Radford Global Technology Survey Overall … Hewitt Radford Proprietary and Confidential Risk. Reinsurance. Human Resources. Radford Global Technology Survey October 2015 Germany Practices
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Aon Hewitt Radford Proprietary and Confidential
Risk. Reinsurance. Human Resources.
Radford Global Technology Survey
October 2015
Germany
Practices ReportSAMPLE
REPORT
Radford Global Technology Survey (October 2015) Copyright 2015 Aon plc i
Aon Hewitt Radford Proprietary and Confidential
Practices Report
This report contains data from 412 companies with operations in Germany that reported on programs and practices for local national employees (expatriatepractices are excluded). Data for certain practices (as indicated) is limited to companies which are headquartered in Germany. A data sample of three or morecompanies is required for results to be shown for a specific data element.
Table of Contents
October 2015Germany
Section One: Variable Bonus/Incentive Compensation Programs Types of Bonus/Incentive Compensation Plans 1Formal Bonus Plan Eligibility 2Formal Bonus Plan Participation 2Formal Bonus Plan Payment 3Formal Bonus Plan Company Performance Metrics 4Formal Bonus Plan Funding Levels 5Cash Profit Sharing Eligibility and Company Performance Metrics 9Cash Profit Sharing Payment 10Discretionary Bonus Plan Participation 11Discretionary Bonus Payment 11Total Variable Bonus/Incentive Compensation Payments 12
Section Two: Car Plans and Allowances Types of Car Plans 13Participation in Car Plan 14Other Allowances/Cash Payments 15
Section Three: Pay Practices and Organization Measurements Base Salary Structures 16
Establishing Rates of Pay 18Shift Differential Pay Policies 19New University Graduate Program 21Span of Control 22
17Salary Structure Adjustment Percentage
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Practices Report
Table of Contents (continued)
October 2015Germany
Section Four: Equity/Long Term Incentive Programs Types of Equity/Long Term Incentive Programs 23Equity/LTI Eligibility - Overall Summary 25Equity/LTI Eligibility - By Type of Plan 26Percent Employees Receiving Equity Grant 29Size of Equity/LTI Grants Compared to Headquarters Country 30Stock Option Vesting Schedule 31Restricted Stock/Units Vesting Basis 32Restricted Stock/Units Vesting Schedule 33Employee Stock Purchase Plan (ESPP) Provisions 34
Definitions
Participant List 37
35
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Section One: Variable Bonus/Incentive Compensation Programs
Types of Bonus/Incentive Compensation Plans
Companies with bonus/incentive compensation plan covering local nationals inGermany (excluding sales incentive plans)Yes
% Companies
91.5% 377
No
Formal bonus
Discretionary bonus
Cash profit sharing
Other
Plan combinations:
8.5% 35
87.3% 329
33.7% 127
13.0% 49
Company Count
Types of plans (% companies = of those with any plan)
Cash profit sharing only
Formal bonus + discretionary bonus
Formal bonus + cash profit sharing
Discretionary bonus + cash profit sharing
Formal bonus + discretionary bonus + cash profit sharing
Formal bonus only
Discretionary bonus only
0.3% 1
57.3% 216
10.9%
1.1%
41
4
18.6% 70
7.7% 29
0.5%
3.7%
2
14
Types of Bonus/Incentive Compensation Plans
Germany
- See plan definitions at end of report.
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Section One: Variable Bonus/Incentive Compensation Programs (continued)
Formal Bonus Plan Eligibility
Employee levels eligible to participate in formal bonus plan
Executive (VP and above)
% Companies
100.0% 329
Management:
Manager (Radford M3/M4)
Supervisor (Radford M1/M2)
Professional Individual Contributor:
Expert/Principal (Radford P5/P6)
Career/Advanced (Radford P3/P4)
99.1% 326
93.9% 309
83.3% 274
Company Count
Director (Radford M5/M6)
Support Individual Contributor
Entry/Developing (Radford P1/P2)
92.1% 303
83.3%
75.4%
274
248
65.0% 214
Formal Bonus Plan Eligibility
Germany
% Companies Company Count
Yes No
0.0% 0
0.9% 3
6.1% 20
16.7% 55
7.9% 26
16.7%
24.6%
55
81
35.0% 115
Formal Bonus Plan Participation - Data is presented below for companies that are headquartered in Germany.
Percentage of total non-sales employees typically receiving an award when formalbonuses are paid
25thCompany Count
% employees globally (includes Germany)
75th 50th
Percentile
97.5% 95.0%
95.0% 80.0%
47.0% 7
43.0% 7
% employees in Germany
% Employees Receiving Formal Bonus(for companies headquartered in Germany) Average
69.6%
66.6%
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Section One: Variable Bonus/Incentive Compensation Programs (continued)
Formal Bonus Plan Payment
Formal bonus plan payments made last year
Yes
% Companies
88.9% 288
95.3% 303
4.7% 15
Company Count
74.1% 206
12.9%
12.9%
36
36
66.0% 214
Formal Bonus Plan Payment and Frequency
Germany
No
Formal bonus plan payments expected to be made this year
Yes
No
If yes, size of total payments expected this year compared to last year:
Similar
Larger
Smaller
Typical payment frequency
Annual
Semiannual
Other
Quarterly
11.1% 36
17.6% 57
14.8%
1.5%
48
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Section One: Variable Bonus/Incentive Compensation Programs (continued)
Formal Bonus Plan Company Performance Metrics
Germany
- Data is presented below for companies that are headquartered in Germany.
Company performance metrics used to determine total amount of bonuses paidunder formal bonus plan
% Companies
16.7% 1
Company Count
50.0% 3
83.3%
16.7%
5
1
0.0% 0
Company Performance Metrics(for companies headquartered in Germany)
One measure used
Two measures used
Three or more measures used
Measures (more than one can apply):
Sales/revenue level or growth
Profit/income
New product introduction/development
Combinations:
Sales/revenue only
Measure(s) other than sales/revenue or profit/income only
Profit/income only
66.7% 4
0.0% 0
16.7%
50.0%
1
3
Customer satisfaction
Quality
Achievement of other specific non-financial company objectives
Sales/revenue + profit/income
Sales/revenue + profit/income + other measure(s)
Sales/revenue + measure(s) other than profit/income
Profit/income + measure(s) other than sales/revenue
16.7% 1
16.7% 1
16.7%
33.3%
1
2
0.0% 0
33.3%
0.0%
2
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Section One: Variable Bonus/Incentive Compensation Programs (continued)
Formal Bonus Plan Funding Levels
Germany
- Data is presented below for companies that are headquartered in Germany.
