| The following remuneration report is a component of the Group management report. The report reflects the requirements of the German Corporate Governance Code and German Accounting Standard (GAS) 17 “Reporting on the Remuneration of Members of Governing Bodies”. This report also includes the information required by the Handelsgesetzbuch (HGB, the German Commercial Code) and the International Financial Reporting Standards (IFRSs). 
Review and adjustment of the Executive Board remuneration system The structure and amount of the Executive Board remuneration is determined by the Supervisory Board on the basis of recommendations made by the Personnel Committee. The structure of and system governing the Executive Board remuneration was comprehensively reviewed last year by the Supervisory Board together with an independent external advisor. The structure and amount of the Executive Board remuneration were assessed on the basis of vertical and horizontal comparisons, i. e. within Deutsche Börse AG and in relation to comparable undertakings, and are adjusted where necessary. Following intensive Personnel Committee consultations and detailed talks with the Executive Board, the Supervisory Board agreed on a new remuneration system that complies with the new requirements of the Gesetz zur Angemessenheit der Vorstandsvergütung (VorstAG, Act on the Appropriateness of Management Board Remuneration) and the German Corporate Governance Code. The contracts of all Executive Board members, irrespective of their duration, were amended by mutual agreement to reflect the new remuneration system with effect from 1 January 2010. Based on the comparisons mentioned above, the remuneration can be considered appropriate.
Structure of the Executive Board remuneration system The remuneration system applicable to members of Deutsche Börse AG’s Executive Board since 1 January 2010 is described below. The aim of this system is to remunerate the Executive Board members appropriately for their tasks and responsibilities, as well as in accordance with legal requirements, and to provide incentives based on assessment periods over several years without incurring unjustifiable risks. The remuneration consists of non-performancerelated and performance-related components. Significant structural changes in the remuneration system are the redistribution to the various remuneration components as well as the restructuring of assessment periods and incentives for variable cash and share components. The total target remuneration in the new remuneration system remains essentially unchanged from the old system. Non-performance-related remuneration components Non-performance-related remuneration comprises the monthly basic remuneration and ancillary contractual benefits granted. Basic remuneration
The members of the Executive Board receive a fixed basic salary in twelve equal monthly instalments. The basic salary represents approximately 30 percent of the total target remuneration for one year. It is reviewed by the Supervisory Board on a regular basis, at least every two years. Ancillary contractual benefits
In addition to the basic remuneration, the members of the Executive Board receive certain ancillary contractual benefits. The most significant benefit is an occupational pension commitment in the form of a defined contribution plan for members of the Executive Board employed since January 2009 and a defined benefit plan for those who joined earlier (see the “Retirement benefits” section for details of the terms and conditions). A further benefit is the provision of an appropriate company car for business and personal use. Tax is payable by the Executive Board members for the pecuniary benefit arising from private use.
 In addition, members of the Executive Board receive taxable contributions towards private pensions. The Company also takes out accident insurance and directors’ and officers’ liability insurance (D&O insurance) for them. This policy includes a deductible of 10 percent of the damages arising from the insured event, with the maximum deductible per year set by the Supervisory Board at 1.5 times the fixed annual remuneration of the relevant Executive Board member. Performance-related remuneration components The performance-related remuneration consists of cash and share components. The cash component represents around 45 percent and the share component about 25 percent of the total annual target remuneration. Under the new remuneration system effective since 2010, the reference periods for performance measurement are 2008 to 2010 for the variable cash component and 2010 to 2012 for the variable share component. The old system only had a one-year reference period for performance measurement with partial deferral. Variable cash component
The Supervisory Board establishes the 100 percent target value of the variable cash component in euros for every Executive Board member. At the end of the financial year, the Supervisory Board determines the actual degree to which the targets have been met and decides on the amount of the variable cash component. Two parameters are used to measure target achievement: Achievement of the Group’s net income target:
Two-thirds of the variable cash component are based on the achievement of a specified net income target for the Group and a corresponding return on equity, taking into account not only the net income for the current financial year, but also for the two preceding years. The degree to which the targets have been achieved is determined for each of the three financial years, achievement of 0 percent to a maximum of 200 percent is possible. The average level of target achievement is then used to calculate two-thirds of the variable cash component for the current financial year. Based on the Executive Board’s performance, the Supervisory Board calculated a target achievement for 2008 and 2009 respectively, for those members of the Executive Board who were in office throughout the two financial years. For new Executive Board members, 100 percent target achievement was assumed for past years in which they were not yet in office. When determining the target achievement level for the relevant subscription years, the Supervisory Board checks whether and to what extent exceptional, one-off effects influenced the Group’s net income. If these one-off effects were caused by developments or factors not attributable to the Executive Board, the Supervisory Board takes this into account when determining the level of target achievement. Achievement of individual targets:
