INFINEON TECHNOLOGIES AG Remuneration Report 2023
Infineon Technologies AG
www.infineon.com
The Remuneration Report explains the principles of the remuneration system for the Management Board and Supervisory Board of Infineon Technologies AG and sets out, on an individual basis, the remuneration awarded or due to current and former members of the Management Board and Supervisory Board in the 2023 fiscal year (1 October 2022 to 30 September 2023) in a clear and understandable manner. It complies with the new requirements stipulated in section 162 of the German Stock Corporation Act (AktG) introduced by the German Act Implementing the Second Shareholder Rights Directive (ARUG II).
In this report, Infineon Technologies AG is also referred to as "the Company" and the Infineon Group is also referred to as "Infineon".
Due to rounding, individual figures in this report may not add up precisely to the totals provided, and the percentages shown may not precisely reflect the absolute values to which they relate.
KPMG Wirtschaftsprüfungsgesellschaft audited the Remuneration Report for compliance with the requirements of section 162, paragraph 3, sentences 1 and 2 of the German Stock Corporation Act (AktG), as well as for its content, and issued its unqualified audit opinion thereon.
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Contents
2 Review of the 2023 fiscal year
2 Successful 2023 fiscal year
2 Changes in the composition of the Management Board and Supervisory Board 2 Adjustments to the remuneration system for the Management Board
3 Management Board remuneration
3 Remuneration system
3 Determining the remuneration
3 Strategic approach and appropriateness of the remuneration 4 Remuneration structure and components,
target/minimum/maximum remuneration
9 Variable remuneration in the 2023 fiscal year
9 Short-term variable remuneration (Short-Term Incentive, STI) 12 Long-term variable remuneration (Long-Term Incentive, LTI)
18 Commitments to Management Board members
upon termination of their Board activities
- Benefits and pension entitlements in the 2023 fiscal year
- Remuneration awarded or due in the 2023 fiscal year
- Active members of the Management Board
- Former members of the Management Board
- Other information
23 Supervisory Board remuneration
- Remuneration structure and components
- Remuneration awarded or due in the 2023 fiscal year
- Comparative review of remuneration trends and Infineon's earnings performance
- Independent auditor's report
Infineon Technologies AG| Remuneration Report 2023
Review of the 2023 fiscal year
Review of the 2023 fiscal year
Successful 2023 fiscal year
In line with the principle enshrined in the remuneration system that excellent performance should be appropriately rewarded and failure to meet targets should result in a significant reduction in remuneration (the "pay for performance" principle), the successful 2023 fiscal year - despite an ongoing challenging environment - is reflected in the variable remuneration of the Management Board. Not only financial success but also sustainability aspects are considered. The remuneration of the Management Board members is therefore also aligned with the interests of the shareholders and other stakeholders.
Changes in the composition of the Management Board and Supervisory Board
There were no changes in the composition of the Management Board in the 2023 fiscal year.
On 18 October 2023, Constanze Hufenbecher resigned from her position as a member of the Management Board with effect from the end of 31 October 2023; her employment contract ends as scheduled at the end of 14 April 2024. As Constanze Hufenbecher's successor, the Supervisory Board appointed Elke Reichart on 18 October 2023 as a new member of the Management Board with effect from 1 November 2023 and until 31 October 2026.
The following changes were made to the composition of the Supervisory Board:
Géraldine Picaud resigned from her position on Infineon's Supervisory Board with effect from the end of 2 February 2023. On 19 April 2023, the Munich Local Court (commercial register) resolved to appoint Ute Wolf as a new member of the Supervisory Board for a limited period of time until the Company's next Annual General
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Meeting in February 2024. Ute Wolf also succeeds Géraldine Picaud on the Supervisory Board's Investment, Finance and Audit Committee.
With effect from the end of the Annual General Meeting held on 16 February 2023, Dr. Wolfgang Eder resigned both as a member and as Chairman of Infineon's Super visory Board. Dr. Herbert Diess was elected by the Annual General Meeting as a new member of the Supervisory Board until the end of the Annual General Meeting 2027. At the meeting it held following the Annual General Meeting 2023, the Supervisory Board elected Dr. Herbert Diess as its Chairman.
