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Allianz Annual Report 2013

Annual Report 2013    Allianz Group38 performance reached the 165 % cap: base salary € 700  Thou + 165 % of € 2,100 Thou (= total of the three variable compensation components at target). Variable compensation components: −− Annual bonus (short-term): A cash payment which rewards the achievement of quantitative and qualitative targets for the respective financial year and is paid the year following the per­ formance year. Quantitative targets represent 75 % and consist of 50 % Group targets (equally split between annual operating profit and annual net income) and 25 % divisional targets. For the ­divisional targets a new split was introduced for 2013:10 % annual operating profit, 10 % annual net income and 5 % dividend. ­Quantitative targets for board members with a functional focus are determined based on their key responsibilities. Qualitative targets reflect the specific individual priorities for 2013 per member of the Board of Management. Illustration of the process and the underlying timeline of the MTB cycle, from target setting to final performance assessment1 € thou 20132 20142 20152 20163 Dec 2012 Accrual 930 Sustainability criteria setting for the three-year performance period Initial accrued amounts ± Sustainability assessment = Final payout Total 2,100 Accrual 620 Accrual 550 Accrual 930 Accrual 620 Accrual 550 Notional accruals 0 % 165 % Min: 0 Max: 3,465 Target: 2,100 Sustainability criteria setting Performance period Sustainability assessment & payout  Year 1   Year 2   Year 3 1 Example based on target values of a regular member of the Board of Management with an annual target of € 700  THOU for the MTB. Accrual is only a notional indication. 2 Actual accrual for the MTB (mid-term) usually equals the annual bonus payout of the respective financial year. Since the performance assessment and the final payout occur after completion of the performance cycle this value is only a notional indication. 3 Final payout is subject to the sustainability assessment of the Supervisory Board and may vary within the full range between 0 % – 165 % of the cumulative target values independent of the notional accruals. The performance of the Chairman is determined by the average target achievement of the other Board of Management members and can be adjusted by the Supervisory Board based on the Chairman’s personal performance. −− MTB (mid-term): A deferred award which reflects the achieve­ ment of the annual targets by accruing an amount identical to the annual bonus. The actual award is subject to a three-year sustainability assess­ment and is paid at the end of a three-year performance cycle. The following criteria are considered: −− adjusted capital growth vs. planned development in light of risk capital employed (adjusted capital essentially represents the fair value of the shareholders’ equity) −− balance sheet strength, i.e. development of solvency capital −− comparison with peers −−“partner of choice” for stakeholders −− extraordinary events.

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