One-third of the variable cash component is determined based on the degree to which each member of the Executive Board has achieved individual targets in the financial year for which the cash bonus is awarded. Individual targets are agreed with each Executive Board member at the beginning of the year. Target achievement is assessed after the end of the year; once again, achievement of 0 percent to a maximum of 200 percent is possible. Variable share component
The Supervisory Board also establishes the 100 percent target value for the variable share component for each Executive Board member in euros. The number of phantom Deutsche Börse shares for each member of the Executive Board is calculated based on this target value. To do this, the euro amount is divided by the average share price (Xetra ® closing price) in the two calendar months preceding the determination of the target value. The phantom Deutsche Börse shares are subject to a performance period of three years (vesting period: grant year and two subsequent years). The entitlement to a variable share bonus is settled in cash and only arises at the end of the vesting period. The share bonus is variable in two ways: the number of phantom shares varies, dependent on the performance of Deutsche Börse’s total shareholder return (TSR) compared to the TSR of the STOXX ® Europe 600 Financials index. If the average performance of Deutsche Börse AG’s TSR in this period moves parallel to the average TSR of the benchmark index, the number of phantom shares remains unchanged. If the TSR of Deutsche Börse AG is 50 percent or less than the index’s TSR, the number of phantom shares falls to nil. If the TSR of Deutsche Börse AG’s shares is at least twice that of the index, the number of shares doubles. The following table shows the relationship between TSR performance and the number of shares:
The second variable is the share price. The number of shares calculated at the end of the vesting period is multiplied by the share price applicable to that time (average price/Xetra closing price of the Deutsche Börse share in the preceding two full calendar months). This gives the value of the variable share component. The Supervisory Board has set the maximum variable share component at 250 percent of the original target value.
Since the variable share component described above has been applied for the first time in 2010, the Executive Board members will receive a possible share bonus for the first time in 2013. For the 2008 and 2009 tranches under the former Stock Bonus Plan (SBP), they will receive a variable share component if they were in office throughout these two years. Under the SBP, one-third of the variable remuneration was granted in the form of phantom shares for both 2008 and 2009. These shares are subject to a vesting period and will be paid out to the Executive Board members in spring 2011 and spring 2012, respectively. The Supervisory Board may choose whether to settle the award in cash or shares. The expense from the variable share component incurred in the year under review is presented together with the carrying amount as at the balance sheet date in the following tables. See also note 45 in the notes to the consolidated financial statements.
A modified Black-Scholes option pricing model (Merton model) was used to measure the number of stock options arising from the 2010 variable share component (previousyear: 2009 tranche). The model does not take exercise hurdles into account. The number of stock options was calculated as at the balance sheet date taking into account the performance of the total shareholder return relative to the performance of the share price of Deutsche Börse AG. It is based on the following valuation parameters:
Termination benefits There are two different retirement benefit systems for Deutsche Börse AG Executive Board members. Members of the Executive Board who were first employed before 1 January 2009 receive a defined benefit pension. Executive Board members who were first employed after that date receive a defined contribution pension. The pensionable income and the present value of the existing pension commitments as at 31 December 2010 are presented in the table “Retirement benefits”. Contractual changes and amendments to retirement benefit agreements The former connection between basic remuneration and the replacement rate used to calculate the pensionable income has been eliminated. As of 2010, the amount of the pensionable income is regularly reviewed by the Supervisory Board. The retirement benefit agreements with the Executive Board members were amended in some areas as part of the revised remuneration system for the Executive Board. In this context, Mr Pottmeyer received a pension agreement under the defined contribution pension system described below. This also includes the provisions relating to “Death and permanent occupational incapacity benefits” and “Transition payments”. Changes to existing retirement benefit agreements consisted of the inclusion of an agreement on transition payments in line with the details provided in the “Transition payments” section in the pension agreements for Dr Francioni and Mr Tessler.
Amount of the Executive Board remuneration The following overviews show the remuneration actually granted to each member of the Executive Board for the 2010 and 2009 financial years. Retirement benefits The members of the Executive Board are entitled to pension benefits after reaching the age of 60 or 63, if they are no longer in the employment of Deutsche Börse AG at that time. In accordance with the Articles of Association of Deutsche Börse AG, membership of the Executive Board generally terminates when the members attain the age of 60. This age limit may be exceeded in individual cases if it is in the Company’s interest. Defined benefit retirement benefit system
After reaching the contractually agreed retirement age of 60 or 63, members of the Executive Board to whom the defined benefit retirement benefit system is applicable receive a specified percentage (replacement rate) of their individual pensionable income as a pension. This is subject to the Executive Board member in question having served on the Executive Board for at least three years and having been reappointed at least once. Pensionable income is determined and regularly reviewed by the Supervisory Board. When the term of office begins, the replacement rate is 30 percent. It rises by five percentage points with each reappointment, up to a maximum of 50 percent.
