45. Remuneration based on performance shares

Selected beneficiaries within the Group receive remuneration based on performance share plans. The structure of these plans varies depending on the awarding Group companies or their reference shares, and on the hierarchy levels of the beneficiaries.

Performance share plans on the basis of Volkswagen preferred shares

The members of the Board of Management, top management and management, as well as selected participants below management level, are granted performance share plans based on Volkswagen’s preferred shares that are largely functionally equivalent and settled in cash in full by Volkswagen AG or the awarding Group company.

Board of Management and TOP MANAGEMENT

Each performance period of the performance share plan for members of the Group Board of Management has a term of four years. At the grant date, the annual target amount under the LTI is converted into performance shares on the basis of the initial reference price of Volkswagen’s preferred shares and allocated to the beneficiaries as a purely mathematical figure. This annual target amount is allocated to the respective beneficiaries as a pure calculation position. Based on the degree of target achievement for the annual earnings per Volkswagen preferred share, the number of performance shares is definitively determined on the basis of a four-year, forward-looking performance period. After the end of the performance period, a cash settlement is made. The payment amount corresponds to the number of determined performance shares, multiplied by the closing reference price at the end of the period plus a dividend equivalent. For members of the Board of Management, the payment amount from the performance share plan is limited to 200% (250% from 2023) of the target amount. Penalty and clawback rules apply at the same time: if there is relevant misconduct during the assessment period, payments under the performance share plan can be reduced or demanded back. More information on the structure and objectives of the performance share plan for members of the Group Board of Management can be found in the remuneration report.

The performance period for beneficiaries in top management is three years and the payment amount under the performance share plan is limited to 200% of the target amount.

Members of management and selected participants below management level

The payment amount for members of management and selected participants below management level is determined by multiplying the target amount by the degree of target achievement for the annual earnings per Volkswagen preferred share and the ratio of the closing reference price at the end of the period, plus a dividend equivalent, to the initial reference price. Target achievement is determined on the basis of a three-year performance period with a forward-looking horizon of one year.

In the fiscal year, beneficiary members of management and selected participants below management level were allocated a target amount of €623 million (previous year: €714 million) on which target achievement of 100% is based. As of December 31, 2024, the total carrying amount of the obligation, which corresponded to the intrinsic value of the liabilities, was €565 million (previous year: €986 million). A total expense of €576 million (previous year: €998 million) was recognized for this commitment in the reporting period.

Other performance share plans

Group companies also have their own performance share plans, which are largely based on Volkswagen AG’s performance share plans.

The performance share plans of Porsche AG is different in that the level of target achievement is determined on the basis of the annual earnings and share price performance of Porsche preferred shares. For Board of Management members and top management, the performance share plan is applied with a forward-looking four-year horizon in each case. For members of management, the performance share plan is generally applied with a four-year term and a forward-looking horizon of one year.

For the performance share plans of the TRATON Group, the level of target achievement is determined on the basis of the annual earnings and share price performance of TRATON shares. For the members of the Board of Management and of the brand boards of management of the TRATON Group who are not members of the Board of Management of TRATON SE as defined under stock corporation law, and for members of management at International Motors, the performance share plans are applied with a forward-looking horizon of three or four years. For members of management and selected beneficiaries below the TRATON Group’s management, a performance share plan is generally applied with a four-year term and a forward-looking horizon of one year.

As of December 31, 2024, the total carrying amount of the obligation resulting from these plans was €160 million (previous year: €131 million) and the intrinsic value of the liabilities was €89 million (previous year: €92 million). A total expense of €115 million (previous year: €119 million) was recognized in the reporting period.