Remuneration of the Board of Management

  • Remuneration structure
  • Variable remuneration
  • Other benefits
  • Remuneration 2019

Remuneration of the Board of Management 

The current remuneration system of the Board of Management became effective on January 1, 2019 and was approved by the Annual General Meeting of Allianz SE on May 8, 2019 with a majority of 92.11%.

It supports sustainable performance („Pay for Performance“) and was aligned with the business strategy as well as shareholders’ interests and applicable laws.

With the entry into force of the new version of the German Corporate Governance Code on March 20, 2020, the special severance payment rule for the event of a change of control has been deleted and a deduction clause in the event of a contractually agreed non-competition clause has been introduced. The remuneration system will therefore also comply with the new German Corporate Governance Code.

In order to familiarize yourself extensively with the remuneration system of the Board of Management of Allianz SE, we offer you the following documents in addition to the presentation on this website:

  • Remuneration Report as part of the Annual Report 2019
  • Summary of the Allianz SE board remuneration system

Remuneration structure

Total target direct compensation and remuneration structure

Base salary

The base salary, which is not performance-related, is paid in twelve equal monthly installments.


Perquisites mainly consist of contributions to accident and liability insurances, tax consultant fees (if in the interest of Allianz) and the provision of a company car. Perquisites are not linked to performance; a contractual annual cap applies. Each member of the Board of Management is responsible for paying the income tax due on these perquisites. The Supervisory Board regularly reviews the level of perquisites.

Variable remuneration 

Variable remuneration includes the annual bonus and a long-term incentive (LTI). 
Annual Bonus

Annual Bonus

The annual bonus is based on the achievement of Group financial targets for the respective financial year for which the annual bonus is granted, and adjusted by an individual contribution factor (ICF), taking into account individual and business division performance.

Group financial targets

The Group financial targets are based on equally weighted targets for Group operating profit and Group net income attributable to shareholders. Both key performance indicators (KPIs) are important steering parameters for the Allianz Group. Operating profit highlights the underlying performance of ongoing core operations. Net income attributable to shareholders is the profit after tax and non-controlling interests (minorities). Furthermore, the net income forms the basis for the dividend payout and for the return on equity calculation. The Group financial targets therefore reflect the level of implementation of the Group’s strategy as set by the Board of Management.

Individual contribution factor (ICF)

For each board member, the Group financial target achievement is multiplied by the ICF. The ICF is based on an overall discretionary assessment by the Allianz SE Supervisory Board, as well as on KPIs that take into account the specific area of responsibility of the respective board member and the personal contribution of the board member. It is limited to a range of 0.8 to 1.2.

The ICF takes into account each board member’s individual contribution to the implementation of the business strategy. For board members with business-related division responsibilities, the contribution to the financial performance considers various indicators of profitability (e.g., operating profit and net income) and productivity (e.g., expense ratio) for the respective business division. For board members with a functional focus, quantitative division-specific performance targets are determined based on their key responsibilities. Non-financial targets take into account customer satisfaction (e.g., NPS), employee engagement (e.g., Allianz Engagement Survey) and leader-ship quality, including strategic priorities. The assessment of the individual leadership quality also includes a review of behavioral aspects, such as customer orientation, collaborative leadership, entrepreneurship, and trust (e.g., corporate social responsibility, integrity, diversity as well as sustainability as measured by the reduction of the carbon footprint, the greenhouse gas reduction as well as a step-by-step plan to achieve net-zero compliant asset allocation until 2050, at the latest).

Payout and annual bonus cap 

Following the end of the respective financial year for which the bonus is granted, the annual bonus is settled in cash and may range between zero and 150% of the target amount.

Long-term incentive (LTI)

Long-Term Incentive (LTI)

The long-term share-based compensation component takes the highest share within the variable compensation. It fosters shareholder alignment and takes the implementation of the long-term strategy into account. Furthermore, the company’s long-term development is reflected by the deferred sustainability assessment.

Allianz share performance 

The LTI is granted annually in the form of virtual Allianz shares, so-called restricted stock units (RSUs), with a four-year contractual vesting period. The LTI allocation amount is derived by multiplying the LTI target amount by the annual bonus achievement factor, and capped at 150% of the LTI target level. To determine the number of RSUs to be granted, the LTI allocation amount is divided by the allocation value of an RSU at grant. The RSU allocation value is based on the ten-day-average Xetra closing price of the Allianz stock following the annual financial media conference.1 As RSUs are virtual stock without dividend payments, the relevant share price is reduced by the net present value of the expected future dividend payments during the contractual vesting period. 

1 For accounting purposes, the determination of the fair value of RSUs is based on an option pricing model taking into account additional input parameters, including the term structure of interest rates and the expected relative performance of the Allianz share price compared to the peer index. For the latter, simulation techniques are applied at the valuation date to determine the volatility of the Allianz stock, the volatility of the peer index, their correlation, and the expected dividends. The value of the RSUs used for the board members compensation may deviate from this IFRS value, as a simplified calculation method was applied to increase transparency and traceability.

Relative performance versus peers 

The LTI payout takes Allianz’s relative performance into account:

  • The Allianz SE total shareholder return (TSR) is benchmarked against the TSR of the STOXX Europe 600 insurance index by reflecting the relation of the total performance of the Allianz share (“Allianz TSR”) and the total performance of the STOXX Europe 600 Insurance Performance Index (“Index TSR”) between start and end of the four-year contractual vesting period.
  • In order to avoid incentivizing excessive risk taking, the relative TSR performance factor is limited: It can vary between zero (for underperformance of the index by - 50%-points or lower) and 200% (for outperformance of the index by + 50%-points or higher).
  • The relative TSR performance factor is calculated as follows: Allianz TSR at the end of the contractual vesting period in %-points minus index TSR at the end of the contractual vesting period in %-points, the result times two, plus 100%.
  • Example: 5 %-points outperformance results in a relative performance factor of 110%, 5%-points underperformance results in a relative performance factor of 90%.

