Commitments upon termination of service

Retirement provision. The pension agreements of some Board of Management members include a commitment to an annual retirement pension, calculated as a proportion of the former base salary and depending on the number of years of service. Those pension rights were granted until 2005 and remain valid; the same procedure was applied for the relevant hierarchy level for Wilfried Porth for the period before his membership of the Board of Management. The pension rights have been frozen at that level, however. Payments of these retirement pensions start upon request when the term of service ends at or after the age of 60, or are paid as disability pensions if the term of service ends before the age of 60 due to disability. The respective agreements provide for 3.5% annual increases starting when benefits are received (with the exception that Wilfried Porth’s benefits are adjusted in accordance with applicable law). The agreements include a provision by which a spouse of a deceased Board of Management member is entitled to 60% of that member’s pension. That amount can increase by up to 30 percentage points depending on the number of dependent children.

Effective as of January 1, 2006, we replaced the pension agreements of the Board of Management members with a new arrangement, the so-called pension capital system. Under this system, each Board of Management member is credited with a capital component each year. This capital component comprises an amount equal to 15% of the sum of the Board of Management member’s fixed base salary and the actual annual bonus, multiplied by an age factor equivalent to a rate of return of 6% until 2015 and 5% as of 2016 (Wolfgang Bernhard and Wilfried Porth: 5% for all years). These contributions to pension plans are granted only until the age of 60. The benefit from the pension plan is payable to surviving Board of Management members at the earliest at the age of 60, also if retirement is before 60. If a member of the Board of Management retires due to disability, the benefit is paid as a disability pension, also before the age of 60.

In 2012, Daimler introduced a new company retirement benefit plan for new entrants and new appointments for employees paid according to collective bargaining wage tariffs as well as for executives: the “Daimler Pensions Plan.” As before, the new retirement benefit system features the payment of annual contributions by Daimler, but is oriented towards the capital market. Daimler makes a commitment to guarantee the total of contributions paid, which are invested in the capital market according to a precautionary investment concept. The Supervisory Board of Daimler AG has approved the application of this system for all members of the Board of Management newly appointed since 2012. The amount of the annual contributions results from a fixed percentage of the base salary and the total annual bonus for the respective financial year calculated as of the balance sheet date. This percentage is 15 %. This calculation takes into consideration the targeted level of retirement provision for each Board of Management member-also according to the period of membership-and the resulting annual and long-term expense for the Company. The contributions to retirement provision are granted until the age of 62. The benefit from the pension plan is payable to surviving Board of Management members at the earliest at the age of 62, irrespective of their age upon retirement. If a member of the Board of Management retires due to disability, the benefit is paid as a disability pension, irrespective of their age upon retirement.

Payments under the pension capital system and the Daimler Pensions Plan can be made in three ways:

  • as a single amount;
  • in twelve annual installments, whereby interest accrues on each partial amount until it is paid out (Pension Capital 6% or 5%; Daimler Pensions Plan in accordance with applicable law);
  • as an annuity with annual increases (Pension Capital 3.5% or in accordance with applicable law; Daimler Pensions Plan in accordance with applicable law).

The contracts specify that if a Board of Management member passes away before retiring for reason of age, the spouse or dependent children is/are entitled to the full committed amount in the case of the pension capital system, and to the credit amount reached plus an imputed amount until the age of 62 in the case of the Daimler Pensions Plan. If a Board of Management member passes away after retiring for reason of age, in the case of payment of twelve annual installments, the heirs are entitled to the remaining present value. In the case of a pension with benefits for surviving dependents, the spouse/registered partner or dependent children is/are entitled to 60% of the discounted terminal value (pension capital), or the spouse/registered partner is entitled to 60% of the actual pension (Daimler Pensions Plan).

Departing Board of Management members with pension agreements modified as of the beginning of 2006 receive, for the period between the end of the last contract period and reaching the age of 60, payments in the amounts of the pension commitments granted as described in the previous section. Departing Board of Management members are also provided with a company car, in some case for a defined period. These payments are made until the age of 60, possibly reduced due to other sources of income, and are subject to annual percentage increases described above in the explanation of these pension agreements.

Service costs for pension obligations according to IFRS amounted to €2.8 million in 2014 (2013: €2.5 million). The present value of the total defined benefit obligation according to IFRS amounted to €80.5 million at December 31, 2014 (December 31, 2013: €70.1 million). Taking age and period of service into account, the individual entitlements, service costs and present values are shown in the table B.50.