As a rule, the benefit is granted in the form of a monthly pension. The benefit may also be paid out in the form of a one-off capital payment or in five instalments, provided that the Supervisory Board has adopted a corresponding resolution at the Executive Board member’s request. Defined contribution retirement benefit system
For Executive Board members to whom the defined contribution benefit system applies, the Company makes a contribution in the form of a capital component in each calendar year they serve on the Executive Board. This contribution is determined by applying an individual replacement rate to the pensionable income. As in the defined benefit retirement benefit system, the pensionable income is determined and regularly reviewed by the Supervisory Board. The annual capital components calculated in this way bear interest corresponding to the discount rate used to measure pension liabilities in the Company’s German financial statements in accordance with section 253 (2) of the Handelsgesetzbuch (HGB, the German Commercial Code), but at least 3 percent annually. As a rule, the benefit is also granted in the form of a monthly pension in the defined contribution system. The benefit may also be paid out in the form of a one-off capital payment or in five instalments, provided that the Supervisory Board has adopted a corresponding resolution at the Executive Board member’s request.
Early retirement pension Members of the Executive Board who have a defined benefit pension are entitled to an early retirement pension if the Company does not extend their contract, unless the reason for this is attributable to the Executive Board member and would justify termination without notice of the Executive Board member’s contract. The amount of the early retirement pension is calculated in the same way as the retirement benefits by applying the relevant replacement rate to the pensionable income. Again, this is subject to the Executive Board member having served on the Executive Board for at least three years and having been reappointed at least once. In addition, an Executive Board member must have reached the age of 55 to qualify for the early retirement pension. Members of the Executive Board who have a defined contribution pension are not eligible for early retirement benefits. Death and permanent occupational incapacity benefits In the event of the permanent occupational incapacity of a member of Deutsche Börse AG’s Executive Board, the Company is entitled to retire the Executive Board member in question. Permanent occupational incapacity exists if an Executive Board member is unable to perform his or her professional activities for more than six months and it is not expected that his or her occupational capacity will be regained within a further six months. In such cases, Executive Board members who have a defined benefit pension plan receive the amount calculated by applying the relevant replacement rate to the pensionable income. Executive Board members with a defined contribution pension plan receive the benefit assets acquired when the benefits fall due, plus an allocated amount. The allocated amount corresponds to the full annual pension contribution that would have been due in the year of leaving service multiplied by the number of years between the benefits falling due and the Executive Board member reaching the age of 59. In the event of the death of an Executive Board member, his or her spouse receives 60 percent of the above amount and each dependent child receives 10 percent (25 percent for full orphans). Transitional payments In the event of permanent occupational incapacity, the agreements under the defined benefit retirement benefit system of Deutsche Börse AG’s Executive Board provide for a transitional payment in addition to the benefits described above. The amount of this payment corresponds to the amount of the target variable remuneration (cash and share bonuses) in the year in which the benefits fall due, and is paid out in two tranches in the two subsequent years. In the case of the death of an Executive Board member, his or her spouse receives 60 percent of the transitional payment. A transitional payment is only made in the case of defined benefit pension agreements. Severance payments In the event of early termination of an Executive Board member’s contract of service without good reason, any payments made to the Executive Board member may not exceed the remuneration for the residual term of the contract of service and, additionally, the value of two total annual remuneration payments (severance cap). The payment is calculated based on the total remuneration in the past financial year and, where appropriate, the expected total remuneration for the current financial year. The Supervisory Board may exceed the upper limit in exceptional justified cases. Change of control If an Executive Board member is asked to stand down within six months of a change of control, he or she is entitled to a severance payment equal to two total annual remuneration payments or the value of the residual term of his or her contract of service, where this is less than two years. 150 percent of this severance payment may be awarded. If an Executive Board member resigns within six months of the change of control because his or her position as a member of the Executive Board is significantly negatively impacted as a result of the change of control, the Supervisory Board may decide at its discretion whether to grant a severance payment of the above-mentioned amount. This provision applies to all new contracts and reappointments of members of Deutsche Börse AG’s Executive Board since 1 July 2009. For Executive Board members whose contracts were entered into before 1 July 2009 the former regulation continues to apply – but in any event for no longer than the date of their next reappointment – according to which they are entitled to a severance payment both in the case of being asked to step down and of resigning within six months of a change of control. This consists of compensation for the residual term of the contract as well as an additional severance payment of up to twice the annual benefits, whereby the sum of the compensation and severance payment may not exceed five times the annual benefits.
Other provisions Secondary employment Additional appointments or secondary employment by an individual member of the Executive Board require the approval of the entire Executive Board and the Chairman of the Supervisory Board or, in certain cases, the entire Supervisory Board, which has delegated the granting of approval to the Personnel Committee. If a member of the Executive Board is remunerated for an appointment in an affiliate of Deutsche Börse AG, this is offset against the Executive Board member’s entitlement to remuneration from Deutsche Börse AG. Loans to Executive Board members
The Company granted no advances or loans to members of the Executive Board in financial year 2010.
Payments to former members of the Executive Board Former members of the Executive Board or their surviving dependents received remuneration of €1.3 million in the year under review. The actuarial present value of the pension obligations as at the balance sheet date was €32.6 million in the year under review.
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