Sustainability check

Following the sustainability assessment, the LTI payout amount may be reduced to zero, if the performance of a board member was not deemed sustainable. It compares the development of the annual bonus KPIs in the grant year with the payout year of the LTI, additionally taking into account extraordinary events, the Solvency II ratio, and balance sheet strength.

LTI payout and cap 

Following the end of the four-year contractual vesting period, the RSUs granted are settled in cash based on the ten-day average Xetra closing price of the Allianz SE share following the annual financial media conference in the year the respective RSU plan vests, multiplied by the relative TSR performance factor and adjusted by the sustainability assessment as described above. The payout per RSU is capped at twice the share price at grant. Taking into account the overall compensation cap, the LTI payout, relative to the LTI target, is limited to 255% for the Chairman of the Board of Management and 272% for a regular board member.

Long-term incentive (LTI)

Malus / Clawback

Variable remuneration components may not be paid, or payment may be restricted, in the case of a significant breach of the Allianz Code of Conduct or regulatory Solvency II policies or standards, including risk limits. In the same way, for three years after payout, variable remuneration components already paid may be subject to a clawback.

Additionally, a reduction or cancellation of variable remuneration may occur if the supervisory authority (BaFin) requires this in accordance with its statutory powers.

Overall cap and sensitivity of total compensation

The variable remuneration is designed to help achieve the operational targets and to reward sustainable performance. Therefore, payout of almost two thirds of the annual variable compensation will not occur for a period of four years; such payout is subject to sustainability assessment adjustments. A failure to meet targets may result in a maximum reduction of the variable compensation to zero, with the overall payout being capped:

Compensation sensitivity

New total target direct compensation and remuneration structure

Pension contribution and similar benefits 

To provide competitive and cost-effective retirement and disability benefits, company contributions to the current defined-contribution pension plan “My Allianz Pension” are invested in a fund with a guarantee for the contributions paid, but no further interest guarantee. Each year the Supervisory Board decides whether and to what extent a budget is provided, also taking into account the target pension level. The current pension contribution generally represents 15% of the target compensation of the board members.

Apart from cases of occupational or general disability for medical reasons, the earliest age a pension can be drawn is 62. Should board membership cease before the retirement age is reached, accrued pension rights are maintained if vesting requirements are met.

Members of the Board of Management may have pension entitlements under former pension plans or based on previous positions in the Allianz Group or due to membership of the Board of Management before 2015.

Maximum total compensation (overall cap) 

The sum of variable compensation and base salary payout including pension contributions, which is paid in relation to one financial performance year, will be capped at a maximum amount of 6 mn euros for a regular member of the Board of Management and at 10 mn euros for the Chairman of the Board of Management.

Shareholding requirements and total shareholding exposure

Members of the Board of Management must build share ownership within three years, with the minimum level defined as follows:

  • Chairman of the Board of Management: two times base salary, i.e. 3.412 mn euros,
  • Regular Board of Management member: one time base salary, i.e. 0.975 mn euros.

Holding is required for the entire term of service on the Board of Management. Shares will be acquired through mandatory pay component conversion. The holding obligation ceases with the end of the mandate.

In combination with the virtual shares accumulated through the LTI plan, the Allianz SE Board of Management has significant economic exposure to the Allianz stock: It amounts to approx. 14 mn euros for the Chairman (= 240% of total target direct compensation) and approx. 7 mn euros for a regular board member (= 210% of total target direct compensation).

Termination of service 

Board of Management contracts are limited to a period of five years. For new appointments, based on the recommendation by the German Corporate Governance Code, a shorter period of up to three years is provided. Severance payments made to board members in case of early termination are restricted according to the German Corporate Governance Code.

Severance payment cap 

Payments for early termination to board members with a remaining term of contract of more than two years are capped at twice the annual compensation, consisting of last year’s base salary and 100% of the variable target compensation. If the remaining term of contract is less than two years, the payment is pro-rated for the remaining term of the contract. Contracts do not contain provisions for any other cases of early termination of Board of Management service. In particular, to comply with the recommendation by the German Corporate Governance Code, which became effective on March 20, 2020, severance payments in case of a change of control are discontinued.

Transition payment

Board members appointed before 1 January 2010 are eligible for a transition payment after leaving the Board of Management. The transition payment comprises an amount corresponding to the most recent base salary (paid for a period of six months), plus a one-time payment of 25% of the target variable remuneration at notice date. Where an Allianz pension is immediately payable, such pension is deducted from the monthly transition payments.

Internal and external board appointments 

When a member of the Board of Management simultaneously holds an appointment at another company within the Allianz Group or their joint ventures with outside partners, the full amount of the respective remuneration is transferred to Allianz SE. In recognition of related benefits to the organization and subject to prior approval by the Supervisory Board of Allianz SE, board members are also allowed to accept a limited number of non-executive supervisory roles at appropriate external organizations. In these cases, 50% of the remuneration received is paid to Allianz SE. Only if the Allianz SE Supervisory Board classifies the appointment as a personal one (ad personam), the respective board member will retain the full remuneration for that position. Any remuneration paid by external organizations will be itemized in those organizations’ annual reports; its level will be determined by the governing body of the relevant organization.

Remuneration of the Board of Management 2019

The Remuneration Report is part of the management report of Allianz SE and the group management report, which are published in the respective annual reports of Allianz SE and the Allianz Group.