Corporate Governance at ThyssenKrupp

Corporate governance at ThyssenKrupp is focused on responsible long-term value creation and is based on the German Corporate Governance Code. We comply with all recommendations and suggestions of the Code, which was most recently amended on June 18, 2009. Details are provided in the following report.

Corporate Governance Report

The Executive Board – also on behalf of the Supervisory Board – reports in the following on corporate governance at ThyssenKrupp in accordance with section 3.10 of the German Corporate Governance Code:

ThyssenKrupp has always attached great importance to corporate governance. The Executive Board and Supervisory Board are committed to securing the future of the Company and sustainable value creation through responsible corporate governance geared to the long term.

We are convinced that good and transparent corporate governance meeting the requirements of recognized international and national standards is a key factor in business success. Corporate governance is therefore part of how we see ourselves and embraces all areas of the Company. We aim to justify on a sustained basis the trust placed in us by investors, financial markets, business partners, employees and the general public, and continually enhance corporate governance in the Group.

Detailed information on this subject is also available on our website. The current Declaration of Conformity and previous Declarations of Conformity can also be accessed online.

Unqualified Declaration of Conformity again

ThyssenKrupp AG has been complying with all recommendations of the German Corporate Governance Code for years. In the reporting year, the Executive Board and Supervisory Board once again intensively discussed the requirements of the Code, especially the amendments adopted by the Government Commission on the German Corporate Governance Code on June 18, 2009 regarding the composition of the supervisory board and management board compensation. Based on these discussions, on October 01, 2009 the Executive Board and Supervisory Board issued the Declaration of Conformity in accordance with Art. 161 par. 1 of the Stock Corporation Act (AktG), stating that ThyssenKrupp AG complies with all the recommendations of the German Corporate Governance Code as amended on June 18, 2009. The Company also continues to comply with all suggestions of the Code.

ThyssenKrupp also conforms with the new provisions added to the Code concerning D&O insurance for Executive Board and Supervisory Board members and moving from the Executive Board to the Supervisory Board. The new Code recommendations regarding diversity in the composition of Executive Board and Supervisory Board are likewise complied with. Also, stronger emphasis is given to the aspect of independence.

The Code is also implemented at our exchange-listed subsidiary Eisen- und Hüttenwerke AG, taking into account the particularities of its membership in the Group. Individual variances are presented and explained in the Company's Declaration of Conformity of October 01, 2009.

Transparency for stockholders and the general public

Stockholders, analysts, stockholder associations, the media and interested members of the public are kept regularly informed about important recurring dates, such as the date of the Annual General Meeting or the publication dates for our quarterly reports, by a financial calendar which is published in the Annual Report, the quarterly reports and on the Company's website. Our active investor relations work also keeps us in close contact with our stockholders. For example, we hold regular meetings with analysts and institutional investors. An intensive dialogue takes place at analysts' and investors' conferences and in regular conference calls. Separate conference calls are held on topical issues. All the presentations we prepare for these events and also for road shows and investors' meetings are freely accessible on the internet. Video and audio recordings of key events can also be replayed on our website. The venues and dates of road shows and investors' meetings are also available online.

The Annual General Meeting of ThyssenKrupp is always prepared with the aim of providing stockholders with all relevant information at an early stage. In particular we post the Annual Report for the past fiscal year on our website soon after the Supervisory Board meeting at which the annual financial statements are adopted. The invitation to the Annual General Meeting including the agenda and an explanation of the conditions for participation and, for the 2010 Annual General Meeting, of the rights of stockholders is generally issued one-and-a-half months before the date of the Annual General Meeting. All documents and information on the Annual General Meeting are also made available on our website. In addition, there is a facility to address questions to members of our Investor Relations department via an infoline or electronically. We publish the attendance figure and voting results on our website directly after the Annual General Meeting.

