The following compensation report is part of the combined management report and of the audited consolidated financial statements.

Compensation System for the Executive Board

The full Supervisory Board, following preparation by the Executive Committee, is responsible for determining the individual compensation paid to members of Wacker Chemie AG’s Executive Board.

In accordance with the Executive Board compensation system in effect since January 1, 2010, the Executive Board’s compensation is comprised of the following key components:

(I) A fixed annual salary:

The fixed annual salary is paid monthly in identical installments.

(II) A variable, performance-related bonus:

The amount of the variable bonus, which is paid annually and retrospectively, depends on the attainment of agreed annual Group targets set by the Supervisory Board for all Executive Board members. The bonus is calculated based on goal achievement in the reporting year, as well as on average overall target attainment for both prior years. The targets are based on the following key indicators: business value contribution, cash flow, target return, and return on capital employed (ROCE). The computational target bonus in the event of 100-percent target attainment during the evaluation period depends on the Executive Board member in question and amounts to either 180 percent or 140 percent of the average annual base salary in the last year of the evaluation period. The maximum bonus, too, depends on the specific Board member and amounts to either 220 percent or 180 percent of the average annual base salary in the last year of the evaluation period. Thus, the Supervisory Board has the discretion to increase or reduce the calculated bonus based on overall recognition of all circumstances, including individual performance, by as much as 30 percent. The Executive Board members are obligated to purchase Wacker Chemie AG shares in the amount of 15 percent of their annual gross bonus. A holding period of two years is in effect for these shares.

(III) A contribution to retirement benefits:

The members of the Executive Board become entitled to the payment of an annual retirement pension should the event insured against occur, i. e. when the member in question reaches retirement age or becomes afflicted by permanent occupational disability. Before the event insured against occurs, Dr. Rudolf Staudigl has a basic entitlement to the premature payment of an annual pension if he leaves the Executive Board against his will without good cause or if he, of his own accord, ceases his activity for good cause, the company being responsible for said cause. The pension sum is calculated in accordance with the last fixed annual salary received and the length of Executive Board membership. A percentage of the base salary is defined as a basic amount and adjusted by means of an annual percentage rate of increase for each year of service. Entitlement to a pension presupposes at least five years of service on the Executive Board.

The company grants the members of the Executive Board appropriate insurance coverage, in particular D&O insurance, with a deductible in accordance with “VorstAG” stipulations.

After all, if they leave the company, the Executive Board members are each subject to a 12-month obligatory waiting period, which is tied to competitive-restriction compensation. The competitive-restriction compensation is calculated on the basis of 50 percent of the most recently received overall annual compensation (average of the last three years). Any pension will be set off against the competitive-restriction compensation.

If Executive Board membership is prematurely terminated without good cause, the contracts with Executive Board members specify that any compensatory payments for Dr. Rudolf Staudigl and Auguste Willems be limited to a maximum of two full annual salaries and, in the case of Dr. Tobias Ohler and Dr. Christian Hartel, a maximum of one full annual salary (severance pay cap).

Total Compensation for the Members of the Executive Board for Fiscal 2015

The current level of each Executive Board member’s compensation is listed in the tables below, which follow the model tables recommended by the German Corporate Governance Code (DCGK).

Dr. Rauhut retired on October 31, 2015 after his employment contract expired as scheduled. Before expiry of his employment contract, Dr. Rauhut had received all compensation due to him under the provisions of this contract. He will receive the agreed competitive-restriction compensation, which will total € 636,548 for the 12 months following his departure (thus € 106,091 on a pro rata basis for 2015).

Dr. Christian Hartel was appointed as a new Executive Board member effective November 1, 2015. He receives a fixed gross annual salary of € 400,000.

The following table shows the value of compensation and benefits granted for fiscal 2015. It also lists minimum and maximum attainable values.

Compensation and Benefits Granted for the Year Under Review

The following table shows the payments for fiscal 2015 from fixed compensation, additional benefits and variable compensation – grouped according to one-year and multiyear variable compensation – as well as pension expenses.

Payments in the Year Under Review

Compensation for Former Executive Board Members and Their Surviving Dependents

Pension Obligations for Executive Board Members

Compensation of Supervisory Board Members

The compensation of Wacker Chemie AG’s Supervisory Board members is governed by the company’s Articles of Association.

In return for their work, the members of the Supervisory Board receive fixed annual compensation in the amount of € 70,000 payable when the fiscal year expires and are additionally refunded any VAT payable on their compensation. Supervisory Board members who join, or depart from, the Supervisory Board during the ongoing fiscal year receive the appropriate pro rata compensation.

The compensation is multiplied by a factor of 3 for the Chairman of the Supervisory Board, by a factor of 2 for the Vice Chairman and for committee chairmen, and by a factor of 1.5 for members of committees. This arrangement does not take account of double and multiple functions.

The members of the Supervisory Board are compensated for any outlays incurred in connection with the execution of their duties with an annual lump sum of € 18,000. They are additionally refunded any VAT payable on their compensation.

The company grants the members of the Supervisory Board appropriate insurance coverage; in particular, the company concludes a D&O insurance policy for the benefit of the Supervisory Board’s members.

Supervisory Board Compensation