Hans-Ulrich Holdenried also resigned from his position on the Supervisory Board with effect from the end of the Annual General Meeting held on 16 February 2023. Klaus Helmrich was elected by the Annual General Meeting as a new member of the Supervisory Board until the end of the Annual General Meeting 2027.
Adjustments to the remuneration system for the Management Board
On 25 November 2022, on the recommendation of its Executive Committee, the Supervisory Board resolved to make changes to the remuneration system for Management Board members, which the Annual General Meeting had last approved on 25 February
2021. The main changes were as follows:
- The framework for the variable portion of the Management Board remuneration was expanded in line with the market and linked even more closely with the success of the business ("pay for performance").
- Scope was provided to raise the level of remuneration of Management Board mem- bers who have served on the Infineon Management Board for longer than four years, again in line with the market, resulting in the maximum remuneration for such Board members increasing from €4.2 million to €5.3 million for a full Management Board member and from €7.2 million to €9.2 million for the Chief Executive Officer.
Infineon Technologies AG| Remuneration Report 2023
Review of the 2023 fiscal year | Management Board remuneration
- The modifier applied to date to the target achievement relating to the short-term variable remuneration (Short-Term Incentive, STI) was restricted in compliance with the adjustment options set out in the German Stock Corporation Act (AktG) and German Corporate Governance Code. In the future, the target achievement can only be reduced or increased by a factor of 0.7 to 1.3 in exceptional cases, i.e., when unplanned extraordinary developments occur. An adjustment in each fiscal year based on specific modifier criteria determined by the Supervisory Board will therefore no longer be applied. In the view of the Supervisory Board, the financial and non-financial performance criteria for the STI and for the long-term variable remuneration component LTI (Long-Term Incentive) are sufficient and appropriate for performance assessment.
- Finally, the Supervisory Board created the option of increasing the weighting of the ESG targets as part of the LTI from the previous figure of 20 percent to 30 percent, thus taking greater account of sustainability considerations.
The revised Management Board remuneration system was approved by the Annual General Meeting held on 16 February 2023 with a majority of 87.70 percent. It was thereupon implemented in all current Management Board employment contracts with effect from 1 October 2022 and, in the case of the adjustment made to the STI modifier, with effect from 1 October 2023.
The Management Board remuneration system decided upon by the Supervisory Board on 20 November 2020 and approved by the Annual General Meeting on 25 February 2021 in accordance with section 120a of the German Stock Corporation Act (AktG) is referred to below as the "2020 Remuneration System", while the Management Board remuneration system amended by the Supervisory Board on 25 November 2022 and approved by the Annual General Meeting on 16 February 2023 is referred to below as the "2022 Remuneration System".
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Management Board remuneration
Remuneration system
Determining the remuneration
The remuneration system for the Management Board (including the remuneration of individual Management Board members) is determined by the Supervisory Board on the recommendation of the Executive Committee and is reviewed on a regular basis.
The 2022 Remuneration System has applied in full since 1 October 2022 or, in the case of the STI modifier, since 1 October 2023. The previous remuneration systems will continue to apply for a transitional period with respect to the tranches in the Mid-Term Incentive (MTI) and Long-Term Incentive (LTI) schemes that were still outstanding when the new remuneration systems were established.
The main components of the remuneration system are described below. A more detailed description of the remuneration system can also be found on Infineon's website.
www.infineon.com/management-board-remuneration-system
Strategic approach and appropriateness of the remuneration
In accordance with legal requirements and the recommendations of the German Corporate Governance Code (DCGK), the remuneration of the Management Board members is intended to reflect the typical level and structure of management board remuneration at comparable companies as well as Infineon's economic position and future prospects. Other aspects to be taken into account are the duties, responsibilities and performance of each individual Management Board member and Infineon's wider pay structure. The relationship between Management Board remuneration and the remuneration of senior management and of the workforce as a whole is con- sidered, including changes over time.