Stockholders can exercise their voting rights at the Annual General Meeting in person or by proxy, for which they can authorize a representative of their choice or a company-nominated proxy acting on their instructions. Proxy voting instructions can also be issued to the company-nominated proxy via the internet before and during the Annual General Meeting up to the end of the general debate. Stockholders unable to attend the Annual General Meeting and interested members of the public can view the meeting in full on the internet. The Act Implementing the Shareholders' Rights Directive (ARUG) of July 30, 2009 also creates the legal basis for the exercise of voting rights by postal vote and the exercise of all or individual rights by way of online attendance, even if stockholders are unable to be present at the place of the Annual General Meeting or do not want to authorize someone to vote for them. Regarding implementation of the ARUG Act, the Executive Board and Supervisory Board will propose to the Annual General Meeting that provision be made for this in the Articles of Association.

Cooperation between Executive Board and Supervisory Board in the interest of the Company

The Executive Board and Supervisory Board work together closely in the interest of the Company. Their common goal is to ensure the continued existence of the Company and the sustainable creation of value.

In accordance with statutory requirements ThyssenKrupp AG has a two-tier governance system characterized by a clear separation of management and supervisory functions. Acting in the Company's interest the Executive Board is responsible for managing the Company, developing the Company's strategy, agreeing this strategy with the Supervisory Board and implementing it. The Supervisory Board oversees and advises the Executive Board and is directly involved in decisions that are of fundamental importance for the Company. The Supervisory Board is made up of employee representatives, members elected by the Annual General Meeting, and members designated by the Alfried Krupp von Bohlen und Halbach Foundation. Under the right of designation resolved by the Annual General Meeting of ThyssenKrupp AG in January 2007, the Foundation may designate up to three members to the Supervisory Board, subject to the provisions of the Articles of Association. The designated Supervisory Board members also perform their duties exclusively in the interest of ThyssenKrupp. The Supervisory Board appoints the Executive Board members. Fundamental decisions require its approval.

In accordance with the recommendation of the German Corporate Governance Code, with Dr. Cromme and Dr. Kriwet the Supervisory Board of ThyssenKrupp AG includes no more than two former Executive Board members. In addition, the Supervisory Board verifies the independence of its members. For this, it has established principles for assessing independence which are in line with the requirements of the Code. According to these principles, the majority of the current Supervisory Board members can be regarded as independent, so independent counseling and oversight of the Executive Board is ensured.

The Executive Board provides the Supervisory Board with regular detailed updates on business policy and all issues of relevance to the Company related to planning, business development, the risk situation and the risk management system. Variances between the actual course of business and the Company's plans and targets are explained and the reasons provided. The Executive Board's reports also include the subject of compliance, i.e. the measures in place to ensure adherence to statutory provisions and the Group's internal policies. Under the Articles of Association of ThyssenKrupp AG, important transactions require the approval of the Supervisory Board.

The Company has taken out directors and officers (D&O) liability insurance with an appropriate deductible for all members of the Executive Board. This will be adapted to the requirements of the Law on the Appropriateness of Management Board Remuneration in good time. In accordance with a new recommendation of the German Corporate Governance Code, D&O insurance with an appropriate deductible has also been agreed for the members of the Supervisory Board effective October 01, 2009.

Again this year, the only case of a consultancy or other service contract between members of the Supervisory Board and the Company related to Dr. v. Schenck, who is a member of our Company's Supervisory Board and was until June 30, 2009 a partner in the international law firm Clifford Chance.

Since his retirement as partner he works in an 'of counsel' capacity for this law firm. To the extent that Clifford Chance provided legal advice to the Company in 2008/2009, the engagement was approved by the Supervisory Board Personnel Committee. Conflicts of interest of Executive or Supervisory Board members, which must be disclosed immediately to the Supervisory Board, did not occur.