B.50

Individual entitlements, service costs and present values for members of the Board of Management
    Annual pension (as regulated until 2005) as of age 60 Service cost (for pension, pension capital and Daimler Pensions Plan) Present value2 of obligations (for pension, pension capital and Daimler Pensions Plan)
In thousands of euros        
 
Dr. Dieter Zetsche 2014 1,050 827 39,238
  2013 1.050 29,896
Dr. Wolfgang Bernhard 2014 380 2,565
  2013 401 1,774
Wilfried Porth 2014 156 220 8,788
  2013 156 223 6,579
Andreas Renschler1 2014 225 30
  2013 250 423 9,798
Hubertus Troska 2014 314 3,321
  2013 272 2,488
Bodo Uebber 2014 275 676 14,148
  2013 275 714 10,127
Prof. Dr. Thomas Weber 2014 300 333 12,454
  2013 300 426 9,444
 
Total 2014 2,006 2,780 80,514
  2013 2,031 2,459 70,106
1  Mr. Renschler pro rata until January 28, 2014.
2  The sharp increase in the present values is primarily due to the decrease in the relevant discount rate.
Dr. Hohmann-Dennhardt has no entitlement to a company retirement benefit.

Commitments upon early termination of service. In the case of early termination of a service contract without an important reason, Board of Management service contracts include commitments to payment of the base salary and provision of a company car until the end of the original service period at a maximum. Such persons are only entitled to payment of the annual bonus pro rata for the period until the end of the contract of service or of the Board of Management membership takes effect. Entitlement to payment of the performance-related component of remuneration with a long-term incentive effect that has already been allocated is defined by the conditions of the respective plans. To the extent that the payments described above are subject to the provisions of the so-called severance cap of the German Corporate Governance Code, their total including fringe benefits is limited to double the annual remuneration and may not exceed the total remuneration for the remaining period of the service contract.

Sideline activities of Board of Management members. The members of the Board of Management should accept management board or supervisory board positions and/or any other administrative or honorary functions outside the Group only to a limited extent. Furthermore, they require the consent of the Supervisory Board before commencing any sideline activities. This ensures that neither the time required nor the remuneration paid for such activities leads to any conflict with the members’ duties to the Group. Insofar as such sideline activities are memberships of other statutory supervisory boards or comparable boards of business enterprises, they are disclosed in the notes to the annual company financial statements of Daimler AG and on our website. In general, Board of Management members have no right to separate remuneration for board positions held at other companies of the Group.

Loans to members of the Board of Management. In 2014, no advances or loans were made to members of the Board of Management of Daimler AG.

Payments made to former members of the Board of Management of Daimler AG and their survivors. Payments made in 2014 to former members of the Board of Management of Daimler AG and their survivors amounted to €16.8 million (2013: €14.6 million). Pension provisions for former members of the Board of Management and their survivors amounted to €263.0 million at December 31, 2014 (2013: €217.0 million).

Details of Board of Management remuneration in 2014 pursuant to the requirements of the German Corporate Governance Code

The following tables show for each individual member of the Board of Management on the one hand the benefits granted for the financial year and on the other hand the payments made in or for the financial year and the retirement pension expense in or for the financial year in accordance with the recommendations of Clause 4.2.5 paragraph 3 of the German Corporate Governance Code.

The total of “benefits granted” for financial year 2013 is calculated from:

  • the base salary in 2013,
  • the taxable non-cash benefits and other fringe benefits in 2013,
  • the half of the annual bonus payable in 2014 for 2013 at the value with target achievement of 100%,
  • the half of the share-based component of the annual bonus payable in 2015 for 2013 at the value with target achievement of 100%,
  • the value of the long-term share-based remuneration at the time when granted in 2013 (payable in 2017) and
  • the retirement pension expense in 2013 (service cost in 2013).

The total of “benefits granted” for financial year 2014 is calculated from

  • the base salary for 2014,
  • the taxable non-cash benefits for the year 2014,
  • the half of the annual bonus payable in 2015 for 2014 at the value with target achievement of 100%,
  • the half of the share-based annual bonus payable in 2016 for 2014 at the value with target achievement of 100%,
  • the value when granted in 2014 of the long-term share-based remuneration (payable in 2018), and
  • the retirement pension expense in 2014 (service costs in 2014).