Infineon Technologies AG| Remuneration Report 2023
Management Board remuneration
The remuneration structure is to be oriented towards the promotion of a sustainable and long-term development of the Company. The level of remuneration should contribute towards Infineon's business strategy and long-term development, with a cap in place in the event of extraordinary developments. The Company sets remuneration at a level that is competitive both nationally and internationally, with the aim of inspiring and rewarding dedication and success in a dynamic environment.
Strategic approach
The Management Board remuneration system is closely linked with Infineon's strategy and makes a significant contribution to the achievement of its corporate targets. Incorporating Infineon's key performance indicators into the remuneration of the Management Board incentivizes long-term sustainable growth and growing profitability. Account should also be taken of efforts that contribute towards Infineon's strategic, technological and structural development. The review of Infineon's performance in comparison with that of relevant competitors should encourage long-term outperformance for Infineon, while simultaneously uniting the interests of the Management Board more closely with those of the shareholders. At the same time, the Supervisory Board is aware of Infineon's responsibility as part of society. Therefore, non-financial factors, mainly from the areas of Environmental, Social & Governance (ESG), are also relevant for the remuneration of the Management Board.
Appropriateness
To ensure the appropriateness of the Management Board remuneration, the Supervisory Board performs horizontal and vertical comparisons on a regular basis.
Horizontal comparison
The horizontal view involves the comparison of the remuneration of the Management Board of the Company with that of similar companies. The relevant peer group is taken to be the DAX 40 companies.
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Vertical comparison
In addition to the horizontal comparison, a vertical view is also taken. Here, the internal remuneration structure is examined by comparing the remuneration of the Management Board with that of the workforce as a whole in Germany. In addition to the current status, changes in the level of remuneration over time are also considered.
Review of appropriateness
The most recent review of the appropriateness of the Management Board's remuneration system took place in the 2022 fiscal year. This was a review commissioned by the Supervisory Board and conducted by an independent remuneration expert to ensure the system's compliance with legal requirements and objective appropriate- ness. On this occasion, a review was also performed of the target total remuneration of the individual Management Board members. The conclusion of the independent expert's report was that Infineon's remuneration system complied both with the legal requirements and with the recommendations of the German Corporate Governance Code (DCGK). In particular, the report concluded that the variable remuneration was oriented towards the Company's sustainable and long-term development. It also noted that the remuneration of the Management Board was appropriate, although in some areas, the level of remuneration was below normal market rates. When a comparison was made with the market, other companies were also more heavily weighted towards the variable remuneration component. The results presented in the review by the remuneration expert were discussed in detail by the Supervisory Board, which shared the expert's conclusions.
The next review of appropriateness is scheduled to take place in the 2024 fiscal year.
Remuneration structure and components, target/minimum/maximum remuneration
Overview of the remuneration structure and remuneration components
The 2022 Remuneration System comprises the fixed and variable remuneration components presented in the following overview. Fixed remuneration includes the basic annual salary, fringe benefits and the company pension plan. The variable (performance-related) remuneration comprises the one-yearShort-Term Incentive (STI) and the four-yearLong-Term Incentive (LTI).
