DAccording to a media report, Deutsche Bahn (DB) will soon be able to pay its board members bonus payments for 2022 totaling almost five million euros. NDR, WDR and “Süddeutsche Zeitung” reported on Monday that they had been able to view the group’s long-standing calculation model for the bonuses. Areas in which goals were missed can obviously be offset against other areas in which goals were exceeded. High bonuses are possible despite missing the goals for punctuality and customer satisfaction.
According to the report, payment of the bonuses for 2022 was suspended because DB used the electricity price brake as state support. The price brake expires at the end of the year; The bonuses could therefore be paid from January 2024, reported NDR, WDR and “Süddeutsche”. The bonuses are in addition to the basic salary of around four million euros for the nine board members in 2022. According to the group report, they will receive a total of around nine million euros.
According to the report, the railway slightly exceeded its own goals in the area of “women in leadership and employee satisfaction” in 2022. The bonus for this area has apparently been increased significantly, to a value of 175 percent, it goes on to say. The nine company board members at the time should receive around 1.6 million euros for this goal alone.
Supervisory board decides on bonus system at the railway
According to the documents, the railway also exceeded its self-imposed target when it came to CO₂ savings, by two percentage points, the research alliance reported. For this purpose, CEO Richard Lutz should receive almost 440,000 euros in bonus payments.
The supervisory board, which includes representatives of the federal government and the unions, decides on the bonus system at the railway. According to the report, the system will be changed over next year. Railway board members would then have a higher proportion of their salary as a fixed salary, and the proportion of bonuses should decrease. The railway explained to the research alliance that the company does not comment on matters relating to the supervisory board.
The group report for 2022 states that the total compensation of the board members consists of a fixed basic salary, a performance-related annual bonus and a long-term bonus program with a multi-year assessment basis. The focus of these long-term incentives would be “long-term transport and climate policy goals as well as the sustainable creditworthiness and profitability of the DB Group”. The plan term is four years.
Fewer bonuses for train chaos
Months ago there was public criticism that the railway board received high bonuses because of Schenker's good business figures, even though the punctuality rate of 65 percent last year was well below the target. In the future, Deutsche Bahn managers will feel it more strongly than before if customer satisfaction and punctuality are as bad as they are now. In September there was a proposal for a comprehensive reform of executive compensation, which the FAZ reported on. In addition to a restructuring of fixed and variable components, it also provided for the first time “dampening factors” for the bonuses, which in such a situation could lead to significant salary losses of up to 25 percent.
Specifically, this means: If Deutsche Bahn misses its goals in three of six categories, this also affects the bonus for the areas in which the goals were achieved or even exceeded. This is also available on the train. The bonuses are then reduced by half, overall this reduces the possible salary by 25 percent.
In addition to the five existing categories, a new one is added: sustainability. This is also given greater weight in the group as a whole, because a restructuring of the railway is currently in full swing: On January 1st, the rail network and the train stations are to be merged into a “common good-oriented infrastructure company”, which in the future will not only work for profit, but also itself should primarily be geared towards the needs of customers and climate protection.
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