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However, executives below the Board of Management are more directly responsible for specific lines of business or product groups. Likewise, their remuneration is more closely aligned with their specific business, country and/or regional operating environments.
The general objective for all Allianz remuneration structures is to offer competitive reward in terms of components, structures and levels, which allows Allianz to attract, motivate and retain high-performing employees without encouraging excessive risk-taking.
Remuneration structures and incentives are designed to encourage sustainable value-creating activities for Allianz. As a result, we deploy different remuneration structures and strategies across the Group which take into account the particular roles of executives, business activities and local remuneration and regulatory environments. The key additional principles of our executive remuneration strategy are to:
Allianz operates an effective system of Compensation Committees of major global entities and global lines of business. They periodically review and decide on remuneration guidelines and practices below the Board of Management. Based on the specific nature, scale and scope of each business the Board of Management has defined the appropriate level of Compensation Committee oversight.
The Group Compensation Committee (GCC) oversees the design, governance and operation of the group-wide compensation system, plans and their further development. The GCC monitors the AZ Group’s compensation system’s compliance with the relevant regulatory law. It ensures the appropriateness of Allianz Global and Senior Executive’s compensation system and monitors the implementation of itsdecisions. It has the direct responsibility for package of the Allianz Global Executives and risk takers compensation packages.
The membership of the GCC is approved by the Allianz SE Board of Management and reflects the nature of the principal Allianz businesses and the breadth and depth of expertise required for Group oversight to comply with the applicable regulation. Cross-representation on different committees (i.e. Compensation, Risk, Finance and Capital Committees) supports effective information flow.
The responsibilities of Compensation Committees below the GCC level are similar regarding compensation systems and oversight of their respective/relevant executives. Local Compensation Committees are typically comprised of regional Chief Executive Officers, Business Division Heads, Chief Financial Officers or Chief Operating Officers, a representative of the legal and/or compliance function and the Head of Human Resources.
Allianz’s global governance frameworks as set out in the Allianz Group Remuneration Policy are centrally managed. This ensures global consistency and allows for timely updates to reflect changing business needs and evolving regulatory requirements. It also supports continuous improvement in sustainable reward and performance management and exemplary governance principles.
Allianz conducted its annual remuneration risk assessment to confirm that the remuneration structures for senior executives were appropriate to their role, transparent and aligned with the sustainable development principles of the company. The aim of this review was to develop recommendations for improving risk mitigation and aligning pay with performance and, ultimately, to confirm compliance with regulation. The results of these analyses were incorporated in the internal Compensation Report to the Board of Management.
The primary model is that of the Allianz insurance businesses. Most senior executives are covered by the Allianz Sustained Performance Plan (ASPP). The model provides for a balance of fixed and variable remuneration components with a stronger focus on the longer-term realization of results in determining the final value of total remuneration. For the majority of businesses the following components set the remuneration structure for senior executives to comply with applicable regulations with some individual variations in the mix of components:
Base salary is the fixed remuneration component. Annual adjustments also take account of sustained performance in the position, the performance of the company, general economic and compensation market conditions. The proportion of the fixed component within total remuneration is designed to balance performance incentives to avoid excessive risk-taking. Base salary is expressed as an annual cash sum paid in monthly installments.
Variable remuneration is designed to encourage and reward achievement of both annual performance goals and the sustainable success of the Group and local companies. It is structured to align with Allianz’s risk positioning strategy and to reward personal contributions. Annual targets, both quantitative and qualitative are set and communicated in advance of the performance period and generally conform with SMART (specific, measurable, attainable, relevant and time-bound) principles. In the case of breaches of the Allianz’s Code of Conduct, compliance or other relevant criteria, payout can be reduced partially or in full.
For operations that represent either asset management or alternative investment business for Allianz or third-party assets, incentive programs and remuneration structures are consistent with the risk positions and competitive markets in which they operate. These may deviate from the general Allianz variable remuneration program descriptions and may include profit sharing, co-investment, carry and other cash-based incentive plans. These businesses use appropriate risk control measures. Oversight is performed by their respective Compensation Committees.
Additionally, depending on the specific country or operating entity, Allianz operates a number of pension and flexible benefit plans in particular deferred compensation schemes – which may provide participants with other opportunities to accumulate retirement income.
The Allianz Group Annual Report is available as PDF and in the Allianz Investor Relations App.