Since the German Corporate Governance Code was introduced in 2002, Deutsche Börse Group has disclosed the remuneration of the members of its Executive Board on an individualized basis. Deutsche Börse Group currently reports this remuneration in accordance with German Accounting Standard (GAS) 17 “Reporting on Executive Body Remuneration”, as published in the Bundesanzeiger (federal gazette) on 5 June 2008. Deutsche Börse Group has applied this Standard voluntarily since 2007. This report also includes the information required by the Handelsgesetzbuch (HGB, the German Commercial Code) and the International Financial Reporting Standards (IFRSs). 
Performance-related remuneration for the Executive Board Members of the Executive Board of Deutsche Börse AG are paid annual remuneration comprising a fixed and a variable component. The criteria governing the appropriateness of the Executive Board’s remuneration are the tasks of each Executive Board member and his or her individual performance on the one hand, and the performance of the entire Executive Board and of the Company, as well as Deutsche Börse AG’s economic position and prospects on the other. The fixed, non-performance-related component consists of a fixed monthly salary and other salary components, such as taxable contributions towards private pensions, taxable lump-sum telephone allowances and/or the use of company cars, while the variable component consists of performance-related remuneration and long-term incentive elements (Stock Bonus Plan, SBP). In 2007, the SBP replaced the previous phantom stock option plan. Members of the Executive Board have also received pension commitments. The fixed component is a monthly salary paid as non-performance-related basic remuneration. It is reviewed by the Supervisory Board’s Personnel Committee on a regular basis, or every two years at the latest. This review takes into account the current business area of each Executive Board member as well as the market situation. The performance-related variable remuneration component is determined annually. Its amount depends, among other things, on company- specific goals being achieved such as the implementation of company-wide projects or certain cost or revenue targets being met, as well as on the Executive Board members achieving their individual goals. In addition, further factors such as analytical skills, social skills, productivity, or leadership quality are taken into account. Two thirds of the performance-related remuneration is paid in cash after the end of the financial year and one third is transferred to the SBP. The table presented below shows the expenses for the fixed and variable remuneration, and entitlements under share-based payment arrangements granted in the year under review. Prior-year figures are given in brackets. As in the previous year, the figures relating to long-term incentive components in 2008 relate to shares from the SBP:
Deutsche Börse AG has also taken out a D&O (directors’ and officers’ liability insurance) policy for its Executive and Supervisory Board members. A temporary severance commitment was agreed for the Chief Executive Officer until the end of his first term of office (31 October 2008); this commitment expired on his reappointment. Retirement benefit agreements (“direct commitments”) have been entered into individually with all members of the Executive Board of Deutsche Börse AG. These commitments are primarily based on the following arrangements:
The pension expense comprises the current service cost and the past service cost. The following amounts were added to provisions and recognized as pension expense in the year under review:
Change-of-control arrangements On the basis of their contracts of service, the members of the Executive Board are entitled to severance payments if, in the event of a change of control, the contract of service is terminated within six months or if the member of the Executive Board, provided that no incident has been caused by his fault justifying the termination of his service agreement for cause, resigns his position because, as a result of the change of control, his position as a member of the Executive Board is subject to significant limitations. The payments in the event of a change of control are calculated on the basis of the capitalized remuneration (fixed salary and performance-related remuneration) for the remainder of the agreed contract term and of a severance payment of up to twice the annual remuneration in the amount of the remuneration for the most recent calendar year (fixed salary and performance-related remuneration). The resulting total may not exceed five times the annual remuneration. Any phantom stock options are settled on the date the member leaves the Executive Board. If a member of the Executive Board resigns, only 50 percent of the phantom stock options are paid out. The entitlement to shares from the Stock Bonus Plan remains in force and is settled in accordance with the provisions of the Stock Bonus Plan after the end of the waiting period.
Phantom stock option plan Deutsche Börse AG established a phantom stock option plan following its IPO on 5 February 2001 that ran until the end of 2006 and also applied to Executive Board members. The options issued have a maximum term of five years and a vesting period of three years. After the end of the vesting period, the options can be exercised in 14-day exercise windows until the end of each quarter in each case. The options are designed to be notional. They do not confer the right to purchase Deutsche Börse AG shares at a set price, but rather confer the right to a cash payout. The amount of the cash payout depends on the relative performance of Deutsche Börse AG shares (adjusted for dividend payments) against the Dow Jones STOXX® 600 Technology Index (EUR) (Return) as the benchmark index (€1.00 per 1 percent outperformance). Outperformance is calculated by determining the opening and closing prices of Deutsche Börse’s shares and of the benchmark index on the basis of the mean closing prices in Xetra® trading on Frankfurter Wertpapierbörse (FWB®; the Frankfurt Stock Exchange) and the mean closing prices of the index: the opening price for the 60 trading days prior to the grant of the stock options and the closing price for the 60 trading days prior to the cut-off dates on which the exercise windows begin (1 February, 1 May, 1 August and 1 November). Phantom stock options were issued annually on 1 February. The Supervisory Board’s Personnel Committee determined the number of options to be granted to each Executive Board member based on the individual performance of the respective Board member. See note 46 in the notes to the consolidated financial statements of the annual report 2008 for details of the measurement of the stock option plan for the Executive Board. The total expense/income for the options recognized in the year under review and the carrying amount of the provisions recognized for the options at the balance sheet date are shown in the table below. As in the previous year, there were no exercisable options on the balance sheet date.
Stock Bonus Plan In 2007, the Stock Bonus Plan (SBP) replaced the phantom stock option plan of recent years. The SBP makes it possible to grant not just cash but also shares of Deutsche Börse AG as a variable remuneration component, thus giving beneficiaries a greater share in the Company’s success and strengthening their ties with the Company. For the year under review, the members of the Executive Board will receive one third of their variable remuneration converted into shares of Deutsche Börse AG as a long-term incentive component (“number of SBP shares”). The number of SBP shares is calculated by dividing the amount of the individual and performance-based bonus (one third of the variable remuneration) of each Executive Board member by the market price of the Company (closing auction price of Deutsche Börse shares in electronic trading on the Frankfurt Stock Exchange) on the date the bonus is determined. Neither the converted bonus nor the number of shares will be paid at the time the bonus is determined; they are paid two years after the grant date (waiting period). On expiry of the waiting period, the original number of SBP shares is first converted into a payment claim. This is done by multiplying the current market price on that day (closing auction price of Deutsche Börse shares in electronic trading on the Frankfurt Stock Exchange) by the number of SBP shares. The Company then has the option to settle the payment claim for the Executive Board member in cash or shares. In accordance with IFRS 2, the total number of SBP shares is measured at fair value on the grant date. For the year under review, the fair value was calculated on the basis of the opening price on the preparation date of this report. A modified Black-Scholes option pricing model (Merton model) was used to measure the number of SBP shares from the 2008 tranche (previous year: 2007 tranche). The model does not take exercise hurdles into account. It is based on the following valuation parameters:
The expense from the Stock Bonus Plan incurred in the year under review is presented together with the carrying amount at the balance sheet date in the bottom table to the left. See also note 46 in the notes to the consolidated financial statements.
The following table shows the changes in the number of SBP shares received for the year under review.
Former members of the Executive Board or their surviving dependents Former members of the Executive Board or their surviving dependents received remuneration of €1,151 thousand in 2008 (2007: €922 thousand). The actuarial present value of the pension obligations (DBO) at the balance sheet date was €27,182 thousand in the year under review (2007: €30,251 thousand).
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