Infineon Technologies AG| Remuneration Report 2023
Management Board remuneration
Fixed remuneration
Basic annual salary
Fringe benefits
Fixed, non-performance-related remuneration paid in twelve equal monthly installments
Primarily a company car with chauffeur (also for private use), and an allowance for health and nursing care insurance as well as various insurance and general employee benefits
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Other parts of the contract
Malus & clawback | Partial or complete reduction or clawback of variable |
remuneration components | |
› The employment contracts contain malus and clawback provisions | |
that allow variable remuneration components (STI and LTI) already | |
paid out or not yet paid out to be reclaimed or reduced, in particular | |
in the event of compliance violations |
Company pension plan
Variable (performance-related) remuneration
Short-Term Incentive (STI) - short-term variable remuneration
Performance criteria
Modifier (0.7 to 1.3)
Performance period
Limitation/cap
Payment
Long-Term Incentive (LTI) - long-term variable remuneration
Plan type
Performance criteria
Defined contribution plan that provides an annual pension contribution and capital market-oriented interest rate
- 1/3 Return on Capital Employed (RoCE) as planned
- 1/3 Free Cash Flow (FCF) as planned
- 1/3 Segment Result Margin as planned
- Collective performance of the Management Board using specific criteria1
- Extraordinary developments
One year
250 percent of the contractual allocation amount
In cash
Performance Share Plan
- 70-80percent relative Total Shareholder Return (TSR)
- 20-30percent ESG targets
Share Ownership Guidelines (SOG)
Chief Executive Officer (CEO)
Full member of the Board
Accumulation phase
Holding obligation
Maximum remuneration 2
Chief Executive Officer (CEO)
Full member of the Board
Change-of-control clause
Mandatory personal investment in Infineon shares
150 percent of gross basic annual salary
100 percent of gross basic annual salary
Generally five years
Term of the employment contract and two years after termination of the employment contract
Maximum remuneration of the Management Board determined in accordance with section 87a, paragraph 1, no. 1 AktG
(including fringe benefits and expenses for the company pension plans)
€7,200,000 or (after four years) €9,200,000
€4,200,000 or (after four years) €5,300,000
Time-limited right to extraordinary termination in the event of a change of control with limited severance pay regulation
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Management Board members may resign from office and terminate service contracts within a period of 12 months after a change of control becomes known (third party holds at least 50 percent of the voting rights in the Company); they are then entitled to continued payment of their basic annual salary and variable remuneration components until the end of the originally agreed term but for
a maximum of 24 months - Otherwise, no severance payment commitment applies in the event of early termination of the service contract
Performance period
Limitation/cap
Payment
Four years
250 percent of the allocation amount
Generally in shares
- The "collective performance of the Management Board" criterion was withdrawn with effect from 1 October 2023 and was therefore applied for the last time for the reporting year.
- See the section below for the maximum remuneration in the 2022 - 2024 fiscal years, which differs for Management Board members with employment contracts that were applicable at the time the 2020 Remuneration System was introduced, p. 8 ff.
Infineon Technologies AG| Remuneration Report 2023
Management Board remuneration
Target remuneration as well as minimum and maximum remuneration
Target remuneration
The target total remuneration comprises the total fixed remuneration (basic annual salary, fringe benefits and the company pension plan) and the variable remuneration components, which depend on 100 percent target achievement for the STI and LTI (with regard to the contractual allocation amount). The target total remuneration is €4.0 million for the Chief Executive Officer and €2.3 million for full members of the Management Board.
The Chief Executive Officer's basic annual salary comprises 36 percent of his target total remuneration. Fringe benefits comprise 1 percent, while the company pension plan comprises 11 percent of his target total remuneration. The STI comprises 17 percent of his target total remuneration and the LTI 35 percent. This means that, as a proportion of the total, his variable remuneration exceeds his fixed remuneration, in line with the pay-for-performance approach. In addition, by weighting the LTI more heavily than the STI, the focus is on the sustainable and long-term development of Infineon. For full Management Board members, the percentages for the basic salary, STI, LTI and fringe benefits differ by only a few percentage points.
C01 Target total remuneration
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In the 2022, 2023 and 2024 fiscal years, the STI allocation amount for the Management Board members with employment contracts already in place when the 2020 Remuneration System was introduced was temporarily increased in order to compensate for the payout shortfall caused by the abolition of the Mid-Term Incentive (MTI).
The third variable remuneration component, the MTI, was abolished with the intro duction of the 2020 Remuneration System for the Management Board. Prior to this, each fiscal year began with its own new three-year MTI tranche. At the end of the three years, a payment was made in cash. The amount of the payment depended on the results achieved for RoCE and Free Cash Flow in each year of the three-year period. The target values for RoCE and Free Cash Flow for the individual years in an MTI tranche corresponded to the STI targets that had been determined previously each year. To arrive at the MTI amount payable at the end of the three-year period, the arithmetic average of the three annual levels of target achievement needed to be calculated. The MTI tranches still in place at the time the MTI was abolished were terminated at the end of the three-year period, without any further annual tranches being added. The last MTI tranche ended on 30 September 2022 and was paid out in the 2023 fiscal year. The level of target achievement for this MTI tranche, consisting of the annual tranche for the 2020 fiscal year, was 86.9 percent.