Companies with minimum level of company performance required before any money isallocated to the formal bonus plan pool
% Companies
42.9% 3
Company Count
33.3% 1
0.0% 0
Minimum Performance Level(for companies headquartered in Germany)
Yes
No (no threshold)
Minimum (threshold) level of company performance required, as % achievement ofcompany objectives Average % =
Distribution of minimums, as % achievement of company objectives:
100%
80%
71-79%
61-69%
70%
57.1% 4
33.3% 1
0.0%
0.0%
0
0
91-99%
90%
81-89%
60%
Under 50%
51-59%
50%
0.0% 0
0.0%
0.0%
0
0
0.0% 0
0.0%
0.0%
0
0
83.3%
33.3% 1
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Section One: Variable Bonus/Incentive Compensation Programs (continued)
Formal Bonus Plan Funding Levels (continued)
Germany
- Data is presented below for companies that are headquartered in Germany.
Minimum Company Performance Level, as % Achievement of Company Objectives(company count)
50%
0
0
Minimum Performance Level(for companies headquartered in Germany)
Percentage of targeted bonus pool that is available when minimum level of companyperformance is achieved Average % =
Distribution of target bonus pool funding percentages if minimum performance level achieved:
100%
80%
71-79%
61-69%
70% 0
0
0
91-99%
90%
81-89%
60%
Under 50%
51-59%
50%
0
0
0
0
0
0
56.7%
0
70%90%
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
80%
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Section One: Variable Bonus/Incentive Compensation Programs (continued)
Formal Bonus Plan Funding Levels (continued)
Germany
- Data is presented below for companies that are headquartered in Germany.
Companies with a maximum level of company performance beyond which no additionalfunds are added to the formal bonus plan pool
% Companies
57.1% 4
Company Count
25.0% 1
0.0% 0
Maximum Performance Level(for companies headquartered in Germany)
Yes
No (no maximum)
Maximum level of company performance, as % achievement of company objectives
Average % =
Distribution of maximums, as % achievement of company objectives:
Over 200%
126-149%
125%
120%
121-124%
42.9% 3
0.0% 0
0.0%
25.0%
0
1
200%
151-199%
150%
111-119%
100%
110%
101-109%
25.0% 1
0.0%
0.0%
0
0
0.0% 0
0.0%
25.0%
0
1
166.3%
0.0% 0
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Section One: Variable Bonus/Incentive Compensation Programs (continued
Formal Bonus Plan Funding Levels (continued)
Germany
- Data is presented below for companies that are headquartered in Germany.
Maximum Company Performance Level, as % Achievement of Company Objectives(company count)Maximum Performance Level
(for companies headquartered in Germany)
Percentage of target bonus pool that is available when maximum level of companyperformance is achieved Average % =
Distribution of target bonus pool funding percentages if maximum performance level achieved:
167.5%
120%125%200%
0
0
0
0
0
1
0
0
0
0
0
0
Over 200%
126-149%
125%
120%
121-124%
200%
151-199%
150%
111-119%
100%
110%
101-109%
150% 110%
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
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Section One: Variable Bonus/Incentive Compensation Programs (continued)
Cash Profit Sharing Eligibility and Company Performance Metrics
Germany
- Data is presented below for companies that are headquartered in Germany.
Companies with all employees eligible to participate in the company's cash profitsharing plan (after satisfaction of any post-hire waiting period)
% Companies
0.0% 0
Company Count
20.0% 1
20.0%
20.0%
1
1
100.0% 3
Cash Profit Sharing Eligibility and Company Performance Metrics(for companies headquartered in Germany)
Yes
No
If No, employee groups that are excluded (more than one can apply):
Sales incentive plan participants
Formal bonus plan participants
Corporate officers/executives
Other
Two measures used
Three or more measures used
Sales/revenue level or growth
Measures (more than one can apply):
100.0% 3
100.0% 3
0.0%
0.0%
0
0
Company performance metrics used to determine total amount of cash profit sharing
One measure used
Profit/income
Quality
New product introduction/development
Customer satisfaction
40.0% 2
0.0% 0
100.0%
0.0%
3
0
0.0% 0
0.0% 0Achievement of other specific non-financial company objectives
Sales/revenue only
Combinations:
Profit/income only
Measure(s) other than sales/revenue or profit/income only
Sales/revenue + profit/income
0.0%
0.0%
0
0
0.0% 0
100.0% 3
Sales/revenue and/or profit/income + other measures 0.0% 0
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Section One: Variable Bonus/Incentive Compensation Programs (continued)
Cash Profit Sharing Payment
Cash profit sharing payments made for last plan year
Yes
% Companies
75.5% 37
36
Company Count
83.3%
16.7%
40
8
59.2% 29
Cash Profit Sharing Payments Made and Payment Frequency
Germany
No
Cash profit sharing payments as % base salary
Average % =
75th percentile =
50th percentile =
25th percentile =
Annual
Semiannual
Other
Quarterly
24.5% 12
20.4% 10
20.4%
0.0%
10
0
5.8%
7.3%
4.0%
2.9%
Cash profit sharing payments expected to be made for current plan year
Yes
No
Typical payment frequency
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Section One: Variable Bonus/Incentive Compensation Programs (continued)
Discretionary Bonus Plan Participation
Germany
- Data is presented below for companies that are headquartered in Germany.
