B _ Corporate Governance Annual bonus occur if the supervisory authority (BaFin) requires this in accordance The annual bonus provides incentives for profitable growth and with its statutory powers. further developing the operating business by successfully implementing the business objectives for the respective financial year. Payout cap In doing so, the overall responsibility for reaching the Group targets as In accordance with § 87a (1) sentence 2 (1) AktG and the well as the individual performance with regard to the operational recommendations of the German Corporate Governance Code, the responsibilities of the individual members of the Board of Supervisory Board has determined a remuneration cap. Management are taken into consideration. Thus, the actual payout for the underlying financial year, The annual bonus is derived by multiplying the target comprising the base salary, variable remuneration and pension service achievement factor by the target amount for the annual bonus, and is cost, will be capped at maximum € 11,750 thou for the Chairperson of paid out in cash after the end of the relevant financial year, with the Board of Management, and at € 6,000 thou for a regular member payment limited to a maximum of 150 % of the target amount. of the Board of Management. If the remuneration for the financial year exceeds this amount, compliance with the maximum limit will be Long-term incentive – LTI ensured by reducing the payout of the long-term variable The long-term, share-based compensation is oriented mainly towards remuneration accordingly. the sustainable increase in the enterprise value. Taking the share price This payout cap principle was introduced for the first time for the performance in absolute and relative terms as a basis, it encourages financial year 2019. Given that the actual amount of the paid out long- combining the interests of the shareholders with those of the members term variable remuneration cannot be determined until after vesting of the Board of Management. and the final sustainability assessment, compliance with the payout Other stakeholder aspects are taken into consideration by setting cap will be reported on for the first time in the Remuneration Report strategic sustainability targets, whose achievement forms the basis for for the financial year 2024. the final assessment at the end of the four-year contractual vesting period. Deviation from the remuneration system Almost two thirds (64 %) of the variable remuneration is share- The Supervisory Board can deviate temporarily from the remuneration based, so as to adequately reflect the long-term performance of the system in exceptional circumstances in accordance with the statutory company in the Board of Management remuneration. requirements (§ 87a (2) AktG), if this is necessary in the interests of the long-term welfare of the company. The assessment may take into Additional remuneration principles account both macroeconomic and company-related exceptional circumstances, such as impairment of the long-term viability and Shareholding obligation and shareholding exposure profitability of the company. The deviation requires a prior proposal by The members of the Board of Management are obliged to build up the Personnel Committee. the following degree of share ownership within three years: The components of the remuneration system from which deviations may be made in exceptional cases include in particular the − Chairperson of the Board of Management: two times base salary, base salary, the annual bonus and the long-term incentive (LTI), i.e., € 3,822 thou, including their relationship to each other, their respective assessment − Regular Board of Management member: one time base salary, bases where applicable, the target setting and target achievement i.e., € 975 thou. assessment principles, and the determination of any payout and payment dates. The duration of the deviation shall be determined by Holding is required for the entire term of service on the Board of the Supervisory Board at its due discretion, but should not exceed a Management. Shares will be acquired through mandatory pay period of four years. In a crisis situation, for example, this principle is component conversion. In case of a base salary increase, the intended to allow the appointment of a new board member, e.g., with shareholding obligation increases accordingly. The holding obligation crisis management expertise, with a remuneration structure that ceases with the end of the mandate. temporarily deviates from the remuneration structure. In combination with the virtual shares (RSU) accumulated over In the financial year 2021, the Supervisory Board did not make four years through the LTI plan, the Allianz SE Board of Management use of the option to deviate from the remuneration system. has significant economic exposure to the Allianz stock: It amounts to approx. 800 % of base salary for the Chairperson and approx. 700 % of base salary for a regular board member. 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, variable remuneration components already paid may be subject to a clawback for three years after payout. Additionally, a reduction or cancellation of variable remuneration may 30 Annual Report 2021 − Allianz Group