(1) The supervisory board of the listed company is to resolve on a clear and understandable system for the remuneration of the members of the management board. At a minimum, the remuneration system is to provide for the details of the following matters; however, it is to do so for remuneration components only insofar as they in fact form part of the system:
1. the determination of a maximum remuneration for the members of the management board;
2. the contribution the remuneration is to make to promoting the company’s business strategy and its long-term development;
3. all fixed and variable remuneration components and their relative share of the remuneration in each case;
4. all financial and non-financial criteria for granting variable remuneration components, including
a) an explanation of how these criteria will contribute to promoting the objectives set out under no. 2, and
b) a description of the methods used to determine whether the performance criteria have been met;
5. deferral periods applying to the disbursement of remuneration components;
6. means available to the company to reclaim variable remuneration components;
7. in the case of share-based remuneration:
a) time limits,
b) the conditions for holding shares of stock following the acquisition, and
c) an explanation of how this remuneration will contribute to promoting the objectives set out under no. 2;
8. as regards remuneration-related legal transactions:
a) their term and the pre-requisites for their termination, including the applicable periods of notice,
b) any undertakings to pay compensation for dismissal, and
c) the main features of the pension and early retirement schemes;
9. an explanation of how the remuneration terms and employment conditions of the company’s employees were taken into account in specifying the remuneration system, including an explanation as to which group of employees was involved;
10 a presentation of the procedure applied in establishing the remuneration system and in implementing it, as well as the procedure for reviewing it, including the role that any potentially affected committees played and the measures that were taken to avoid and deal with conflicts of interest;
11. in the event of a remuneration system being submitted that has been reviewed in accordance with section 120a (3):
a) an explanation of all key changes made and
b) a summary of the extent to which the coordination with the stockholders regarding the remuneration system and the remuneration reports as well as the stockholders’ comments were taken into account.
(2) The supervisory board of the listed company formally is to establish the remuneration of the members of the management board based on a remuneration system submitted to the general meeting pursuant to section 120a (1) for its endorsement. The supervisory board may deviate from the remuneration system temporarily where this is necessary in the interests of the company’s well-being over the long term, provided the remuneration system specifies the procedure for so deviating from the system as well as the elements of the remuneration system that may be so derogated from.