Percentage of total non-sales employees typically receiving an award over the course ofa year when discretionary bonuses are paid
25thCompany Count
% employees globally (includes Germany)
75th 50th
Percentile
% employees in Germany
% Employees Receiving Discretionary Bonus(for companies headquartered in Germany) Average
Discretionary Bonus Payment
Discretionary bonus payments made for last plan year
Yes
% Companies
80.3% 102
85.0% 108
15.0% 19
Company CountDiscretionary Bonus Payments Made
No
Discretionary bonus payments expected to be made for current plan year
Yes
No
19.7% 25
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Section One: Variable Bonus/Incentive Compensation Programs (continued)
Total Variable Bonus/Incentive Compensation Payments
Germany
- Data is presented below for companies that are headquartered in Germany.- Total variable bonus/incentive compensation payments are payments made to all employees (including executives) under formal bonus plans, cash profit sharing plans, discretionary bonus plans and other variable compensation plans (but excluding sales incentive plans) for performance in the last fiscal year.- Total actual base payroll for the last fiscal year includes base salaries for all employees (including sales employees) whether or not they received a bonus/incentive payment; also includes fixed guaranteed extra months pay, if any (e.g., 13th month, 14th month, etc.); for employees in India, also includes fixed, regularly paid allowances.- Total operating income for the last fiscal year is defined as company earnings before interest and taxes (companies with zero operating income or a loss are excluded).- Global numbers also include employees in Germany.
Germany Employees: Germany total variable bonus/incentive compensation payments as apercentage of:
25thCompany Count
Global operating income
75th 50th
Percentile
13.2% 4Germany base payroll
Total Variable Bonus/Incentive Compensation Payments(for companies headquartered in Germany) Average
14.1%
Global revenue
Global Employees (includes Germany): Global total variable bonus/incentive compensationpayments as a percentage of:
Global operating income
15.6% 12.3% 9.5% 5Global base payroll 13.6%
Global revenue 3 2.4%
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Types of Car Plans
Companies with car plan covering local nationals in Germany (excluding salespersonnel or field engineering (systems/applications engineering) personnel)Yes
% Companies
47.3% 194
No
Company car only
Cash allowance only
52.7% 216
22.7% 44
45.4% 88
32.0% 62
Company Count
Types of car plans (% companies = of those with any plan)
Fuel for private motoring covered
Other operating expenses covered (e.g., maintenance, insurance, repair costs, etc.)
Fuel for private motoring covered
Other operating expenses covered (e.g., maintenance, insurance, repair costs, etc.)
67.0% 71
70.8% 75
39.3% 59
32.7% 49
Types of Car Plans
Germany
Both company car and cash allowance
If company car provided:
If cash allowance provided:
Section Two: Car Plans and Allowances
Company car
Cash allowance
Combinations:
54.6% 106
77.3% 150
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Participation in Car Plan
Germany
Eligible
Car Only Allowance Only Either
If Eligible, Type of Plan
Yes% Cos / # Cos
Employee Levels Eligible to Participate in Car Plan(for companies with a car plan) No
% Cos / # Cos
Executive (VP and above):
56
Management:
Manager (Radford M3/M4)
Supervisor (Radford M1/M2)
Professional Individual Contributor:
Expert/Principal (Radford P5/P6)
Career/Advanced (Radford P3/P4)
59
47
25
Director (Radford M5/M6)
Support Individual Contributor
Entry/Developing (Radford P1/P2)
36
31
12
2
92.8% 180/
90.2% 175/
76.8% 149/
47.9% 93/
63.9% 124/
56.2% 109/
23.2% 45/
9.3% 18/
Other Executives
CEO or Top Executive Officer - Country
59
39
37
31
15
22
20
8
5
37
85
79
71
53
66
58
25
11
80 90.7% 176/
7.2% 14/
9.8% 19/
23.2% 45/
52.1% 101/
36.1% 70/
43.8% 85/
76.8% 149/
90.7% 176/
9.3% 18/
Section Two: Car Plans and Allowances (continued)
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Other Allowances/Cash Payments
Germany
% Cos / # Cos % Cos / # Cos % Cos / # Cos % Cos / # Cos % Cos / # Cos % Cos / # Cos
Yes
No
13.6% 56/
86.4% 356/
Employee Levels Eligible AllowanceProvided All
EmployeesExecutives
OnlyExec + Mgmt
OnlyMgmt + IndivContrib Only
Indiv ContribOnly
Housing allowance
Company provided housing
Housing loan or mortgage subsidy
13.2% 7/
0.0% 0/
0.0% 0/
85.7% 6/
0.0% 0/
0.0% 0/
0.0% 0/
0.0% 0/
0.0% 0/
0.0% 0/
0.0% 0/
0.0% 0/
0.0% 0/
0.0% 0/
0.0% 0/
14.3% 1/
0.0% 0/
0.0% 0/
Meal allowance
Transportation allowance (other than car allowance)
Employee Education Allowance
46.3% 25/
45.3% 24/
3.8% 2/
80.0% 20/
66.7% 16/
100.0% 2/
0.0% 0/
0.0% 0/
0.0% 0/
4.0% 1/
8.3% 2/
0.0% 0/
8.0% 2/
0.0% 0/
0.0% 0/
8.0% 2/
25.0% 6/
0.0% 0/
Other Allowances/Cash Payments
Section Two: Car Plans and Allowances (continued)
Any regular fixed allowances/cash payments (otherthan car allowance) provided to local nationals inGermany (excluding payments that are reimbursementfor actual expenses)
Type of allowance/cash payment (for companiesproviding any allowance)
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Section Three: Pay Practices and Organization Measurements
Base Salary Structures
Germany
Formal salary range midpoints used to help establish typical rates of pay or set minimum and maximum rates of pay for jobs
184
86
130
Base Salary Structures
SupportIndividual Contributor
265
44
100
44.2%
41.7%
58.3%
182
91
127
44.2%
42.4%
57.6%
182
92
125
44.7%
39.8%
60.2%
Co Count% CosCo Count% Cos Co Count% Cos Co Count% Cos
ExecutiveVP and above
Management(Director/Manager/Supervisor)
ProfessionalIndividual Contributor
64.3%
30.6%
69.4%
Yes
No
Salary range midpoints adjusted within last 12 months
Yes
228147 55.8% 230 55.8% 230 55.3% 35.7%
10071 54.4% 98 53.8% 98 54.9% 58.2%
No
Plan to adjust salary range midpoints in next 12 months
Yes
No
8251 45.6% 82 46.2% 84 45.1% 41.8%
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Section Three: Pay Practices and Organization Measurements (continued)
Base Salary Structures (continued)
Germany
