Remuneration structure

The relation of the variable remuneration components to each other is, in accordance with the regulatory provisions, primarily oriented towards the achievement of long-term targets. The ratio of long-term to short-term components in the annual target remuneration depends on the personal investment behavior of the members of the Board of Management under the Share Matching Plan, which means that the relation between the mandatory personal investment and the maximum personal investment varies. This focus ensures that the remuneration structure is aimed at a sustainable and long-term development of the Company and the remuneration of the members of the Board of Management contributes toward supporting the business strategy and the long-term development of the Company. The extent to which the long-term portion exceeds the short-term portion is determined, among other things, by the investment behavior of the members of the Board of Management.

The following illustration shows the relation of the remuneration components without remuneration in kind and other fringe benefits to one another based on the contractually agreed target parameters.

The existing relation of the remuneration components to each other also ensures that the variable remuneration components are primarily invested in Company shares or are based on shares. The Board of Management remuneration system at Deutsche Telekom AG includes both variants. The Share Matching Plan with the existing prior obligation to invest is based on genuine Deutsche Telekom shares. The LTI, which is designed as a phantom share plan, takes into consideration the share price development on the basis of phantom shares that are converted to cash amounts at the end of the plan.

Due to the commitment under the company pension scheme, Timotheus Höttges’ remuneration components have a different mathematical relation to each other, with the share of fixed remuneration components increasing.