In the 2022, 2023 and 2024 fiscal years, the Chief Executive Officer's basic annual salary therefore comprises 34 percent of his target total remuneration. Fringe benefits
€ in millions
Chief Executive Officer
target
Management Board member
target
Basic annual salary | |||||||||||
4.0 | Company | ||||||||||
pension plan & | |||||||||||
36% | 12% | 17% | 35% | ||||||||
fringe benefits | |||||||||||
2.3 | STI | ||||||||||
36% 13% 18% | 33% | LTI | |||||||||
comprise 1 percent and the company pension plan comprises 10 percent of his target total remuneration. The STI comprises 22 percent of his target total remuneration and the LTI 33 percent. This ensures that the proportion of the target total remuner ation comprised by the LTI will always exceed the proportion comprised by the STI. For those full members of the Management Board affected, the percentages for the basic salary, STI, LTI and fringe benefits differ by only a few percentage points.
Once a Board member has completed four years in office, the maximum remuneration increases to €9.2 million for the Chief Executive Officer and to €5.3 million for full Board members. If the Supervisory Board takes advantage of this extended scope, the target total remuneration for the Management Board members affected increases accordingly.
The individual target amounts for the contractually agreed remuneration components in the 2023 and 2022 fiscal years are set out below, together with the relative proportions of the individual remuneration components.
Infineon Technologies AG| Remuneration Report 2023
Management Board remuneration | 7 |
Jochen Hanebeck 1 | Constanze Hufenbecher | Dr. Sven Schneider | |||||||||||||||||||||||||||||||||||||
Chief Executive Officer | Management Board member | Management Board member | |||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||
in € | in % | in € | in % | in € | in % | in € | in % | in € | in % | in € | in % | ||||||||||||||||||||||||||||
Fixed remuneration | |||||||||||||||||||||||||||||||||||||||
Basic annual salary | 1,410,000 | 34 | 1,127,000 | 33 | 844,000 | 36 | 844,000 | 36 | 844,000 | 30 | 844,000 | 33 | |||||||||||||||||||||||||||
Fringe benefits | 45,000 | 1 | 45,000 | 1 | 45,000 | 2 | 45,000 | 2 | 45,000 | 2 | 45,000 | 2 | |||||||||||||||||||||||||||
Total fixed remuneration | 1,455,000 | 35 | 1,172,000 | 34 | 889,000 | 38 | 889,000 | 38 | 889,000 | 32 | 889,000 | 35 | |||||||||||||||||||||||||||
Variable remuneration | |||||||||||||||||||||||||||||||||||||||
Short-term variable remuneration (STI) | 911,667 | 22 | 771,667 | 22 | 405,000 | 18 | 405,000 | 18 | 792,000 | 28 | 655,000 | 25 | |||||||||||||||||||||||||||
Long-term variable remuneration (LTI) | |||||||||||||||||||||||||||||||||||||||
Performance Share Plan | 1,397,000 | 33 | 1,084,500 | 32 | 772,000 | 33 | 772,000 | 33 | 864,000 | 31 | 772,000 | 30 | |||||||||||||||||||||||||||
Total variable remuneration | 2,308,667 | 55 | 1,856,167 | 54 | 1,177,000 | 51 | 1,177,000 | 51 | 1,656,000 | 59 | 1,427,000 | 55 | |||||||||||||||||||||||||||
423,000 | 10 | 253,200 | 11 | 253,200 | 9 | ||||||||||||||||||||||||||||||||||
Company pension scheme | 423,000 | 12 | 253,200 | 11 | 253,200 | 10 | |||||||||||||||||||||||||||||||||
Target total remuneration | 4,186,667 | 100 | 3,451,167 | 100 | 2,319,200 | 100 | 2,319,200 | 100 | 2,798,200 | 100 | 2,569,200 | 100 | |||||||||||||||||||||||||||
Andreas Urschitz | Dr. Rutger Wijburg | ||||||||||||||||||||||||||||||||||||||
Management Board member since 1 June 2022 | Management Board member since 1 April 2022 | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||||||||
