PERFORMANCE-RELATED PAY AND SOCIAL SECURITY

We use our remuneration structure to provide each employee with incentives for personally implementing DZ BANK’s strategic goals and those of his or her own division. Our standard starting salaries are based on local practice in the countries where our offices are located. Women and men who are of equal merit, who have the same level of experience, and who are doing the same job are paid equally. The remuneration structure at DZ BANK is based on performance, not on gender. Variable components reward the performance of motivated staff. Performance-related pay is one of DZ BANK’s key management tools. The remuneration system of the former WGZ BANK will be continued temporarily and will operate in parallel to the remuneration system of DZ BANK. The introduction of a common and standardized remuneration system is planned for 2018.

We offer our staff a number of employee benefits. These range from a travel allowance or subsidized travel card to group accident insurance and various CPD subsidies. All company benefits are available to full-time and part-time staff.

The most important voluntary benefit provided by DZ BANK continues to be occupational pension provision, which is highly valued by employees. In 2016, nearly 80 percent of employees took the opportunity to pay some of their salary directly into the company pension scheme.

In the current pension scheme, which has been in place since 2004, full-time and part-time employees as well as employees on fixed-term contracts receive contributions to their occupational pension. The contributions made by DZ BANK go into a reinsured occupational pension scheme. If employees choose to make contributions as well, these are paid into a pension fund. DZ BANK will continue to grant direct pension entitlements that are managed by DZ BANK Pension Trust e.V. The pension entitlements of the former WGZ BANK were carried over into the existing system. This means that direct pension entitlements granted by the former WGZ BANK that are not already protected by a reinsurance company will be managed by DZ BANK Pension Trust e.V. Calculated in accordance with the German Commercial Code (HGB), total staff expenses related to pension provision amounted to around €24 million in 2016.

In the reporting year, DZ BANK and the entities in the DZ BANK Group approved the 2014 remuneration strategy of the DZ BANK Group and thereby implemented the regulatory requirements. This also enabled us to achieve the planned level of transparency regarding the remuneration systems within the group entities.

Remuneration for the Board of Managing Directors and and divisional managers

DZ BANK rewards the members of its Board of Managing Directors and divisional managers with a fixed salary plus variable remuneration that is paid over several years. The amount of variable remuneration depends on previously agreed targets being achieved. Of the variable remuneration for members of the Board of Managing Directors and divisional managers, 80 percent is deferred for four years and pegged to the value of DZ BANK’s shares. In this way, we ensure that their remuneration reflects the bank’s long-term performance.

Ethical basis for management remuneration

In a joint policy paper, DZ BANK and four other leading financial institutions pledged in 2013 to structure their management remuneration in accordance with ethical principles. These principles were developed in cooperation with the Wittenberg Center for Global Ethics (WCGE). The aim is to design remuneration systems to be transparent, eliminate misguided incentives, and consider the long-term conditions for lasting success in business. By signing the paper, DZ BANK committed itself to a system of governance that is value-driven and geared to success.

Employee surveys as bellwethers

DZ BANK periodically surveys its staff in order to find out as much as possible about employees’ wishes, expectations, and needs, to identify areas where action needs to be taken, and to initiate any necessary changes. The results of the DZ MeinungsSpiegel are a gauge of staff loyalty and satisfaction, and also provide a basis for division-specific and bank-wide improvements. Such improvements include the introduction of special sales training courses and HR guidelines for managers.

In the second half of 2016, as part of the merger, we conducted an online survey of staff that gave us an initial impression of how employees were feeling about the integration. A further survey is planned for 2017.

Independently of the surveys, employees and managers have a basic entitlement to an annual appraisal and development meeting with their direct line managers. The process is specified in a company-wide agreement. The DZ BANK remuneration system also requires that annual meetings are held for all employees and managers at which target attainment is reviewed and new targets are set.