Salary Range Midpoints Adjusted in Last 12 Months
71
Salary Structure Adjustment Percentage
SupportIndividual Contributor
32 2.9%
3.5%
2.5%
76 2.7%
3.0%
2.4%
77 3.4%
3.7%
2.6%
Co CountAdjust %Co CountAdjust % Co CountAdjust % Co CountAdjust %
ExecutiveVP and above
Management(Director/Manager/Supervisor)
ProfessionalIndividual Contributor
3.6%
3.0%
2.5%
75th percentile
50th percentile
25th percentile 2.0% 2.0% 2.0% 2.0%
Average adjustment % from prior midpoints (annualized)
Average %
Salary Range Midpoints Planned Adjustment in Next 12 Months
4626 2.9%
3.0%
3.0%
46 2.8%
3.0%
3.0%
48 2.8%
3.0%
3.0%
3.2%
3.0%
3.0%
75th percentile
50th percentile
25th percentile 2.0% 2.0% 2.0% 2.5%
Average adjustment % from prior midpoints (annualized)
Average %
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Section Three: Pay Practices and Organization Measurements (continued)
Establishing Rates of Pay
If traditional salary grade ranges are not used, statement that best describes practicefor establishing rates of payManagers can hire at any rate they choose without guidance from HR
% Companies
1.1% 2
Managers typically seek guidance from HR with each hiring decision
A broadband system is used where several job levels share one wide range; pay is determined on acase-by-case basis and may fall anywhere within the range
Salary ranges exist, but range minimum and maximum figures are not used to formally control ratesof pay
41.3% 76
45.1% 83
4.3% 8
Company Count
Job-specific salary targets or reference points are provided as guidance
Other
6.0% 11
2.2% 4
Establishing Rates of Pay
Germany
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Section Three: Pay Practices and Organization Measurements (continued)
Shift Differential Pay Policies
Extra compensation provided for working a second or third shift
Second shift:
% Companies
Management
2.0% 8
19.1% 78
79.0% 323
Company Count
Yes
Shift Differential Provided
Germany
- Pay policies for second shift (an established work shift that begins after 2 PM/1400 hours) and third shift (an established work shift that begins after 10 PM/2200 hours)
No
NA - no second shift
Individual Contributor
Yes
No
NA - no second shift
6.9% 28
14.2% 58
78.9% 322
Third shift:
Management
2.4% 10
17.6% 72
80.0% 327
Yes
No
NA - no third shift
Individual Contributor
Yes
No
NA - no third shift
5.9% 24
14.2% 58
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Section Three: Pay Practices and Organization Measurements (continued)
Shift Differential Pay Policies (continued)
Amount of extra compensation provided, expressed as a percent of base salary
Second shift:
Management
Germany
- If provided for shift work, extra compensation as a percentage of base salary
Individual Contributor
Third shift:
Management
Individual Contributor
25thCompany Count
75th 50th
Percentile
10.0% 10.0%
10.0% 10.0%
9.0% 7
10.0% 19
Amount of Shift Differential Average
11.1%
12.2%
25.0% 15.0%
15.0% 15.0%
15.0% 9
12.8% 18
17.4%
15.9%
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Section Three: Pay Practices and Organization Measurements (continued)
New University Graduate Program
College Diploma (generally 2 year degree) with field of study in:
Electrical Engineering
Germany
-
-
Software Engineering/Computer Science
Marketing
Finance/Accounting
25thCompany Count
75th 50th
PercentileTypical/Target Annual Base Salaryin EUR Average
Bachelor's (generally 4 year degree) with field of study in:
Electrical Engineering
Software Engineering/Computer Science
Marketing
Finance/Accounting
49563 47375
48500 47250
45542 8
43698 13
47506
45530
49150 45542
46413 43799
42832 7
38841 6
46315
43745
Master's/MBA with field of study in:
Electrical Engineering
Software Engineering/Computer Science
Marketing
Finance/Accounting
53475 46833
53738 46617
45542 7
44024 10
49374
48833
52975 47300
54038 46824
45542 7
42575 6
49298
47541
PhD with field of study in:
Electrical Engineering
Software Engineering/Computer Science
Marketing
Finance/Accounting
53248
52400 45000
4
42887 5
54624
50457
3 46465
The results below pertain to hiring employees in Germany who have recently completed a degree and who have no or limited full-time professional work experience (e.g., lessthan one year experience) at the time of hire.Results reflect current typical or target annualized starting base salary in local currency for Germany (EUR) for new university graduates with the listed degree and field of study.Note: Data presented for graduates from "typical" colleges/universities, rather than graduates of "premium schools" (such as Harvard, Stanford, MIT, etc., in the US).
SAMPLE
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Aon Hewitt Radford Proprietary and Confidential
Radford Global Technology Survey (October 2015) Copyright 2015 Aon plc
Section Three: Pay Practices and Organization Measurements (continued)
Span of Control
Global (includes Germany): Total number of executive/management employees globally aspercent of total global employee headcount
Germany
-
Vice President (or equivalent) and higher
Director/Senior Director (or equivalent)
Manager/Senior Manager (or equivalent)
25thCompany Count
75th 50th
Percentile
2.7% 1.6%
6.2% 5.1%
0.9% 7
2.1% 7
Span of Control(for companies headquartered in Germany) Average
1.9%
4.3%
12.6% 10.8%
1.2% 0.8%
7.3% 7
0.4% 7
9.9%
0.9%Supervisor (or equivalent)
Germany: Total number of executive/management employees in Germany as percent of totalGermany employee headcount
Vice President (or equivalent) and higher
Director/Senior Director (or equivalent)
Manager/Senior Manager (or equivalent)
2.7% 1.3%
5.8% 4.3%
0.8% 7
3.0% 7
1.9%
4.6%
12.6% 10.2%
1.2% 0.8%
6.4% 7
0.0% 7
9.5%
1.3%Supervisor (or equivalent)
Non Germany: Total number of executive/management employees outside Germany as percentof total employee headcount outside Germany
Vice President (or equivalent) and higher
Director/Senior Director (or equivalent)
Manager/Senior Manager (or equivalent)
2.7% 1.2%
5.9% 5.7%
0.9% 7
1.5% 7
2.0%
4.5%
13.4% 9.7%
1.4% 0.5%
7.7% 7
0.0% 7
10.5%
0.7%Supervisor (or equivalent)
Data is presented below for the non-sales employee population (contractors and part-time employees excluded) for companies that are headquartered in Germany.