B.51

Benefits granted
  Dr. Dieter Zetsche
Chairman of the Board of Management and Head of Mercedes-Benz Cars
Dr. Wolfgang Bernhard
Daimler Trucks and Buses
 
  Jan. 1 - Dec. 31, Jan. 1 - Dec. 31, Jan. 1 - Dec. 31, Jan. 1 - Dec. 31,
  2013 2014 min. max. 2013 2014 min. max.
In thousands of euros                
                 
Base salary 2,008 2,008 2,008 2,008 715 779 779 779
Taxable non-cash benefits and other fringe benefits 151 163 163 163 90 163 163 163
Total 2,159 2,171 2,171 2,171 805 942 942 942
Annual variable remuneration (50% of annual bonus, short-term) 1,004 1,004 0 2,360 358 390 0 916
Deferral (50% of annual bonus, medium-term) 1,004 1,004 0 2,360 358 390 0 916
Long-term variable remuneration (plan period of 4 years) 2,825 2,902 0 6,875 1,130 1,228 0 2.910
Total 4,833 4,910 0 11,595 1,846 2,008 0 4,742
Retirement pension expense (service costs) 827 827 827 401 380 380 380
                 
Total remuneration 6,992 7,908 2,998 14,593 3,052 3,330 1,322 6,064
Total limit1 for components of remuneration granted in 2014 Excluding – Taxable non-cash benefits and other fringe benefits – Retirement pension expense (service costs)       10,149






 
      5,172






 
1  Total limit = maximum amount for financial year 2014 -> 1.5 times (Dr. Zetsche)/1.9 times target remuneration 2014 (base salary, target annual bonus, value when granted of PPSP, excluding fringe benefits and retirement pension commitments).

B.51

Benefits granted
  Dr. Christine Hohmann-Dennhardt
Integrity & Legal Affairs
 
Wilfried Porth
HR & Labor Relations Director and Mercedes-Benz Vans
  Jan. 1 - Dec. 31, Jan. 1 - Dec. 31, Jan. 1 - Dec. 31, Jan. 1 - Dec. 31,
  2013 2014 min max 2013 2014 min max
In thousands of euros                
                 
Base salary 715 758 758 758 715 758 758 758
Taxable non-cash benefits and other fringe benefits 84 94 94 94 93 93 93 93
Total 799 852 852 852 808 851 851 851
Annual variable remuneration (50% of annual bonus, short-term) 358 379 0 891 358 379 0 891
Deferral (50% of annual bonus, medium-term) 358 379 0 891 358 379 0 891
Long-term variable remuneration (plan period of 4 years) 1,130 1,161 0 2,750 1,130 1,214 0 2,875
Total 1,846 1,919 0 4,532 1,846 1,972 0 4,657
Retirement pension expense (service costs) 223 220 220 220
                 
Total remuneration 2,645 2,711 852 5,384 2,877 3,043 1,071 5,728
Total limit1 for components of remuneration granted in 2014 Excluding – Taxable non-cash benefits and other fringe benefits – Retirement pension expense (service costs)       4,971












 
      5,066












 
1  Total limit = maximum amount for financial year 2014 -> 1.5 times (Dr. Zetsche)/1.9 times target remuneration 2014 (base salary, target annual bonus, value when granted of PPSP, excluding fringe benefits and retirement pension commitments).

B.51

Benefits granted
  Andreas Renschler2
 
Hubertus Troska
Greater China
  Jan. 1 - Dec. 31, Jan. 1 - Jan. 28, Jan. 1 - Dec. 31, Jan. 1 - Dec. 31,
  2013 2014 min. max. 2013 2014 min. max.
In thousands of euros                
                 
Base salary 755 62 62 62 715 758 758 758
Taxable non-cash benefits and other fringe benefits 511 8 8 8 603 431 431 431
Total 1,266 70 70 70 1,318 1,189 1,189 1,189
Annual variable remuneration (50% of annual bonus, short-term) 378 31 0 73 358 379 0 891
Deferral (50% of annual bonus, medium-term) 378 31 0 73 358 379 0 891
Long-term variable remuneration (plan period of 4 years) 1,262 1,130 1,161 0 2,750
Total 2,018 62 0 146 1,846 1,919 0 4,532
Retirement pension expense (service costs) 423 30 30 30 272 314 314 314
                 
Total remuneration 3,707 162 100 246 3,436 3,422 1,503 6,035
Total limit1 for components of remuneration granted in 2014 Excluding – Taxable non-cash benefits and other fringe benefits – Retirement pension expense (service costs)       233






 
      4,971






 
1  Total limit = maximum amount for financial year 2014 -> 1.5 times (Dr. Zetsche)/1.9 times target remuneration 2014 (base salary, target annual bonus, value when granted of PPSP, excluding fringe benefits and retirement pension commitments).
2  In 2014, Board of Management remuneration granted until January 28, 2014.

