IVG introduces sustainable compensation model for Board

IVG Immobilien has developed a new compensation and incentivisation model based on sustainable and measurable performance, the German listed company announced on Monday. IVG’s Board of Management and Supervisory Board agreed at the end of 2009 that the standardised model will apply not only to members of the Board of Management but also to the Group’s managers.

Under the new model, a certain portion of the bonus payments will be made with a time delay and in the form of company shares. In addition, a long-term performance cash plan will be introduced as an additional compensation component in management contracts. To participate in this plan, it will be compulsory for managers in future to make a personal investment in IVG shares.

IVG’s new compensation model is composed of one fixed and two variable components: the fixed salary component will continue to be in line with market
practice. The first variable component is referred to as STI (short-term incentive). It will be paid out as a bonus which will depend on the achievement of
internally agreed corporate and personal performance targets. Some 50% of the bonus will depend on the achievement of defined Group and divisional performance targets; the other 50% will depend on the achievement of individual or personal targets of the Board members and managers.

The future pay-out method for the bonus is also new. The first half of the bonus (achievement of personal targets) will continue to be paid out in cash annually, while the second half (achievement of corporate performance targets) will in future be paid through IVG shares. In this context, Board members and managers will acquire restricted stock units (RSUs). After a holding period of three years, the RSUs will be converted into genuine IVG shares.

IVG Immobilien AG is a leading real estate company in Europe with assets worth EUR 22.6 bn in 18 selected major German and European cities. The company has 700 employees.