Remuneration Report

Remuneration Report

This remuneration report is part of the  group management report and complies with the recommendations of the German Corporate Governance Code (GCGC) as well as the requirements of the German Commercial Code (HGB) and the German Accounting Standards (DRS 17). It explains the main points of the remuneration system for the Management Board and Supervisory Board and discloses the amount of remuneration for each individual in accordance with its different components.

Remuneration of the management board

The Supervisory Board of SolarWorld AG determines the remuneration system of the Management Board and negotiates with each Management Board member the individual Management Board remuneration amount derived from this system. The structure of the remuneration system targets the sustainable development of the company and accounts for the company’s distinctive characteristics as well as the relevant industry environment. The financial situation of the SolarWorld group is also taken into account.

The remuneration system of SolarWorld AG is composed of non-performance related and performance-related components. In accordance with Section 87 German Stock Corporation Act (AktG), the total remuneration for an individual Management Board member is reasonably proportionate to his or her tasks and the situation of the company.

Management contracts do not contain any severance provision for the case of premature termination of an employment relationship.

Non-performance related remuneration 

Non-performance related components comprise fixed annual compensation and fringe benefits. The fixed annual compensation is to be paid in twelve monthly installments at the end of each month. Fringe benefits include use of a company car as well as payment of the costs for accident and D&O insurance. The agreed deductible for the D&O insurance corresponds, in accordance with Section 93 para. 2 sentence 3 AktG, to at least 10 percent of the respective damage up to at least one and a half times the fixed annual compensation. In addition to that, the Chief Financial Officer (CFO), Chief Sales Officer (CSO), Chief Information Technology, Brand and Personnel Officer (CIBPO), and the Chief Product Officer (CPO) receive grants towards their health insurance. Moreover, the CFO, CSO, and CPO are provided with direct insurance in the highest amount permissible according to tax law. Work-related disbursements, expenses, and allowances are reimbursed in accordance with Section 670 of the German Civil Code (BGB).

Performance-related remuneration 

The remuneration system of SolarWorld AG contains a variable component that is linked to the economic development of the company. A sustainability component with a multi-year valuation basis completes the system.

The amount of remuneration is dependent on the degree to which the individual target values set for each Management Board member are reached, exceeded, or fallen short of. The key performance indicators whose development is used to measure the variable Management Board remuneration are return on sales calculated from consolidated EBITDA and revenue, groupwide shipments, and the achievement of predefined cost goals. The amount of annual performance-related remuneration is limited to an individually agreed maximum amount for each Management Board member.

Contrary to the recommendation of the GCGC (Section 4.2.3, para. 2 sentence 8), the Supervisory Board reserves the right to make retrospective alterations to the performance targets or to the comparison parameters. In a dynamically developing market environment, it can, from the perspective of the Supervisory Board, be sensible and expedient for the company to adapt the performance targets or the comparison parameters for variable remuneration components retrospectively to a changed environment in justified cases.

The variable remuneration of the Management Board members contains, as required under Section 4.2.3 GCGC and Section 87 para. 1 sentence 3 AktG, a sustainability component that depends on the company’s development over a time period of three years. Initially, only 75 percent of the variable bonus for the past fiscal year – to the extent that it depends on consolidated return on sales –will be advanced. After three years have passed, the final variable remuneration will be determined according to the average value from the last three years. If this turns out to be lower than the advance that has already been paid out, then no additional payment will be made. The advance is not recallable. If the final variable remuneration calculated according to the average value turns out to be higher than the advance that has already been paid, a supplementary payment will be made.  

Special Bonus

To ensure that the system fulfills its role as an incentive, the variable Management Board remuneration will be supplemented by special bonuses granted under certain circumstances. One example would be a special assignment carried out by the Management Board in economically difficult years that should be rewarded to maintain the competitiveness of Management Board remuneration. It is for this reason that the Supervisory Board, as the organ responsible for Management Board remuneration, may deem it appropriate to award Management Board members with a special bonus in addition to their variable remuneration to offer incentive.


There is no separate pension entitlement, which is why Management Board members are permitted to convert parts of their remuneration into company pension provisions.

Maximum Remuneration

In 2009, the Annual General Meeting decided to place an overall cap on Management Board remuneration per board member amounting to twenty times the average employee remuneration. On May 20, 2010, the AGM also declared approval of the system for compensating members of the Management Board in accordance with Section 120 para. 4 AktG. The Chairman of the Supervisory Board outlined the basic elements of the remuneration system and any changes thereto at the subsequent AGMs (Section 4.2.3 GCGC).

The Management Board remuneration complies with all guidelines of acceptability and the stipulations of the GCGC and the law adopted on June 18, 2009, for Permissibility of Management Board Remuneration (VorstAG). Incidentally, Management Board remuneration at SolarWorld AG already adhered to these principles before the VorstAG came into force. 

Remuneration of the Management Board 2015

Altogether, the total remuneration of the Management Board for the fiscal year 2015 amounted to k€ 2,718.5 (2014: k€ 2,275.6). The disclosure of the Management Board remuneration for the fiscal year 2015 was done in accordance with the recommendation of the GCGC in the version dated May 5, 2015 (Section 4.2.5). The uniform model tables make it possible to display separately the contributions and the actual allocation (meaning the payments made) for the year being reported. When considering the allocation, the remuneration values must also be provided which can be achieved in minimum or maximum. Furthermore, additional remuneration for Management Board membership in subsidiaries of SolarWorld AG is listed separately.

Management Board remuneration I: Benefits granted

Management Board remuneration II: Allocation



Remuneration of the Supervisory Board

In accordance with the Articles of Association, the Annual General Meeting held on May 30, 2014 approved the system of Supervisory Board remuneration with effect from June 1, 2014.

Every member of the Supervisory Board receives a yearly fixed remuneration of k€ 40.0 in addition to reimbursement for their expenditures in accordance with Section 670 German Civil Code (BGB). In accordance with Section 5.4.6 GCGC, the agreed remuneration system takes into account the chair and deputy chair of the Supervisory Board as well as the chair and members of the committees. The chairman of the Supervisory Board receives three times the fixed compensation, therefore earning k€ 120.0, and the deputy chairman receives double the fixed compensation, so k€ 80.0. Thus, membership or chairmanship in committees is also compensated. Ordinary members receive an additional k€ 5.0 in total for membership in one or more committees, in the case that the person is a committee chairman in at least one committee they will instead receive double, which would be k€ 10.0. There is no entitlement to variable extra pay or separate attendance pay.

All amounts are given plus VAT, if such tax is applicable. If tenure as a member of the Supervisory Board is taken up or ended during the year, then remuneration will be awarded pro rata temporis.

In addition to Supervisory Board remuneration, SolarWorld AG also takes responsibility for paying premiums for appropriate insurance protection in accordance with the legal liability inherent in duties on the Supervisory Board (D&O insurance). In accordance with Section 3.8 GCGC, the Supervisory Board voluntarily agreed on July 1, 2010 to a deductible of at least 10 percent for the respective damage and up to at least one and a half times the fixed annual remuneration.

Remuneration of the Supervisory Board 2015

The remuneration of the Supervisory Board for the 2015 fiscal year totaled k€ 517.9 (2014: k€ 311.9), and is shown individually in the following table:

Supervisory Board remuneration 2015