Remuneration system

The compensation report of CompuGroup Medical presents the principles for establishing Management and Supervisory Board compensation as well as the amounts and structure involved.

Compensation of the Management Board

Total compensation of members of the Management Board comprises results-independent and results-dependent components. The level of compensation is mainly dependent on the responsibilities of the particular Management Board member, his or her personal performance, and the economic situation of the Company. In addition, the success and future prospects of the Company in the appropriate field of comparison are important criteria in determining the compensation. The components of the results-independent compensation are a fixed salary and fringe benefits, while the results-dependent compensation components consist of management bonus payments.

The fixed salary, a base compensation independent of performance, is paid out monthly as salary. In addition, the members of the Management Board receive fringe benefits in the form of in-kind compensations, which consist essentially of the use of a Company car. The use of a Company car is taxable due to its attribution as a component of compensation for each member of the Management Board.

The results-dependent compensation depends on goals agreed individually with each Management Board member, including goals measured over a multi-year period (long-term incentive). For all Management Board members, the long-term incentive is based on goals related to organic growth and consolidated EBITA. The (quantitative and qualitative) targets on which the calculation of bonus payments is based and their weighting are focused on sustainable Company management in accordance with Section 87 AktG.

Loans were not made to members of the Management Board during the reporting year. No member of the Management Board received benefits or corresponding commitments from a third party in the past financial year in consideration of his or her activity as a member of the Management Board. There are no pension commitments to any of the members of the Management Board.

On 14 December 2011, the Supervisory Board of CompuGroup Medical AG appointed Christian B. Teig for a second four year term as CFO, starting 1 October 2012 and ending 30 September 2016. In addition to an annual fixed salary of EUR 300,000, Christian B. Teig has been granted a results-dependent compensation of up to EUR 300,000 per year, composed of two equal components each with a maximum of EUR 150,000 per year. The first performance-based remuneration component depends on the achievement of individually defined goals for each annual fiscal year. The second performance-based compensation component is measured by the average EBITA and average organic growth in the financial year and the previous period. As fringe benefit, Christian B. Teig is also entitled to a company car with a net purchase price up to EUR 120,000. At the same Supervisory Board meeting, the validity period for the 375,000 share options with strike price of EUR 5.50 per share held by Christian B. Teig was extended until 31 December 2016. Mr. Teig can execute the share options at any time before this date (American Options) without further conditions. Should Christian B. Teig during the contract period become permanently disabled, the service contract is terminated six months after determination of incapacity. In the event of termination by the Company, Mr. Christian B. Teig receives a severance payment in the amount of up to EUR 1,200,000 or the amount of the total compensation that would be payable for the remaining term of the employment contract after the early termination. The service contract also includes a change of control clause (section " Information required by § 315 Section 4 of the German Commercial Code"). In the event of a change of control, Christian B. Teig has the right to cancel his contract within one month to the end of the month and the aforementioned severance payment shall be paid in full.

On 7 March 2012, the Supervisory Board of CompuGroup Medical AG appointed Uwe Eibich for a second four year term as Executive Vice President Central Europe, starting 1 January 2013 and ending 31 December 2016. In addition to an annual fixed salary of EUR 300,000, Uwe Eibich has been granted a results-dependent compensation of up to EUR 200,000 per year. The performance-related remuneration depends on the achievement of individually defined goals for each annual fiscal year. Furthermore, Mr. Uwe Eibich is entitled to an additional performance-based compensation over the contract term of up to EUR 400,000. The second performance-based compensation component is measured by the average organic growth in the region “Central Europe" over the period of appointment, which must amount to at least 4% per annum. With an average organic growth of 12% per annum, a target achievement of 100% applies. Uwe Eibich is also entitled to a company car with a net purchase price up to EUR 120,000. Should Mr. Uwe Eibich during the contract period die or become permanently incapacitated, the fixed annual salary and the variable portion of compensation for a period of three months will be paid (death benefits to beneficiaries). In the event of termination by the Company, Mr. Uwe Eibich receives a severance payment equal to the pro rata compensation due until the end of his term. The severance payment is limited to a maximum amount of EUR 600,000.