SAMPLE
REPORT
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Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Section Four: Equity/Long Term Incentive Programs
Types of Equity/Long Term Incentive Programs
Companies with equity/LTI plan covering local nationals in GermanyYes 82.0% 338
No
Stock Options
Restricted Stock/Units (RS/RSU)
Restricted stock only
Restricted stock units only
Both restricted stock and units
18.0% 74
55.6% 188
4.7% 16
63.9% 216
Types of plans (% companies = of those with any plan):
Employee Stock Purchase Plan (ESPP)
Other
Stock Appreciation Rights (SAR)
Long Term Cash Bonus Plan
6.5% 22
3.6% 12
3.6%
35.8%
19
121
0.6% 2
Types of Equity/Long Term Incentive Programs
Germany
- See plan definitions at end of report.
75.1% 254
89.5% 274
10.5% 32
51.1% 140
4.7% 13
75.2% 206
7.3% 20
3.6% 10
4.4%
44.2%
12
121
0.4% 1
87.2% 239
60.4% 64
39.6% 42
75.0% 48
4.7% 3
15.6% 10
3.1% 2
3.1% 2
10.9%
0.0%
7
0
1.6% 1
23.4% 15
% Cos # Cos
All Companies
% Cos # Cos
Public Companies
% Cos # Cos
Private Companies
SAMPLE
REPORT
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Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Section Four: Equity/Long Term Incentive Programs (continued)
Types of Equity/Long Term Incentive Programs (continued)
Plan combinations (excluding ESPP and Other):
One plan:
Options only
32.3% 109
0.6% 2
0.0% 0
2.4% 8
1.5%
0.0%
5
0
Types of Equity/Long Term Incentive Programs
Germany
RS/RSU only
SAR only
Long Term Bonus only
Two plans:
Options + RS/RSU
Options + SAR
Options + Long Term Bonus
RS/RSU + SAR
RS/RSU + Long Term Bonus
SAR + Long Term Bonus
Three plans:
Options + RS/RSU + SAR
Options + RS/RSU + Long Term Bonus
Options + SAR + Long Term Bonus
RS/RSU + SAR + Long Term Bonus
Four plans:
Options + RS/RSU + SAR + Long Term Bonus
0.6% 2
1.2% 4
0.0%
0.0%
0
0
21.1% 71
37.4% 126
0.0% 0
3.0% 10
0.0% 0
31.7% 105
0.6% 2
0.0% 0
1.8% 6
1.5%
0.0%
5
0
0.6% 2
0.9% 3
0.0%
0.0%
0
0
8.5% 28
35.6% 118
0.0% 0
1.2% 4
0.0% 0
1.2% 4
0.0% 0
0.0% 0
0.6% 2
0.0%
0.0%
0
0
0.0% 0
0.3% 1
0.0%
0.0%
0
0
12.9% 43
2.4% 8
0.0% 0
1.8% 6
0.0% 0
% Cos # Cos
All Companies
% Cos # Cos
Public Companies
% Cos # Cos
Private Companies
SAMPLE
REPORT
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Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Section Four: Equity/Long Term Incentive Programs (continued)
Equity/LTI Eligibility - Overall Summary
Germany
- Presented below are the percentage and count of companies with the listed employee level eligible to participate in any kind of equity/LTI plan, including Stock Options, Restricted Stock/Units, SARs, Long Term Cash Bonus, and/or Other Stock/LTI (other than ESPP)
Executive (VP and above)
RS/RSUOnly
2
Management:
Manager (Radford M3/M4)
Supervisor (Radford M1/M2)
Professional Individual Contributor:
Expert/Principal (Radford P5/P6)
Career/Advanced (Radford P3/P4)
2
2
0
Director (Radford M5/M6)
Support Individual Contributor
Entry/Developing (Radford P1/P2)
1
0
0
0
Employee Levels Eligible For AnyEquity/LTI Plan
Both SO+ RS/RSU
SARsLong Term
BonusOther
Stock/LTI
StockOptions
or RS/RSUOptions
Only
Yes% Cos / # Cos
No% Cos / # Cos
If Eligible, Type of PlanEligible
100.0% 335/
96.7% 324/
83.6% 280/
69.0% 231/
83.0% 278/
73.1% 245/
54.9% 184/
42.7% 143/
0.0% 0/
3.3% 11/
16.4% 55/
31.0% 104/
17.0% 57/
26.9% 90/
45.1% 151/
57.3% 192/
325
312
274
227
272
240
182
143
72
73
69
62
65
63
53
44
138
163
158
126
158
139
100
79
115
76
47
39
49
38
29
20
12
10
5
2
5
3
2
2
16
14
10
8
10
8
4
1
Executive (VP and above)
Management:
Manager (Radford M3/M4)
Supervisor (Radford M1/M2)
Professional Individual Contributor:
Expert/Principal (Radford P5/P6)
Career/Advanced (Radford P3/P4)
Director (Radford M5/M6)
Support Individual Contributor
Entry/Developing (Radford P1/P2)
Types of Grants for Which Eligible % Companies
New-Hire Only
Company Count % Companies
Ongoing Only
Company Count % Companies
Both New-Hire and Ongoing
Company Count
2.4% 8
2.2% 7
2.5% 7
4.3% 10
2.9% 8
4.5% 11
8.2% 15
9.1% 13
6.9% 23
12.0% 39
18.2% 51
17.7% 41
16.9% 47
18.0% 44
19.0% 35
19.6% 28
90.7% 304
85.8% 278
79.3% 222
77.9% 180
80.2% 223
77.6% 190
72.8% 134
71.3% 102
If Stock Options or RS/RSU
SAMPLE
REPORT
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Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Section Four: Equity/Long Term Incentive Programs (continued)
Equity/LTI Eligibility - By Type of Plan
Germany
Executive (VP and above)
Management:
Manager (Radford M3/M4)
Supervisor (Radford M1/M2)
Professional Individual Contributor:
Expert/Principal (Radford P5/P6)
Career/Advanced (Radford P3/P4)
