49 Remuneration of the Board of Management and the Supervisory Board

NON-PERFORMANCE-RELATED REMUNERATION OF THE BOARD OF MANAGEMENT

The non-performance-related remuneration of the Board of Management comprises fixed remuneration and fringe benefits. The fringe benefits relate to noncash benefits granted and include in particular the use of operating assets such as company cars and the payment of insurance premiums. Taxes due on these noncash benefits were mainly borne by Volkswagen AG.

PERFORMANCE-RELATED REMUNERATION AND LONG-TERM INCENTIVE COMPONENT OF THE BOARD OF MANAGEMENT

Performance-related remuneration includes the annual bonus with a one-year assessment period. The long-term incentive component contains the long-term incentive (LTI) in the form of a performance share plan with a forward-looking three-year term. For details on performance share plans for current members of the Board of Management, please refer to the information in the section entitled “Remuneration based on performance shares and phantom shares (share-based payment)”.

At its meeting on April 22, 2016, Volkswagen AG’s Supervisory Board accepted the offer made by the members of the Board of Management to withhold 30% of the variable remuneration for fiscal year 2015 for the Board of Management members active on the date of the resolution and to make its disposal subject to future share price performance by means of phantom shares. The resulting effects on remuneration were reported as appropriate in previous years. For further details on the settlement of phantom shares, please refer to the information in the section entitled “Remuneration based on performance shares and phantom shares (share-based payment)”.

Expenses for performance shares and phantom shares do not represent remuneration under German GAAP and are therefore not included in the tables above.

As in the previous year, no interest-free advances were paid to members of the Board of Management.

SUPERVISORY BOARD REMUNERATION

The remuneration of the members of the Supervisory Board of Volkswagen AG is comprised entirely of non-performance-related remuneration components. Remuneration for supervisory board work at subsidiaries comprises a mix of non-performance-related and performance-related components.

PENSION ENTITLEMENTS AND BENEFITS TO RETIRED MEMBERS OF THE BOARD OF MANAGEMENT

On December 31, 2019, the pension provisions for members of the Board of Management amounted to €60.5 million (previous year: €55.8 million). Current pensions are index-linked in accordance with the index-linking of the highest collectively agreed salary insofar as the application of section 16 of the Gesetz zur Verbesserung der betrieblichen Altersversorgung (BetrAVG – German Company Pension Act) does not lead to a higher increase.

For former members of the Board of Management and their surviving dependents €32.7 million (previous year: €44.0 million) were granted. Pension provisions in accordance with IFRSs for this group of individuals amounted to €373.7 million (previous year: €324.0 million).

In connection with his departure effective March 31, 2020, Mr. Schot was promised the following amounts:

• a non-performance-related component of €2.4 million (previous year: €– million),
• a performance-related component of €3.8 million (previous year €– million) and
• a long-term incentive component of €3.9 million (previous year: €– million) were recognized.

The individual remuneration of the members of the Board of Management and the Supervisory Board is explained in the remuneration report in the management report. A comprehensive assessment of the individual remuneration components, including the LTI, in the form of the performance share plan can also be found there.