The period of office of the stockholder representatives elected to the Supervisory Board of ThyssenKrupp AG by the Annual General Meeting ends at the close of the Annual General Meeting on January 21, 2010. The Nomination Committee has submitted proposals for the election of new Supervisory Board members by the Annual General Meeting. In accordance with the German Corporate Governance Code the criteria of independence and diversity were also taken into account and weighed in the interest of the Company. The periods of office of the employee representatives on the Supervisory Board end at the close of the Annual General Meeting resolving on the ratification of the acts of the Supervisory Board in fiscal year 2012/2013.

Appropriate control and risk management system

Good corporate governance involves dealing responsibly with risks. The Executive Board ensures appropriate management and control of risks in the Company. Against the background of the financial and economic crisis, particular attention must be paid to financial risks such as liquidity and default risks. Systematic risk management performed as part of our value-based Group management approach ensures that risks are identified and assessed at an early stage and that risk positions are optimized. The Executive Board keeps the Supervisory Board informed about existing risks and their development. The Audit Committee of the Supervisory Board regularly concerns itself with monitoring of the accounting process, the effectiveness of the internal control, risk management and internal auditing systems as well as monitoring of the auditing of the financial statements. The internal control, risk management and internal auditing systems are continuously evolved and adapted to changing conditions. With the integration of central risk management in the Corporate Center Controlling of ThyssenKrupp AG as part of the reorganization of the Group we expect that planning and reporting processes will improve still further. More details of our control and risk management system can be found under "Risk Report".

Compliance as a key management duty of the Executive Board

Compliance, in the sense of measures to ensure adherence to statutory provisions and internal Company policies and observance of these measures by the Group companies, is a key management duty at ThyssenKrupp. A compliance program was introduced directly after the merger of predecessor companies Thyssen and Krupp in 1999. It has been regularly reviewed and revised as necessary ever since, most recently in October 2009. The Groupwide compliance activities focus on antitrust law and anticorruption policies. The compliance program contains far-reaching measures to ensure adherence to corruption and antitrust regulations and the Group policies based on them.

The Executive Board of ThyssenKrupp AG has unequivocally expressed its rejection of antitrust violations and corruption in the ThyssenKrupp Compliance Commitment. Antitrust violations and corruption are not tolerated in any way and result in sanctions against the persons concerned. All employees are requested to cooperate actively in their areas of responsibility in implementing the compliance program. The Compliance Commitment is supplemented by various Group policy statements and publications which explain the underlying statutory provisions in more detail.

A compliance unit has been set up to develop, manage and implement the program. Key tasks are performed by full-time compliance officers. For example they hold regular training sessions to inform employees about the relevant statutory provisions and internal policies and are available to answer individual questions. More than 6,500 employees have received training worldwide. Particular emphasis was placed on training in countries which may have higher compliance risks. Classroom training sessions are supplemented by Groupwide interactive e-learning programs, which have been completed by approximately 28,000 (anticorruption) and 22,000 (antitrust) employees. As a further compliance element, ThyssenKrupp has introduced a whistleblower hotline. It is run for us by an external law firm. The whistleblower hotline is available to employees of the Group and also third parties to report possible infringements of laws or policies at ThyssenKrupp companies. Here again, the focus is on antitrust violations and corruption. The hotline can be contacted from anywhere in the world and is toll-free.

Further compliance measures relate among other things to capital market law and adherence to the corresponding Group policy. The statutory provisions prohibiting insider dealing are supplemented by an insider policy, which sets out principles for trading in securities of the Company for directors and employees and ensures the requisite transparency. The Group has a long-established clearing office for ad hoc disclosures in which representatives of various specialist departments carry out assessments to identify any matters subject to ad hoc reporting requirements, with a view to ensuring potential inside information is handled in compliance with the law. All persons who need access to inside information to perform their work at ThyssenKrupp AG are entered in an insider register.

High transparency through comprehensive information

To maximize transparency and ensure equal opportunities for everyone, the aim of our corporate communications is to make information available equally to all target groups as soon as possible. Stockholders and potential investors have constant access to the latest developments at the Group on our website, where all press releases and stock exchange (ad hoc) announcements made by ThyssenKrupp AG are published in German and English. The Company's Articles of Association and the Rules of Procedure for the Executive Board, Supervisory Board and Audit Committee can also be viewed on our website, as can the consolidated financial statements, interim reports and details of how ThyssenKrupp implements the recommendations and suggestions of the German Corporate Governance Code.