in € | in % | in € | in % | in € | in % | in € | in % | ||||||||||||||||||||||||||||||||
Fixed remuneration | |||||||||||||||||||||||||||||||||||||||
Basic annual salary | 844,000 | 36 | 281,333 | 36 | 844,000 | 36 | 422,000 | 36 | |||||||||||||||||||||||||||||||
Fringe benefits | 45,000 | 2 | 15,000 | 2 | 45,000 | 2 | 22,500 | 2 | |||||||||||||||||||||||||||||||
Total fixed remuneration | 889,000 | 38 | 296,333 | 38 | 889,000 | 38 | 444,500 | 38 | |||||||||||||||||||||||||||||||
Variable remuneration | |||||||||||||||||||||||||||||||||||||||
Short-term variable remuneration (STI) | 405,000 | 18 | 135,000 | 18 | 405,000 | 18 | 202,500 | 18 | |||||||||||||||||||||||||||||||
Long-term variable remuneration (LTI) | |||||||||||||||||||||||||||||||||||||||
Performance Share Plan | 772,000 | 33 | 257,333 | 33 | 772,000 | 33 | 386,000 | 33 | |||||||||||||||||||||||||||||||
Total variable remuneration | 1,177,000 | 51 | 392,333 | 51 | 1,177,000 | 51 | 588,500 | 51 | |||||||||||||||||||||||||||||||
253,200 | 11 | 253,200 | 11 | ||||||||||||||||||||||||||||||||||||
Company pension scheme | 84,400 | 11 | 126,600 | 11 | |||||||||||||||||||||||||||||||||||
Target total remuneration | 2,319,200 | 100 | 773,066 | 100 | 2,319,200 | 100 | 1,159,600 | 100 |
1 For Jochen Hanebeck, the target total remuneration was calculated taking into account the remuneration as Management Board member agreed until 31 March 2022 and the remuneration as Chief Executive Officer applicable from 1 April 2022, whereby for the company pension plan for the 2022 fiscal year, only the basic annual salary agreed from 1 April 2022 applied.
Infineon Technologies AG| Remuneration Report 2023
Management Board remuneration
Minimum and maximum remuneration
Both the individual variable remuneration components granted for a fiscal year and the sum of all remuneration components granted to the Management Board members for a fiscal year, including fringe benefits and the company pension plan (total remu- neration), are capped, in each case irrespective of the date they are actually paid.
In accordance with section 87a, paragraph 1, no. 1 of the German Stock Corporation Act (AktG), a maximum sum was determined for the total remuneration that could be achieved in a fiscal year. Consequently, the remuneration for the Chief Executive Officer could not exceed an amount of €7.2 million or, after four years, €9.2 million. For full members of the Management Board the remuneration could not exceed €4.2 million or, after four years, €5.3 million (maximum remuneration).
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For the 2022, 2023 and 2024 fiscal years, as a result of the temporary increase in the STI allocation amount (to compensate for the abolition of the MTI) for employment contracts already in place when the changeover to the 2020 Remuneration System occurred, a maximum remuneration of €8.2 million applies for the Chief Executive Officer and €4.75 million for full members of the Management Board.
The caps on the individual variable remuneration components are set out below in detail. However, compliance with the maximum remuneration for the reporting year can only be verified retrospectively, once the final remuneration component for the reporting year has been paid. For the 2023 fiscal year, the LTI tranche 2023 - 2026 was granted. Its performance period ends on 30 September 2026 and is fulfilled upon completion of the waiting period on 31 March 2027. For this reason, compliance with the rules on maximum remuneration for the 2023 fiscal year can only be reported in the Remuneration Report for the 2027 fiscal year.
