocated to Mr Long on account of having achieved the performance targets defined by TUI Travel’s Remuneration Committee. New awards for 1.25 million shares were granted to Mr Long for financial year 2013 / 14. As per 30 September 2014, awards for shares in TUI Travel totalled 6.42 million.
As per 30 September 2014, Mr Long also held 3.02 million shares in TUI Travel awarded to him (previous year 3.02 million).
Provisions totalling € 2,660.8 thousand (previous year € 6,617.0 thousand) and liabilities worth € 1,839.2 thousand (previous year € 2,047.6 thousand) were formed to cover entitlements under TUI AG’s long-term incentive programme. The total expense for share-based payments and the amount attributable to each individual Executive Board member are shown in the table “Remuneration of individual Executive Board members“.