Introduction
As an independent, stock exchange-listed company, Siemens Energy’s Executive Board compensation follows the requirements of the German Stock Corporation Act (AktG) and implements all relevant recommendations of the German Corporate Governance Code.
The Supervisory Board approved the compensation system explained below with effect from October 1, 2024. It has been implemented in the employment contracts with the respective Executive Board members.
The Act Implementing the Second Shareholder Rights Directive (ARUG II) requires that the compensation system for members of the Executive Board be presented to shareholders for approval upon every substantial change, but at least every four years. The compensation system for members of the Executive Board was approved by the Company’s Annual Shareholders’ Meeting on February 20, 2025 with 97.81% of the votes cast (Say on Pay).
Design of the Executive Board’s compensation
Compensation for the Executive Board should be transparent, easy to understand and set clear incentives for sustainable value creation. Further, the compensation system should support Siemens Energy’s strategy, take account of industry-specific conditions, offer a clear link to both individual and collective performance, and align with compensation for executive management and other employees of the company.
A strong focus on performance is established by linking the majority of Executive Board members’ compensation to challenging performance targets. In most cases, over 60% of Siemens Energy Executive Board members’ compensation is variable and therefore “at risk”, meaning that it is tied to the attainment of pre-defined targets and can fall to as little as zero. Of the variable compensation, a majority is granted in the form of long-term equity-based variable compensation (Stock Awards), which each give the recipient the right to receive one share of Siemens Energy stock after a four-year vesting period, depending on the degree to which targets are attained. This ensures that Executive Board members are rewarded for driving the Company’s sustainable development.
For the time in which Siemens Energy can draw guarantees under the Federal Guarantee, there are certain restrictions on the compensation of Executive Board members, which are taken into account in the current compensation system. Specifically, the members of the Executive Board are not granted any variable compensation for the relevant years. After the end of the compensation restrictions, variable compensation components can be granted again. These comprise regular short-term and long-term variable compensation elements as well as temporary compensation, which comprises non-performance-related and performance-related compensation elements. A full description of the compensation system according to the standards set by §87a AktG can be found in the Company’s Notice of Annual Shareholders' Meeting 2025 . Disclosures on the compensation of members of the Executive Board in the previous fiscal year can be found in the Compensation Report for FY2024 which is available for download in the “Compensation Reports” section of the homepage.
Overview of the Compensation System
