46 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. Since 2018, appointments assumed at Group companies have not been remunerated separately; instead they are deemed to be included in the remuneration. 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. The performance shares granted to the incumbent members of the Board of Management under the remuneration system in 2018 (134,956 performance shares) had a fair value of €22.5 million (previous year: €20.1 million) at the grant date; this amount represents remuneration under German GAAP.

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.

In fiscal year 2018, expenses totaling €10.6 million (previous year: €43.8 million) were recognized for the performance shares, while income for the phantom shares totaled €0.6 million (previous year: expense of €2.0 million). They 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

As a result of its regular review of the Supervisory Board remuneration, the Supervisory Board proposed a reorganization of the system of Supervisory Board remuneration to the 2017 Annual General Meeting, which was approved on May 10, 2017 with 99.98 % of the votes cast. The remuneration of the members of the Supervisory Board of Volkswagen AG then no longer contains any performance-related remuneration components but consists entirely of non-performance-related remuneration components. Remuneration for supervisory board work at subsidiaries continues to comprise a mix of non-performance-related and performance-related components.

PENSION ENTITLEMENTS

On December 31, 2018, the pension provisions for members of the Board of Management amounted to €55.8 million (previous year: €125.4 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.

In connection with their departure from the Board of Management Mr. Blessing, Mr. Garcia Sanz, Mr. Müller and Mr. Stadler were promised the following amounts:

For Mr. Blessing

• a non-performance-related component of €3.8 million,
• a performance-related component of €4.2 million and
• a long-term incentive component of €3.9 million were recognized.

For Mr. Garcia Sanz

• a non-performance-related component of €1.6 million,
• a performance-related component of €1.8 million and
• a long-term incentive component of €1.6 million were recognized.

For Mr. Müller

• a non-performance-related component of €4.0 million,
• a performance-related component of €6.6 million and
• a long-term incentive component of €7.2 million were recognized.

For Mr. Stadler

• a non-performance-related component of €3.2 million,
• a performance-related component of €1.9 million and
• a long-term incentive component of €1.8 million were recognized.

The payment of the amounts mentioned above for Mr. Stadler is linked to the development and outcome of the criminal proceedings. For the amounts promised, in general, Volkswagen AG and AUDI AG are jointly and severally liable.

For former members of the Board of Management and their surviving dependents €44.0 million (previous year: €19.9 million) were granted. Pension provisions in accordance with IFRSs for this group of individuals amounted to €324.0 million (previous year: €269.0 million).

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.