COMPENSATION STRATEGY OF SIEMENS

Presented ByDabloo kumar

Introduction  World recognized electronics and electricalbusiness  Siemens has been positioned among the top3 electronics and electrical organizations allover the world  Siemens is a very big company which isemploying around 450,000 people

BUSINESS GROUPS OF SIEMENS usiness Groups inSiemens

COMPENSATION PRACTICES AT SIEMENS

Compensation and Benefit Performance-Related Compensation Typical Pay Composition Fixed pay Benefits Risk protection Health and well-being Pensions Fringe benefits

Performance-related Compensation
Remuneration at Siemens is tailored to business strategy. Consistent remuneration of Siemens employees' performance ensures that their strategic targets are achieved.Siemens believes that monetary incentives are a strong motivating factor. Siemenstherefore works with fixed and variable elements of the pay package. The variablecomponents in salary increase in step with the importance of employess position in thecompany (Waddingham, 2009).

Typical Pay Composition

Fixed payFixed salary is based on the technical and personal demands placed on position and onindividual input. This part of salary does not vary (siemens industrial turbo machinery,2009).BenefitsIn addition to compensation at Siemens employees also receive other benefits in cash or in kind, for example, in the following areas:Risk protection Many Siemens companies offer additional, voluntary benefits in the area of accident, invalidity and life insurance (siemensindustrialturbomachinery, 2009)

Health and well-being

In many cases, Siemens companies offer a range of items in different areas of health and wellbeing that top up statutory programs and help employees to findan individual balance between work and private life(siemens industrial turbo machinery, 2009

Pension
Over 30 countries Siemens maintains supplementary company pension plans).Fringe benefits According to Siemens industrial turbo machinery(2009), Siemens offers additional fringe benefits and perks depending on regional conditions and usual local benefits, (e.g. company canteen, products and services at special prices).

1. Managing Board remuneration

In fiscal year 2009, the Managing Board remuneration had four components: (i) a fixed annual salary (base salary) (ii) a vari-able bonus whose amount depends on the achievement of predetermined targets (iii) a stock-based compensation (iv) a pension benefit contribution

The policies and levels of compensation paid to Supervisory Board members.

Salary Bonus Annual bonus Long-term bonus Other 1 Total

1. Managing Board remuneration

(Amounts in )
Cash compensation

2009

2008

2009

2008

2008

2009

2008

2009

2008

Managing Board members serving as of September 30, 2009 Peter Lscher Wolfgang Dehen 2 Dr. Heinrich Hiesinger Joe Kaeser Barbara Kux
3

1,980,000 780,000 780,000 780,000 680,333 780,000

2

1,980,000 585,000 780,000 780,000 780,000 585,000 780,000

2,552,512 1,972,530 1,268,717 795,549 985,624 862,421 953,646 985,624 985,624 761,670 571,253 761,670 581,357 675,521 761,670

2,085,473 460,442 676,699 854,995 862,325 583,630 761,670

9

86,470 49,904 35,750 66,455 206,569 60,331 43,981 74,942

1,300,774 47,903 43,823 67,267 62,045 30,956 1,711,970

4,618,982 2,098,621 1,611,299 1,832,079 1,749,323 1,793,977 1,840,566

7,338,777 1,674,702 2,176,043 2,463,932 2,466,040 4,015,310

Prof. Dr. Hermann Requardt Prof. Dr. Siegfried Russwurm Peter Y. Solmssen Former Managing Board members Rudi Lamprecht 4 Eduardo Montes 4, 5 Dr. Jrgen Radomski 4, 6 Jim Reid-Anderson 7 Prof. Dr. Erich R. Reinhardt 5, 8 Dr. Uriel J. Sharef 4 Prof. Dr. Klaus Wucherer Total
4

780,000 780,000

1,809,605 1,770,839 9

234,000 195,000 234,000 130,000 325,000 455,000 234,000 234,000 7,470,333 8,181,000 9,583,711 6,881,053 7,298,149 885,329 193,994 228,501 242,4929 324,389 9 266,683 242,4929 503,740 9 260,927

8,232 17,258 7,397 3,735 21,055 9,783 191,854 584,921

242,232 212,258 736,581 813,719 9 1,304,184 9 243,783 425,854

3,524,052 17,939,373 25,884,254

2. Supervisory Board remuneration

As a result, the remuneration of Supervisory Board members for fiscal year 2009 includes three components: a fixed compensation component, a short-term compensation component based on earnings per share, and a long-term compensation component based on earnings per share.

Under this concept, each Supervisory Board member receives fixed compensation of 50,000 annually as well as short-term variable compensation of 150 for each 0.01 by which earn-ings per share as disclosed in the Consolidated Financial State-ments exceeds a minimum amount of 1.00; this minimum amount is increased annually by 10 percent, beginning with the fiscal year starting on October 1, 2009. In addition, long-term compensation of 250 for each 0.01 by which the aver-age earnings per share over the last three completed fiscal years as disclosed in the Consolidated Financial Statements exceeds the amount of 2.00; this minimum amount is in-creased annually by 10 percent, beginning with the fiscal year starting on October 1, 2009. The determination of the Supervi-sory Board remuneration is based on basic earnings per share (basic EPS)