Long Term Incentive Plan (LTI) until FY 2013/14
The Long Term Incentive Plan (LTI) successfully introduced in fiscal year 2010/2011 was renewed for fiscal year 2013/14. It is a Groupwide, global compensation instrument for Executive Board members and other selected executives of the thyssenkrupp Group.
The LTI is a compensation component based on long-term performance. The objective is to strengthen identification with the Group and align compensation towards long-term value generation.
The long-term aspect is based on the LTI's link to thyssenkrupp Value Added (TKVA) and the performance of the share price and the Group over a period of three fiscal years compared with the previous three fiscal years.
Long Term Incentive Plan
The term of the LTI is three fiscal years (performance period).
Allocation of stock rights
At the beginning of the performance period, an initial value in euros is determined for each participant. This initial value is divided by the average price of thyssenkrupp shares in the first quarter of the first fiscal year of the performance period to give the number of stock rights for the participant.
The number of stock rights granted is adjusted at the end of the performance period according to the development of the Group's TKVA. The average TKVA over the performance period is compared with the average TKVA over the previous three fiscal years (comparative period).
For Executive Board members at Group and business area level every €200 million increase in average TKVA increases the number of stock rights by 5%; every €200 million decrease in average TKVA decreases the number of stock rights by 10%.
For the other participants every €200 million increase in average TKVA increases the number of stock rights by 10%; if average TKVA decreases, the number of stock rights decreases accordingly.
The final number of stock rights, adjusted to reflect the change in TKVA, forms the basis for the payout.
The stock rights are paid out in gross amounts after the plan ends based on the average thyssenkrupp share price in the first quarter of the fiscal year following the performance period.
The payout is limited to a maximum of three times the awarded initial value in euros.
Eligible to participate in the plan are Executive Board members and other selected executives of the thyssenkrupp Group worldwide.
A decision on the renewal of and participants in the LTI plan is made each year.