Director (Radford M5/M6)
Support Individual Contributor
Entry/Developing (Radford P1/P2)
Employee Levels Eligible by Type of Plan
91.4% 297
86.5% 270
79.2% 217
77.5% 176
80.1% 218
77.5% 186
72.0% 131
71.3% 102
% Cos # Cos % Cos # Cos % Cos # Cos % Cos # Cos % Cos # Cos
Yes No New-Hire Only Ongoing Only Both
Eligible If Eligible, Type of Grant
Stock Options and/or RestrictedStock/Units
6.2% 20
11.2% 35
18.2% 50
18.1% 41
16.9% 46
17.9% 43
19.2% 35
19.6% 28
2.5% 8
2.2% 7
2.6% 7
4.4% 10
2.9% 8
4.6% 11
8.8% 16
9.1% 13
100.0% 325
96.0% 312
84.3% 274
69.8% 227
83.7% 272
73.8% 240
56.0% 182
44.0% 143
0.0% 0
4.0% 13
15.7% 51
30.2% 98
16.3% 53
26.2% 85
44.0% 143
56.0% 182
Stock Options
Executive (VP and above)
Management:
Manager (Radford M3/M4)
Supervisor (Radford M1/M2)
Professional Individual Contributor:
Expert/Principal (Radford P5/P6)
Career/Advanced (Radford P3/P4)
Director (Radford M5/M6)
Support Individual Contributor
Entry/Developing (Radford P1/P2)
89.3% 167
83.9% 125
78.4% 91
78.2% 79
78.9% 90
76.2% 77
73.2% 60
75.0% 48
5.9% 11
10.1% 15
12.9% 15
12.9% 13
13.2% 15
12.9% 13
13.4% 11
9.4% 6
4.8% 9
6.0% 9
8.6% 10
8.9% 9
7.9% 9
10.9% 11
13.4% 11
15.6% 10
100.0% 187
79.7% 149
62.0% 116
54.0% 101
61.0% 114
54.0% 101
43.9% 82
34.2% 64
0.0% 0
20.3% 38
38.0% 71
46.0% 86
39.0% 73
46.0% 86
56.1% 105
65.8% 123
SAMPLE
REPORT
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Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Section Four: Equity/Long Term Incentive Programs (continued)
Equity/LTI Eligibility - By Type of Plan (continued)
Germany
Executive (VP and above)
Management:
Manager (Radford M3/M4)
Supervisor (Radford M1/M2)
Professional Individual Contributor:
Expert/Principal (Radford P5/P6)
Career/Advanced (Radford P3/P4)
Director (Radford M5/M6)
Support Individual Contributor
Entry/Developing (Radford P1/P2)
Employee Levels Eligible by Type of Plan
89.3% 226
84.9% 203
77.6% 159
75.8% 125
78.7% 163
76.3% 135
68.2% 88
67.7% 67
% Cos # Cos % Cos # Cos % Cos # Cos % Cos # Cos % Cos # Cos
Yes No New-Hire Only Ongoing Only Both
Eligible If Eligible, Type of Grant
Restricted Stock/Units
10.3% 26
15.1% 36
22.4% 46
22.4% 37
20.8% 43
22.0% 39
25.6% 33
27.3% 27
0.4% 1
0.0% 0
0.0% 0
1.8% 3
0.5% 1
1.7% 3
6.2% 8
5.1% 5
100.0% 253
94.5% 239
81.0% 205
65.2% 165
81.8% 207
70.0% 177
51.0% 129
39.1% 99
0.0% 0
5.5% 14
19.0% 48
34.8% 88
18.2% 46
30.0% 76
49.0% 124
60.9% 154
Stock Appreciation Rights (SARs)
Executive (VP and above)
Management:
Manager (Radford M3/M4)
Supervisor (Radford M1/M2)
Professional Individual Contributor:
Expert/Principal (Radford P5/P6)
Career/Advanced (Radford P3/P4)
Director (Radford M5/M6)
Support Individual Contributor
Entry/Developing (Radford P1/P2)
66.7% 8
50.0% 5
20.0% 1
20.0% 1
0.0% 0
33.3% 4
50.0% 5
80.0% 4
80.0% 4
100.0% 3
0.0% 0
0.0% 0
0.0% 0
0.0% 0
0.0% 0
100.0% 12
83.3% 10
41.7% 5
16.7% 2
41.7% 5
25.0% 3
16.7% 2
16.7% 2
0.0% 0
16.7% 2
58.3% 7
83.3% 10
58.3% 7
75.0% 9
83.3% 10
83.3% 10
SAMPLE
REPORT
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Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Section Four: Equity/Long Term Incentive Programs (continued)
Equity/LTI Eligibility - By Type of Plan (continued)
Germany
Executive (VP and above)
Management:
Manager (Radford M3/M4)
Supervisor (Radford M1/M2)
Professional Individual Contributor:
Expert/Principal (Radford P5/P6)
Career/Advanced (Radford P3/P4)
Director (Radford M5/M6)
Support Individual Contributor
Entry/Developing (Radford P1/P2)
Employee Levels Eligible by Type of Plan
50.0% 8
50.0% 7
50.0% 5
50.0% 4
50.0% 5
50.0% 4
50.0% 2
% Cos # Cos % Cos # Cos % Cos # Cos % Cos # Cos % Cos # Cos
Yes No New-Hire Only Ongoing Only Both
Eligible If Eligible, Type of Grant
Long Term Cash Bonus
50.0% 8
50.0% 7
50.0% 5
50.0% 4
50.0% 5
50.0% 4
50.0% 2
0.0% 0
0.0% 0
0.0% 0
0.0% 0
0.0% 0
0.0% 0
0.0% 0
88.9% 16
77.8% 14
55.6% 10
44.4% 8
55.6% 10
44.4% 8
22.2% 4
5.6% 1
11.1% 2
22.2% 4
44.4% 8
55.6% 10
44.4% 8
55.6% 10
77.8% 14
94.4% 17
Other Stock/LTI
Executive (VP and above)
Management:
Manager (Radford M3/M4)
Supervisor (Radford M1/M2)
Professional Individual Contributor:
Expert/Principal (Radford P5/P6)
Career/Advanced (Radford P3/P4)
Director (Radford M5/M6)
Support Individual Contributor
Entry/Developing (Radford P1/P2)
SAMPLE
REPORT
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Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Section Four: Equity/Long Term Incentive Programs (continued)
Percent Employees Receiving Equity Grant
Germany
- Data is presented below for companies that are headquartered in Germany.