All stockholders and interested parties can subscribe to an electronic newsletter on the website which reports news from the Group.

Directors' dealings

According to Art. 15a of the Securities Trading Act (WpHG) the members of the Executive Board and Supervisory Board or persons close to them are obligated to disclose the purchase and sale of ThyssenKrupp AG shares and related financial instruments whenever the value of such transactions amounts to €5,000 or more within a calendar year. For the 2008/2009 fiscal year, ThyssenKrupp AG was notified of the following transactions, which – as in the previous year – are also published on our website:

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DIRECTORSʼ DEALINGS 2008/2009

Date Place		Name		Function		Financial instrument		Type of transaction		No. of shares		Price per share *)		Transaction volume
10-01- 2008 XETRA		Dr.-Ing. Ekkehard D. Schulz		Executive Board member		ThyssenKrupp share		Purchase		2,439		€20.50		€49,999.50
10-02-2008 XETRA		Dr.-Ing. Ekkehard D. Schulz		Executive Board member		ThyssenKrupp share		Purchase		2,500		€20.00		€50,000.00
10-06-2008 XETRA		Dr. Ulrich Middelmann		Executive Board member		ThyssenKrupp share		Purchase		5,360		€18.67		€100,071.36
10-06-2008 XETRA		Dr.-Ing. Karl-Ulrich Köhler		Executive Board member		ThyssenKrupp share		Purchase		7,800		€18.81		€146,689.14
10-06-2008 XETRA		Dr.-Ing. Ekkehard D. Schulz		Executive Board member		ThyssenKrupp share		Purchase		2,630		€18.99		€49,943.70
10-13-2008 XETRA		Ralph Labonte		Executive Board member		ThyssenKrupp share		Purchase		5,700		€17.47		€99,554.00
10-16-2008 XETRA		Dr.-Ing. Klaus T. Müller		SupervisoryBoard member		ThyssenKrupp share		Purchase		1,700		€16.08		€27,343.73
10-23-2008 XETRA		Dr. Ulrich Middelmann		Executive Board member		ThyssenKrupp share		Purchase		14,200		€14.08		€199,936.00
10-23-2008 XETRA		Jürgen H. Fechter		Executive Board member		ThyssenKrupp share		Purchase		30,000		€14.65		€439,372.50
10-23-2008 XETRA		Dr.-Ing. Ekkehard D. Schulz		Executive Board member		ThyssenKrupp share		Purchase		6,670		€14.95		€99,689.82
10-24-2008 XETRA		Dr.Olaf Berlien		Executive Board member		ThyssenKrupp share		Purchase		7,250		€13.86		€100,484.99

At September 30, 2009 the total volume of shares in ThyssenKrupp AG held by all Executive and Supervisory Board members was less than 1% of the shares issued by the Company.

Information on other directorships held by Executive Board and Supervisory Board members on supervisory boards or comparable corporate bodies in Germany and elsewhere is contained under "Additional Information". No member of the Executive Board has more than three supervisory board seats at listed companies outside the Group. Details of related party transactions are given in the Notes to the Consolidated Financial Statements.

Financial-statement audit by KPMG

In line with European Union requirements, ThyssenKrupp draws up its consolidated financial statements and quarterly financial statements in accordance with the International Financial Reporting Standards (IFRS). The statutory parent-company financial statements of ThyssenKrupp AG, on which the dividend payment is based, are drawn up in accordance with German GAAP (HGB). For the reporting period we again agreed with the auditors KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin that the Chairman of the Audit Committee would be informed immediately of any possible grounds for exclusion or bias arising during the audit insofar as they are not immediately eliminated, and that the auditors would report immediately on any findings and occurrences during the audit which have a significant bearing on the duties of the Supervisory Board. It was also agreed that the auditors would inform the Supervisory Board or make a note in the audit report of any facts ascertained during their examination which conflict with the Declaration of Conformity issued under Art. 161 Stock Corporation Act (AktG) by the Executive Board and Supervisory Board.

