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If the performance targets are attained, the ratio between fixed and variable remuneration is approximately one-fourth to three-fourths, based on the mathematical value of the stock- based remuneration at the date of grant. 

The valuation of the stock-based remuneration is merely a mathematically calculated reference value. Whether and when the stock-based remuneration will actually lead to a payment depends on the future development of the share price, the strike price and the date of exercise. Stock appreciation rights (SAR) can be exercised at the earliest upon expiration of a two-year vesting period, for restricted stock units (RSU) the vesting pe- riod is five years. The exercise, the number of rights issued and the development of the value of stock-based remuneration are shown in the income statement and are subject to a detailed an- nual report. 

Variable remuneration and stock-based remuneration together form a three-tier incentive system. 

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In order to ensure a competitive remuneration structure, com- parative market analyses are performed. The insights derived from these studies are incorporated into the design of the remu- neration components. 

The individual remuneration components include: 

Fixed remuneration The amount of the fixed remuneration is, on the one hand, determined by the delegated function or re- sponsibility. On the other hand, it is influenced by external mar- ket conditions. 

Income-equivalent ancillary benefits are also reported as part of fixed remuneration. These benefits vary with the function and position of the recipient and are subject to personal income tax. They essentially include the insurance coverage and pre- ventive health care benefits generally granted in the industry and the use of a company car. 

Variable remuneration This component consists of an annual and a mid-term 3-year bonus, each of which is performance- and suc- cess-related and limited to a maximum amount. Together with 

the stock-based remuneration, they form a three-tier incentive system. Assuming that objectives have been met 100 percent, what is the ratio between fixed and variable remuneration? For the annual bonus, the ratio is approximately 55 to 45 percent; for the annual share of the 3-year bonus, it is approximately 50 to 50 percent. 

Stock-based remuneration This component consists of stock ap- preciation rights (SAR) and restricted stock units (RSU). More detailed information on the stock-based remuneration compo- nents can be found on pages 167 and 168 of this Annual report or on the Internet at www.allianzgroup.com/investor-relations. 

Corporate retirement provision and comparable benefits The pension agreements for members of the Board of Management stipulate retirement benefits of a fixed amount that is not linked to the development of the fixed or variable remuneration com- ponents. The agreements are examined and revised at irregular intervals. If the amount is raised, the reserves must be increased on a pro-rata basis in relation to the number of years of em- ployment. 