Percentage of existing (not recently hired) employees that actually received an ongoingequity/LTI grant in the last 12 months
25thCompany Count
% employees globally (includes Germany)
75th 50th
Percentile
3
3
% employees in Germany
% Employees Receiving Equity Grant(for companies headquartered in Germany) Average
52.4%
57.3%
All Equity/LTI Plans combined
% employees globally (includes Germany)
% employees in Germany
Stock Options
% employees globally (includes Germany) 3
% employees in Germany
35.1%
Restricted Stock/Units
SAMPLE
REPORT
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Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Section Four: Equity/Long Term Incentive Programs (continued)
Size of Equity/LTI Grants Compared to Headquarters Country
Germany
- Data is presented below for the size of equity/LTI grants (excluding ESPP) to employees located in Germany expressed as a percentage of grants to peer level positions in each reporting company's headquarter country (100% = same size grant as in headquarters country).- Data limited to companies where peer level positions receive grants in both Germany and headquarters country.- Data excludes companies headquartered in Germany.
New-Hire Grant Size as % HQ
0
Average % (all companies)
50
21
12
14
8
1
0
Size of Equity/LTI Grants in Germanyas % HQ Country
SupportIndividual Contributor
1
176
36
22
30
7
2
0
1
130
46
26
35
11
4
0
1
94
42
26
32
10
5
0
Co Count% HQCo Count% HQ Co Count% HQ Co Count% HQ
ExecutiveVP and above
Management(Director/Manager/Supervisor)
ProfessionalIndividual Contributor
Average % (companies under 100%)
Distribution of % HQ:
Over 100% of HQ country
100% of HQ country
76-99% of HQ country
75% of HQ country
51-74% of HQ country
50% of HQ country
24-49% of HQ country
Under 25% of HQ country
Ongoing Grant Size as of % HQ
Average % (all companies)
Average % (companies under 100%)
Distribution of % HQ:
Over 100% of HQ country
100% of HQ country
76-99% of HQ country
75% of HQ country
51-74% of HQ country
50% of HQ country
24-49% of HQ country
Under 25% of HQ country
106
56
274
97
86.9%
72.4%
253
122
85.1%
72.4%
210
115
85.1%
71.8%
90.7%
73.2%
1
52
20
16
18
7
1
0
0
184
36
24
30
9
2
0
3
149
46
26
37
13
4
0
2
115
45
26
35
11
6
0
115
62
285
101
87.7%
72.2%
278
126
85.9%
71.9%
240
123
85.2%
72.2%
90.4%
72.9%SAMPLE
REPORT
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Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Section Four: Equity/Long Term Incentive Programs (continued)
Stock Option Vesting Schedule
Germany
- Data is presented below for companies that are headquartered in Germany.
Company Count
Stock Option Vesting Schedule(for companies headquartered in Germany)
Typical stock option vesting schedule
Monthly from date of grant
X% after 6 months, then monthly
Quarterly from date of grant
X% after 1 year, then monthly
X% after 1 year, then quarterly
Other
Annually (once a year)
Cliff vesting (all at once)
% CompaniesCompany Count% Companies
0
1
1
0
0
0
0
1
0.0%
33.3%
33.3%
0.0%
0.0%
0.0%
0.0%
33.3%
Ongoing OptionsNew-Hire Options
When stock options typically become fully vested
1 year
3 years
2 years
4 years
Other
5 years
More than 5 years
When stock options expire after grant date
5 years
7 years
6 years
8 years
Other
9 years
10 years
0
0
0
0
0
1
2
0.0%
0.0%
0.0%
0.0%
0.0%
33.3%
66.7%
0
1
0
0
0
2
0
0.0%
33.3%
0.0%
0.0%
0.0%
66.7%
0.0%
SAMPLE
REPORT
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Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Section Four: Equity/Long Term Incentive Programs (continued)
Restricted Stock/Units Vesting Basis
Germany
- Data is presented below for companies that are headquartered in Germany .- Factors that determine vesting of new-hire and/or ongoing restricted stock/units:
Factors used to determine vesting of restricted stock/units(more than one can apply)
Restricted Stock/Units Vesting Basis(for companies headquartered in Germany)
SupportIndividual Contributor
Co Count% CosCo Count% Cos Co Count% Cos Co Count% Cos
ExecutiveVP and above
Management(Director/Manager/Supervisor)
ProfessionalIndividual Contributor
New-hire restricted stock/units
Time-based only
Time-based with performance accelerators
Performance-based with fixed award size
Performance-based with variable award size
1
1
1
33.3%
33.3%
33.3%
1
1
1
33.3%
33.3%
33.3%
Ongoing restricted stock/units
Time-based only
Time-based with performance accelerators
Performance-based with fixed award size
Performance-based with variable award size
1 33.3% 1 33.3%
Time-based only (vests according to established timeframe).Time-based with performance accelerators (achievement can accelerate vesting).Performance-based with fixed award size (e.g., fixed number of shares either vest or don't vest based upon completion of performance objectives).Performance-based with variable potential award size (e.g., degree of performance achievement determines the number of shares the employee receives; often communicatedusing threshold/target/maximum payout schedule).