Compensation report

The following compensation report forms part of the management report. Among other things it describes in detail the compensation system for the Executive Board.

Performance-based compensation for the Executive Board

For years we have regarded the transparent and clear presentation of Executive Board compensation as a key element of good corporate governance. The overall compensation paid to Executive Board members comprises the following compensation components: the fixed compensation, the bonus, the Mid Term Incentive plan (MTI) as well as additional benefits (non-cash) and pension plans.

In accordance with the Act on the Appropriateness of Management Remuneration (VorstAG), which came into force on August 05, 2009, and a corresponding provision in the Rules of Procedure for the Supervisory Board, the full Supervisory Board is responsible for determining individual Executive Board compensation following preparation by the Personnel Committee. The German Corporate Governance Code as amended in June 2008 recommends that the full Supervisory Board not only discuss and review the structure of the compensation system but also resolve on the compensation system for the Executive Board including major contractual elements. For this reason, in its meeting on September 05, 2008 the Supervisory Board acting on the proposal of its Personnel Committee resolved the compensation system for the Executive Board including major contractual elements, and at the same time determined to review it regularly.

This was done most recently in the meeting on September 04, 2009. In its review the Supervisory Board established that the compensation system already largely corresponds with the parameters introduced by the VorstAG.

To ensure full conformity with the new legal bases the Supervisory Board further resolved that the compensation system be reviewed again in its details and amended as necessary. This review will require an appropriate amount of time. Discussions must be held both internally and externally with a large number of competent parties. The results of such a thorough review, which must take into account the interests of the stockholders, the Company, and its Executive Board members, were therefore not available when the compensation report was drawn up. A progress report will be given in the Annual General Meeting.

In its meeting on November 26, 2009 the Supervisory Board resolved that the compensation system for the Executive Board be presented for approval at the Annual General Meeting on January 21, 2010. Should the compensation system be amended in fiscal year 2009/2010, it will be presented for approval again at the 2011 Annual General Meeting.

Compensation system for the Executive Board of ThyssenKrupp AG

In the compensation system currently applying, criteria for the appropriateness of Executive Board compensation include the duties of the individual Executive Board member, his/her personal performance, the business situation, the success and prospects of the Company and also the prevailing level of compensation at peer companies and the compensation structure applying in the Company. The performance-related components, consisting of bonus and MTI, contain elements that are measured over several years. They therefore set long-term incentives and focus the compensation structure on the sustainable development of the Company.

Executive Board member contracts concluded since the start of the reporting year make provision for a severance payment in the event of the premature termination of Executive Board activity without cause. Severance payments are limited to a maximum of two years' compensation including benefits (severance payment cap), and compensate no more than the remaining term of office. A promise of payments in the event of premature termination of Executive Board activity resulting from a change of control does not exist.

Regarding the various compensation components: Compensation for Executive Board members comprises non-performance-related and performance-related components. The non-performance-related components are the fixed compensation, additional benefits and pension plans, while the performance-related components are divided into the bonus and the MTI as a component with a long-term incentive effect. In the case of the fixed compensation, the bonus and the MTI the Executive Board Chairman receives a supplement of 65%.

The fixed compensation for an ordinary Executive Board member is €585,000 p. a. and is paid out as basic non-performance-related compensation in monthly installments as a salary. As from the beginning of the reporting year a review takes place regularly every two years. The next review will therefore take place at October 01, 2010.

The Executive Board members also receive additional non-cash benefits mainly comprising the tax value of real property, related incidental costs, insurance premiums and the use of Company cars for private purposes. The Executive Board members are responsible for paying tax on these additional benefits as compensation components. In principle they are available in the same way to all Executive Board members; they vary in amount according to the personal situation of the individual member.