B.51

Benefits granted
  Bodo Uebber
Finance & Controlling and Daimler Financial Services
Prof. Dr. Thomas Weber
Group Research & Mercedes-Benz Cars Development
  Jan. 1 - Dec. 31,, Jan. 1 - Dec. 31, Jan. 1 - Dec. 31, Jan. 1 - Dec. 31,
  2013 2014 min max 2013 2014 min max
In thousands of euros                
                 
Base salary 866 901 901 901 715 758 758 758
Taxable non-cash benefits and other fringe benefits 112 332 332 332 210 121 121 121
Total 978 1,233 1,233 1,233 925 879 879 879
Annual variable remuneration (50% of annual bonus, short-term) 433 451 0 1,060 358 379 0 891
Deferral (50% of annual bonus, medium-term) 433 451 0 1,060 358 379 0 891
Long-term variable remuneration (plan period of 4 years) 1,351 1,388 0 3,288 1,200 1,233 0 2,920
Total 2,217 2,290 0 5,408 1,916 1,991 0 4,702
Retirement pension expense (service costs) 714 676 676 676 426 333 333 333
                 
Total remuneration 3,909 4,199 1,909 7,317 3,267 3,203 1,212 5,914
Total limit1 for components of remuneration granted in 2014 Excluding – Taxable non-cash benefits and other fringe benefits – Retirement pension expense (service costs)       5,922












 
      5,100












 
1  Total limit = maximum amount for financial year 2014 -> 1.5 times (Dr. Zetsche)/1.9 times target remuneration 2014 (base salary, target annual bonus, value when granted of PPSP, excluding fringe benefits and retirement pension commitments).

The total of “payments made” for financial year 2013 is calculated from:

  • the base salary in 2013,
  • the taxable non-cash benefits and other fringe benefits in 2013,
  • the half of the annual bonus payable in 2014 for 2013 at the value as of the end of the reporting period,
  • the half of the share-based annual bonus paid in 2013 for 2011,
  • the value of the long-term share-based payment (PPSP 2009) paid in 2013,
  • the dividend equivalent of the current PPSP (2010, 2011, 2012 and 2013) paid in 2013,
  • the value of stock options 2004 when exercised (as defined by German tax law), and
  • the retirement pension expense in 2013 (service costs in 2013).

The total of “payments made” for financial year 2014 is calculated from:

  • the base salary in 2014,
  • the taxable non-cash benefits and other fringe benefits in 2014,
  • the half of the annual bonus payable in 2015 for 2014 at the value as of the end of the reporting period,
  • the half of the share-based annual bonus paid in 2014 for 2012,
  • the amount of the long-term share-based remuneration (PPSP 2010) paid in 2014,
  • the dividend equivalent of the current PPSP (2011, 2012, 2013 and 2014) paid in 2014, and
  • the retirement pension expense in 2014 (service costs in 2014).

B.52

Payments made
  Dr. Dieter Zetsche
Chairman of the Board of Management and Head of Mercedes-Benz Cars
Dr. Wolfgang Bernhard
Daimler Trucks and Buses
 
 
  Jan. 1 -
Dec. 31,
Jan. 1 -
Dec. 31,
Jan. 1 -
Dec. 31,
Jan. 1 -
Dec. 31,
  2013 2014 2013 2014
In thousands of euros        
         
Base salary 2,008 2,008 715 779
Taxable non-cash benefits and other fringe benefits 151 163 90 163
Total 2,159 2,171 805 942
Annual variable remuneration (50% of annual bonus, short-term) 1,707 1,727 590 670
Deferral (50% of annual bonus, medium-term) 1,834 1,583 653 564
Long-term variable remuneration        
Payment of PPSP 2009 5,117 - 744 -
Payment of PPSP 2010 - 7,524 - 2,770
Dividend equivalent PPSP 2010 261 - 96 -
Dividend equivalent PPSP 2011 111 195 44 78
Dividend equivalent PPSP 2012 150 154 60 61
Dividend equivalent PPSP 2013 140 143 56 57
Dividend equivalent PPSP 2014 - 98 - 41
Exercise of stock options 2004 2,195 - - -
Total 11,515 11,424 2,243 4,241
Retirement pension expense (service costs) - 827 401 380
         