SAMPLE
REPORT
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Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Section Four: Equity/Long Term Incentive Programs (continued)
Restricted Stock/Units Vesting Schedule
Germany
- Data is presented below for companies that are headquartered in Germany.
Company Count
Restricted Stock/Units Vesting Schedule(for companies headquartered in Germany)
Typical RS/RSU vesting schedule
Monthly from date of grant
X% after 6 months, then monthly
Quarterly from date of grant
X% after 1 year, then monthly
X% after 1 year, then quarterly
Other
Annually (once a year)
Cliff vesting (all at once)
% CompaniesCompany Count% Companies
Ongoing RS/RSUNew-Hire RS/RSU
Length of restriction period before employee is fully vested
1 year
3 years
2 years
4 years
Other
5 years
More than 5 years
Note: Excludes companies where vesting is performance-based only and which do not have a setvesting schedule.
SAMPLE
REPORT
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Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Section Four: Equity/Long Term Incentive Programs (continued)
Employee Stock Purchase Plan (ESPP) Provisions
Germany
- Data is presented below for companies that are headquartered in Germany.
Company CountESPP Provisions (for companies headquartered in Germany)
Yes
Length of "look-back" period
No
% Companies
Over 75%
Typical percentage of eligible employeesparticipating in ESPP
51-75%
Not available
25-50%
Under 25%
ESPP has a "look-back" period (period of timecoincident with offering period during whichparticipant will be provided the lower of the initialoffering price or closing price at the end of theoffering period)
Company CountESPP Provisions (for companies headquartered in Germany)
1 month
3 months
6 months
18 months
12 months
24 months
0% (no discount)
Other
Amount of purchase price discount
% Companies
5%
10%
Other
15%
Length of purchase/offering period (amount of timebetween stock purchases)
3 months
6 months
18 months
12 months
24 months
Other
SAMPLE
REPORT
35
Aon Hewitt Radford Proprietary and Confidential
RADFORD GLOBAL TECHNOLOGY SURVEY (October 2015) Copyright 2015 Aon plc
Definitions
Types of Bonus/Incentive Compensation Plan(s)
Germany
A bonus or incentive plan provides an employee with the opportunity to earn compensation that is not guaranteed and cannot be counted upon from year to year. Variable pay orbonus plans may be formally defined or be very informally organized. Other than sales incentives (which are not considered part of this survey) bonus/incentive plans tend to fallinto one or more of these basic categories:
Formal bonus plans vary widely but generally have established performance expectations. Awards are defined and employees can expect an award if performancecriteria and overall funding thresholds are met. Awards may include a subjective or discretionary component and still be considered a formal plan. Formal bonus plansmay contain individual, team, group, division and/or organization-wide metrics. These plans have identified participants; established performance objectives; and specificbonus determination formulas. A threshold level of organization performance may be required to fund the plan. Target bonus awards are typically established in advance.Most companies have some type of formal bonus plan, even if only for executives.
The defining characteristic of a discretionary bonus program is that the award is not based on pre-established formulas or performance objectives. These awards areused to recognize significant achievement "above and beyond” expectations. Discretionary bonus awards can be formally controlled (with guidelines and approval criteria,budgets, and required minimum organization performance levels) or undefined and coordinated on a case-by-case basis. Typically, only certain employees amongotherwise eligible employees receive discretionary bonus awards. The range of awards may be defined by policy, but potential recipients are typically not aware of specificbonus guidelines.
Cash profit sharing plans use organization-wide metrics, such as profitability or other factors, to determine award amounts. A certain minimum level of organizationperformance may be required before awards are given. Individual participation is automatic if the organization meets performance objectives. The amount of the awardpayment is not based upon individual performance. The incentive is typically a constant percentage of salary/fixed compensation for all participants, a set amount, oradjusted based on factors not related to individual performance, such as salary grade or length of service. Employees participating in formal bonus plans or sales incentiveplans may or may not be participants.
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Definitions (continued)
Types Equity/LTI Plan(s)
Germany
A long-term incentive plan provides an employee with the opportunity to earn compensation based upon performance of the company (typically measured by the value of ownershipin the company through share price) or individual performance over a multi-year time period. Compensation is not guaranteed and future awards cannot be counted upon from yearto year. Equity and Long Term Incentive plans tend to fall into one or more of these basic categories:
Stock Option Plan: A plan under which employees are granted a right (option) to purchase a specified number of shares over a fixed period of time at a preset price.Employees earn compensation by selling the shares of stock at a price above the preset purchase price after a vesting period. Plans of this type are generally considered“appreciation vehicles” since any gain is tied to the increased value of the company’s equity.
Restricted Stock (RS/RSU): A plan under which employees are granted shares of company stock or units that are converted to shares of company stock (without cost orfor a nominal fee) subject to restrictions on the subsequent sale or transfer of the shares. Time-based restrictions are lifted over a period of time (typically 3-5 years)dependent upon continued service. Performance-based restrictions are lifted upon achievement of pre-determined objectives. Performance restrictions may impact whenrestrictions lapse or the number of shares that are released, or both. Restricted Stock plans are sometimes called “full value vehicles” since the entire value of the stock isgiven to the employee (rather than just the gain in value provided in appreciation vehicles).
Stock Appreciation Rights (SARs) Plan: A right to receive, in lieu of the exercise of a stock option, an amount of cash, stock or a combination of both equal to the gain invalue of the shares over a period of time.
Long-Term Cash Bonus Plan: A plan under which incentives are paid based upon the achievement of long-term company performance objectives (e.g., cumulativeprofits before tax, earnings per share). The performance period is typically at least 3 years in length. A long-term plan is different from an annual bonus plan where theaward is paid over a number of years because the performance measurement period is more than one year. Long-term cash bonus plans are different from multi-yearretention plans under which the amount of the cash payment is not variable or performance related.
Employee Stock Purchase Plan: A plan under which participants are granted a right to purchase shares of stock in the company with funds collected over a fixed periodof time at a price based upon an established rule, using money collected through payroll deductions. A limitation is typically placed on the percentage of an employee’sbase pay that can be applied to the purchase.SAMPLE
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