The first element of the performance-related compensation is the bonus. In accordance with the bonus policy resolved by the Supervisory Board, the bonus amount is based equally on the development of the Group's EBT (earnings before taxes) and ROCE (return on capital employed). This means that the bonus as a performance incentive is linked to the performance indicators used in the Group. For example, if EBT is €2 billion and ROCE is 14.5%, the bonus is €1 million. Individual performance can be recognized in an amount up to 20%. Extraordinary events are ignored in determining the bonus. The bonus is paid out to the individual Executive Board members two weeks after its establishment by the Supervisory Board, generally in mid-November.

In addition to the bonus, Executive Board members receive compensation under the MTI as a variable compensation component with a long-term incentive effect. For a certain initial value, which for an ordinary Executive Board member amounts to €150,000, fictional shares are granted. These so-called stock rights are not stock options. The number of stock rights issued to an Executive Board member is determined by the average stock price in the 1st quarter of the performance period. These stock rights are recognized as part of compensation at their value at grant date, calculated in accordance with international accounting standards. More information on the MTI can be found under Note 22. The number of issued stock rights under the MTI is then adjusted at the end of the respective performance period. The basis for this is a comparison of average ThyssenKrupp Value Added (TKVA) in the three-year performance period – beginning October 01 of the fiscal year in which the stock rights were granted – with the average TKVA of the preceding three fiscal years. For every €50 million change in TKVA, the number of stock rights changes by 10%. More information on TKVA can be found in the section "Business management – goals and strategy" of the Annual Report. At the end of the performance period the stock rights awarded are paid out on the basis of the average price of ThyssenKrupp shares in the first three months after the end of the performance period. Payments under the MTI are limited to €1.5 million for an ordinary Executive Board member.

Pensions are paid to former Executive Board members who have either reached pension age, become permanently incapacitated for work or whose employment contract taking into account other income has been prematurely terminated or not renewed. Under the amended provisions now applied, pensions are only paid upon premature termination or non-renewal of employment contracts if the Executive Board member is at least in his/her second five-year period of office and is older than 55. The pension of an Executive Board member is based on a percentage of the final fixed salary component he/she received prior to termination of his/her employment contract. This percentage increases with the duration of the Executive Board member's appointment. In general it is 30% from the start of the first five-year period of appointment, 50% from the start of the second and 60% from the start of the third; the pension of the Executive Board Chairman is 65%. Current pensions are adjusted annually in line with the consumer price index. Under the surviving dependants' benefits plan, a widow receives 60% of the pension (previously 75%) and each dependant child (generally up to the age of 18, maximum age 25 years, in justified exceptional cases up to the age of 27) 20%, up to a maximum of 100% of the pension amount.

Total compensation granted in fiscal year 2008/2009

The following table shows the breakdown of compensation and pensions for individual Executive Board members in the 2008/2009 fiscal year. The prior-year figures are shown in square brackets:

Table: Executive Board compensation 2008/2009

In view of the significant drop in earnings in fiscal year 2008/2009 the Supervisory Board has decided, in line with the bonus policy, not to pay a bonus to the members of the Executive Board of ThyssenKrupp AG.

Total compensation paid to active members of the Executive Board for their work in fiscal year 2008/2009 amounted to €6.5 million (prior year: €19.8 million).

In the year under review, allocations to the pension accruals for active Executive Board members amounted to €3,280,000 (prior year: €3,580,000). The amount for 2008/2009 comprises service costs of €879,000 (prior year: €1,502,000) and interest costs in the amount of €2,401,000 (prior year €2,078,000). Under a no longer valid agreement, two Executive Board members will continue to receive a chauffeur-driven car and specific insurance benefits for a period of five years after entering into retirement on account of their having served on the Executive Board for over ten years. The Company has recognized pension liabilities for the future pension entitlements on the basis of IFRS.