Jochen Hanebeck | Constanze Hufenbecher | Dr. Sven Schneider | Andreas Urschitz | Dr. Rutger Wijburg | ||||||||||||||||
Chief Executive Officer | Management Board member | Management Board member | Management Board member | Management Board member | ||||||||||||||||
in € | ||||||||||||||||||||
2023 (min.) | 2023 (cap) | 2023 (min.) | 2023 (cap) | 2023 (min.) | 2023 (cap) | 2023 (min.) | 2023 (cap) | 2023 (min.) | 2023 (cap) | |||||||||||
Variable remuneration | ||||||||||||||||||||
Short-term variable remuneration (STI) | - | 2,279,168 | - | 1,012,500 | - | 1,980,000 | - | 1,012,500 | - | 1,012,500 | ||||||||||
Long-term variable remuneration (LTI) | ||||||||||||||||||||
Performance Share Plan | - | 3,492,500 | - | 1,930,000 | - | 2,160,000 | - | 1,930,000 | - | 1,930,000 |
Infineon Technologies AG| Remuneration Report 2023
Management Board remuneration | 9 |
Variable remuneration in the 2023 fiscal year
Short-term variable remuneration (Short-Term Incentive, STI)
C02 Short-Term Incentive (STI)
Short-Term Incentive (STI)
Performance criteria | Criteria-based modifier | ||||||||||||
Contractual | (Total target achievement 0% - 250%) | (0.7 - 1.3) | STI payment in cash | ||||||||||
× | × | = | |||||||||||
STI allocation | (Cap: 250% of the | ||||||||||||
⅓ | ⅓ | ⅓ | Collective | ||||||||||
amount | + | + | Extraordinary | allocation amount) | |||||||||
RoCE | Free Cash Flow | Segment Result Margin | performance of the | developments | |||||||||
(0% - 250%) | (0% - 250%) | (0% - 250%) | Management Board 1 | ||||||||||
1 From the 2024 fiscal year, the specific performance criteria will no longer apply and only extraordinary developments will be taken into account under the STI modifier.
Performance criteria
The Short-Term Incentive (STI) is intended to reward performance over the fiscal year just ended, reflecting Infineon's recent progress. The relevant equally weighted performance criteria for the STI are Infineon's three financial key performance indicators: Return on Capital Employed (RoCE), Free Cash Flow and Segment Result Margin.
At the beginning of the fiscal year, the Supervisory Board sets the targets for all levels of target achievement up to 250 percent for the three financial performance criteria, which are derived from the annual plan for the Infineon Group. To determine the target achievement in each case, the actual figures disclosed in the relevant approved consolidated financial statements of Infineon Technologies AG are compared with the targets set at the beginning of the fiscal year. The actual levels of target achievement are determined on the basis of the defined targets and target ranges for the relevant performance criterion and may be between 0 percent and 250 percent. If the actual figure is below or equal to the threshold, the level of target achievement is 0 percent. If the actual figure is equal to or above the maximum level, the level of target achievement is 250 percent.
At the end of the relevant fiscal year, the Supervisory Board determines the level of target achievement for each performance criterion. This may be between 0 percent and 250 percent for each performance criterion. The overall target achievement is calculated by adding the equally weighted levels of target achievement for the three performance criteria and may be between 0 percent and 250 percent.
If a Management Board member's employment contract begins or ends during a fiscal year, that member's entitlement to the STI is reduced on a pro rata monthly basis (by one-twelfth for each full month missing from the complete STI tranche). Management Board members are not entitled to receive the STI for the fiscal year in which they resign from the Board (unless this is for good cause, for reasons beyond their control) or if the Management Board member's contract is terminated by the Company for good cause.
The actual payment is made as soon as possible after the determination of the payment amount by the Supervisory Board. However, it should be paid in cash within five months of the end of the fiscal year at the latest.
Infineon Technologies AG| Remuneration Report 2023
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Infineon Technologies AG published this content on 24 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 November 2023 10:07:12 UTC.
