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Remuneration and pensions

Attractive pay arranged on a transparent basis is an important argument in recruitment and in ensuring the retention of dedicated staff at the Company. Rheinmetall offers attractive contract conditions. These are geared towards the scope of the employee’s duties, responsibilities and services and are referenced on the market. Here, performance and success-related bonuses and variable salary components are paid in addition to fixed remuneration components.

As regards executives and exempt employees, the Management by Objectives concept is linked with variable salary components. An individual variable proportion of income is determined subject to the attainment of agreed individual targets and the success of the Company. Depending on the extent to which targets are achieved, this ranges between 0 % and 200 % of variable annual target compensation. The fact that these income components are linked to targets provides incentive to act on one’s own responsibility and to take on challenges.

Division heads, managers and executives receive a long-term incentive in addition to these short-term components. This is geared towards long-term corporate success and includes payment of 40 % of the long-term incentive amount in Rheinmetall shares, which are subject to a four-year lockup period. The number of shares granted is based on a reference share price which corresponds to the average price on the last five trading days in February of the subsequent fiscal year. 60 % of the long-term incentive is paid in cash and is used to pay tax on the Rheinmetall shares immediately.

The Company’s success is reflected in two ways, also for staff covered by collective wage agreements: Firstly, employees receive an annual bonus subject to the performance of their division or sector and, secondly, the increase in the value of the Company achieved is paid out in a success-oriented component in the company pension, thus leading to improved support in old age.

The Rheinmetall Group has been supporting its employees for many years with innovative company pension models in order to financially secure their standard of living in retirement. The pension scheme has an identical structure for staff and managers, but higher incomes are reflected in increased benefits. This system, which applies to all sites in Germany, consists of three components: A reliable basic plan, a performance-related intermediate plan linked to the increase in Company value and a supplementary plan financed by the employee, allowing for various forms of compensation such as deferred compensation, direct insurance or a Riester pension.