Agreements were reached with Mr. Fechter and Dr. Köhler on the premature amicable termination of their appointments as members of the Executive Board and the cancellation of their contracts of employment at March 31, 2009. In accordance with the severance payment cap included in their contracts of employment, the severance payment due to the two gentlemen was a maximum of two years' compensation. Both gentlemen remained available to the Group in an advisory capacity for six months, i.e. until September 30, 2009, for which they received an advisory fee of €10,000 per month each. In accordance with the general rules for Executive Board members, the pension when payable for both gentlemen was set at 50% of their fixed salary.

No further payments have been promised to any Executive Board members in the event that they leave their post. In the reporting year, no members of the Executive Board received payments or corresponding promises from third parties in connection with their Executive Board positions. As in previous years, no loans or advance payments were granted to members of the Executive Board, nor were any guarantees or other commitments entered into in their favor.

The 4th installment of the MTI was paid out in 2008/2009. The value of this installment was based on the increase in the average TKVA in the three-year performance period 2005/2006 – 2007/2008 against the average TKVA in the three fiscal years 2002/2003 – 2004/2005. In the stated performance period, average TKVA increased significantly from €406 million to €1,845 million; the share price fell from €17.26 at the grant date to €15.82 at the end of the three-year performance period. On this basis, the Executive Board members received the following payments under the 4th installment of the MTI (prior-year figures in brackets): Dr. Schulz €880,000 (€2,715,000), Dr. Middelmann €667,000 (€2,057,000), Dr. Berlien, Mr. Eichler, Mr. Labonte and Dr. Mörsdorf each €533,000 (€1,645,000), Dr. Köhler €533,000 (€1,097,000) and Mr. Fechter €533,000 (€823,000). In addition, the Executive Board members were granted new stock rights at the beginning of January 2009 under the 7th installment of the MTI. Under the 5th to 7th installments of the MTI the Executive Board members also have a total of 161,875 stock rights which have been awarded but are not yet payable.

Total compensation paid to former members of the Executive Board and their surviving dependants amounted to €24.4 million (prior year: €13.7 million). In accordance with IFRS an amount of €173.5 million (prior year: €142.3 million) was accrued for pension obligations benefiting former Executive Board members and their surviving dependants.

Share-based compensation for further executives

Alongside the Executive Board, further selected executives of the Group receive part of their remuneration in the form of share-based compensation. This relates to the MTI and also to a program for the purchase of ThyssenKrupp shares at a discount.

Beginning with the 2nd installment of the MTI, which was issued in August 2004, the group of employees eligible to receive stock rights was expanded on modified terms to include the executive board members of the segment holding companies and other selected executive employees. Due to the decline in TKVA, the MTI for this group of beneficiaries resulted in income from the reversal of the accrued liability for not-yet payable stock rights in the amount of €15.6 million (prior year: expense of €0.2 million).

In addition, there exists for selected executives of the Group who are not beneficiaries of the MTI a discount share purchase plan. The model, first implemented in fiscal year 2005/2006, supplements the variable compensation related to individual company performance with a Group-related element which integrates the central performance indicator TKVA into the incentive system. The aim of this share- and value-based compensation component is to promote concentration on the Group's targets and strengthen executives' identity with the Company.

On expiry of the performance period, beneficiaries are offered the chance to purchase ThyssenKrupp shares up to a fixed euro amount at a discount, which is paid by the employer. The remaining amount is the contribution to be paid by participants. The discount amount depends on the (Group) TKVA over the performance period and can be up to 80%. These shares are subject to a three-year blocking period.

Implementation of the plan resolved for 2007/2008 was postponed to fiscal year 2009/2010. The discount share purchase plan resulted in expense of €3.0 million in the reporting year (prior year: €13.5 million). The plan was not implemented in fiscal year 2008/2009. The Executive Board of ThyssenKrupp AG decides every year on whether to renew the plan.