Total remuneration 13,674 14,422 3,449 5,563

B.52

Payments made
  Dr. Christine Hohmann-Dennhardt
Integrity & Legal
 
Wilfried Porth
HR & Labor Relations Director and Mercedes-Benz Vans
  Jan. 1 -
Dec. 31,
Jan. 1 -
Dec. 31,
Jan. 1 -
Dec. 31,
Jan. 1 -
Dec. 31,
  2013 2014 2013 2014
In thousands of euros        
         
Base salary 715 758 715 758
Taxable non-cash benefits and other fringe benefits 84 94 93 93
Total 799 852 808 851
Annual variable remuneration (50% of annual bonus, short-term) 590 633 608 652
Deferral (50% of annual bonus, medium-term) 556 584 637 564
Long-term variable remuneration        
Payment of PPSP 2009 - - 1,693 -
Payment of PPSP 2010 - - - 3,009
Dividend equivalent PPSP 2010 - - 105 -
Dividend equivalent PPSP 2011 39 68 44 78
Dividend equivalent PPSP 2012 60 61 60 61
Dividend equivalent PPSP 2013 56 57 56 57
Dividend equivalent PPSP 2014 - 39 - 41
Exercise of stock options 2004 - - - -
Total 1,301 1,442 3,203 4,462
Retirement pension expense (service costs) - - 223 220
         
Total remuneration 2,100 2,294 4,234 5,533

B.52

Payments made
  Andreas Renschler1
 
Hubertus Troska
Greater China
  Jan. 1 -
Dec. 31,
Jan. 1 -
Dec. 31,
Jan. 1 -
Dec. 31,
Jan. 1 -
Dec. 31,
  2013 2014 2013 2014
In thousands of euros        
         
Base salary 755 62 715 758
Taxable non-cash benefits and other fringe benefits 511 8 603 431
Total 1,266 70 1,318 1,189
Annual variable remuneration (50% of annual bonus, short-term) 623 47 590 652
Deferral (50% of annual bonus, medium-term) 672 595 - 27
Long-term variable remuneration        
Payment of PPSP 2009 2,284 - 837 -
Payment of PPSP 2010 - - - 1,231
Dividend equivalent PPSP 2010 117 - 43 -
Dividend equivalent PPSP 2011 49 - 18 32
Dividend equivalent PPSP 2012 67 - 25 25
Dividend equivalent PPSP 2013 63 - 56 57
Dividend equivalent PPSP 2014 - - - 39
Exercise of stock options 2004 298 - - -
Total 4,173 642 1,569 2,063
Retirement pension expense (service costs) 423 30 272 314
         
Total remuneration 5,862 742 3,159 3,566
1  In 2014, Board of Management remuneration granted until January 28, 2014.

B.52

Payments made
  Bodo Uebber
Finance & Controlling and Daimler Financial Services
 
Prof. Dr. Thomas Weber
Group Research & Mercedes-Benz Cars Development
  Jan. 1 -
Dec. 31,
Jan. 1 -
Dec. 31,
Jan. 1 -
Dec. 31,
Jan. 1 -
Dec. 31,
  2013 2014 2013 2014
In thousands of euros        
         
Base salary 866 901 715 758
Taxable non-cash benefits and other fringe benefits 112 332 210 121
Total 978 1,233 925 879
Annual variable remuneration (50% of annual bonus, short-term) 736 775 626 652
Deferral (50% of annual bonus, medium-term) 791 707 653 544
Long-term variable remuneration        
Payment of PPSP 2009 2,447 - 2,172 -
Payment of PPSP 2010 - 3,598 - 3,194
Dividend equivalent PPSP 2010 125 - 111 -
Dividend equivalent PPSP 2011 53 93 47 83
Dividend equivalent PPSP 2012 72 73 64 65
Dividend equivalent PPSP 2013 67 68 59 61
Dividend equivalent PPSP 2014 - 47 - 41
Exercise of stock options 2004 - - 397 -
Total 4,291 5,361 4,129 4,640
Retirement pension expense (service costs) 714 676 426 333
         
Total remuneration 5,983 7,270 5,480 5,852

The caps possible to ensure the total maximum amount shown in the table of benefits granted in the year 2014 are implemented with the payout of PPSP 2014, which constitutes the last payment to be made of the components of remuneration granted in 2014. For the year 2014, therefore, the possible cap would take place in 2018, the year that PPSP 2014 is paid out.

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