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| Remuneration of the Management Board |
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The remuneration paid to the Management Board of Carl Zeiss Meditec AG consists of a fixed and a variable portion. The variable portion is split into two components: the first component is contingent upon the achievement of certain targets for the respective financial year and the second bears a long-term incentive effect and risk elements.
The fixed portion of the remuneration paid to the Management Board is not contingent upon the achievement of certain targets. It is paid monthly.
The variable portion of the remuneration, which relates to targets set for the respective financial year, is contingent upon the achievement of certain quantitative and qualitative targets. The quantitative targets, which bear the most weight, are revenue, EBIT, free cash flow and Economic Value AddedŽ ("EVAŽ"). Strategic targets agreed individually between the Chairman of the Supervisory Board and the members of the Management Board are also taken into consideration. This portion of the remuneration is paid after the end of the respective financial year. The amount is contingent upon the degree of target fulfillment.
In addition to the two components of Management Board remuneration described above, there is also a so-called Long Term Incentive Program ("LTIP"), which was last published in financial year 2007/2008 and had a term of three years. The program was suspended during the global financial crisis in financial years 2008/2009 and 2009/2010, and was re-established in financial year 2010/2011. The last tranche was paid out during financial year 2010/2011. This LTIP consists of a remuneration component with a long-term incentive effect and risk elements. As part of the LTIP tranches Management Board members could, at the end of the respective three-year period, achieve an additional "target income" amounting to 30% of their respective annual salaries (consisting of a fixed and a variable component) for the first year of each tranche period.
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