Appropriate Supervisory Board compensation

The compensation of the Supervisory Board is regulated in Art. 14 of the Articles of Association of ThyssenKrupp AG. It is based on the duties and responsibilities of the Supervisory Board members and on the business situation and performance of the Group.

In addition to reimbursement of their expenses and a meeting attendance fee of €500, Supervisory Board members receive compensation comprising three elements: a fixed component of €50,000 and two performance-related elements. The first is a bonus of €300 for each €0.01 by which the dividend paid out to stockholders for the past fiscal year exceeds €0.10 per share. On top of this, there is an annual compensation, based on the long-term performance of the Company, of €2,000 for each €100 million by which average earnings before taxes (EBT) in the last three fiscal years exceeds €1 billion.

The Chairman receives three times the above fixed compensation, bonus and long-term performance-based component, and the Vice Chairman double these amounts. In accordance with the German Corporate Governance Code, chairmanship and membership of the Supervisory Board committees are compensated separately. Supervisory Board members who only serve on the Supervisory Board for part of the fiscal year receive a proportionally reduced compensation amount. If a Supervisory Board member does not attend a meeting of the full Supervisory Board or a committee meeting, his/her compensation is reduced proportionally.

On the basis of the proposed dividend, members of the Supervisory Board will receive total compensation, including meeting attendance fees, of €1.9 million (prior year: €3.6 million). The individual Supervisory Board members will receive the amounts listed in the following table for the year under review; the corresponding amounts for the previous year are shown in square brackets:

Table: Supervisory Board Compensation 2008/2009

Members of the Supervisory Board of ThyssenKrupp AG will additionally receive compensation of €124,206 (prior year: €223,458) for supervisory board directorships at Group subsidiaries in fiscal 2008/2009. The individual members of the Supervisory Board will receive the amounts shown in the following table:

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COMPENSATION FROM SUPERVISORY BOARD DIRECTORSHIPS WITHIN THE GROUP in €

		2007/2008		2008/2009
Markus Bistram (until Sept. 15, 2009)		87,690		40,109
Theo Frielinghaus		37,718		23,559
Susanne Herberger (from Jan 23, 2009)		—		16,003
Klaus Ix (until Jan. 23, 2009)		32,250		7,524
Bernd Kalwa (from Jan. 23, 2009)		—		12,315
Hüseyin Kavvesoglu (until Jan. 23, 2009)		35,050		6,586
Thomas Schlenz		30,750		17,000
Klaus Wiercimok (from Jan. 23, 2009)		—		1,110
Total		223,458		124,206

Beyond this, as in the previous year Supervisory Board members received no further compensation or benefits in the reporting year for personal services rendered, in particular advisory and mediatory services, with the following exception. The law firm Clifford Chance, in which Supervisory Board member Dr. v. Schenck was a partner until June 30, 2009, and for which he now works in an 'of counsel' capacity, received a total of €79,737 (prior year €89,235) for consultancy services for subsidiaries of ThyssenKrupp in the past fiscal year. As in previous years, no loans or advance payments were granted to members of the Supervisory Board, nor were any guarantees or other commitments entered into in their favor.

Former Supervisory Board members who left the Supervisory Board prior to October 01, 2008 will receive a proportion of the long-term compensation component in the total amount of €3,773 (prior year: €15,683) for the time they served on the Supervisory Board. The breakdown is shown in the following table:

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LONG-TERM COMPENSATION COMPONENT in €
for former Supervisory Board members who resigned before October 01 of the respective fiscal year

		2007/2008		2008/2009
Wolfgang Boczek (until Nov. 30, 2005)		2,256		—
Gerold Vogel (until Dec. 31, 2006)		13,427		612
Prof. Dr. Gang Wan (until Jan.18, 2008)		—		3,161
Total		15,683		3,773

Further information on content in this section

• Corporate Governance
• Speech of Chairman Dr.-Ing. Ekkehard D. Schulz from minute 8:09 (Recording Annual Press Conference on November 27, 2009, German only)