On 30 January 2013, the Supervisory Board of CompuGroup Medical AG appointed Frank Gotthardt for a new four and a half year term as CEO, starting 1 July 2013 and ending 31 December 2017. In addition to an annual fixed salary of EUR 660,00, Mr Frank Gotthardt is entitled to a performance-related remuneration depending on the average EBITA and average organic growth rate in the fiscal year and the following two years. Because the contract term is limited to the end of 2017, the period of averaging is reduced from fiscal year 2016. In the last year of his term (fiscal year 2017), the amount of the bonus depends also on the level of recurring revenues, which must be higher in fiscal year 2018 than in fiscal 2017. Otherwise, the bonus for the fiscal year 2017 is educed proportionally. Should Mr Frank Gotthardt during the contract period die or become permanently incapacitated, the fixed annual salary and the variable portion of compensation for a period of three months will be paid (death benefits to beneficiaries).

Management Board compensation 2013

Name Fixed compensation Performance-related compensation Fringe benefits Total compensation
  EUR EUR EUR EUR
Gotthardt, Frank 630,000 644,000 0 1,274,000
Eibich, Uwe 300,000 91,771 34,991 426,762
Teig, Christian B. 300,000 174,829 38,415 513,244
Total 1,230,000 910,600 73,406 2,214,006

The declaration of performance-related compensation for Christian B. Teig contains a correction of EUR -107,921 between the previous year's figure (EUR 225,000) and the amount actually paid during 2013.

Comparison: Management Board compensation 2012

Name Fixed compensation Performance-related compensation Fringe benefits Total compensation
  EUR EUR EUR EUR
Gotthardt, Frank 600,000 1,595,000 0 2,195,000
Eibich, Uwe 200,000 200,333 27,783 428,116
Teig, Christian B. 225,000 225,000 5,873 455,873
Total 1,025,000 2,020,333 33,656 3,078,989

Compensation of the Supervisory Board

There was no change in the composition and functions of the Supervisory Board in the 2013 financial year.

The compensation of the Supervisory Board was established by the Annual General Meeting and is regulated by Section 16 of the Company’s articles of association. The compensation is geared to the functions and the responsibilities of the members of the Supervisory Board as well as to the Group’s economic success.

The compensation of the Supervisory Board is based on an annual fixed amount. In the past financial year, there was no change in the amount of compensation of the individual members of the Supervisory Board compared to the previous year.

The chairman of the Supervisory Board receives one and a half times the compensation granted to the other members of the Supervisory Board. Accordingly, the Chairman of the Supervisory Board receives a fixed amount of EUR 60 thousand while all other members receive EUR 40 thousand each. All other expenses arising from the members’ activities on the Supervisory Board are also recompensed (notably travel expenses). This results in the following allocation for the reporting year:

Supervisory Board compensation 2013

Name Supervisory Board compensation EUR
Prof. Dr. Steffens, Klaus 60,000
Dr. Esser, Klaus 40,000
Dr. Gotthardt, Daniel 40,000
Prof. Dr. Hinz, Rolf 40,000
Lange, Mathias 40,000
Glass, Ralf 40,000

Supervisory Board compensation 2012

Name Supervisory Board compensation EUR
Prof. Dr. Steffens, Klaus 60,000
Dr. Esser, Klaus 40,000
Dr. Gotthardt, Daniel 40,000
Prof. Dr. Hinz, Rolf 40,000
Lange, Mathias 40,000
Glass, Ralf 40,000

Additional compensation is paid to employee representatives on the Supervisory Board for activities outside the Supervisory Board at arm’s length terms and conditions. No individual disclosures are made in this respect as these payments are deemed as not being of a material nature.

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