Term · Governance & Shareholder Structure
Remuneration Report
In briefThe remuneration report annually discloses the individual remuneration of the management board and supervisory board of a listed company. In Germany, Section 162 AktG governs its content. It shows whether remuneration is transparent and linked to comprehensible performance targets, and reveals possible governance risks.
Definition
The remuneration report is an annual report by listed companies on the individually granted and owed remuneration of management board and supervisory board members. In Germany it is governed by Section 162 AktG and is addressed by the general meeting. It is meant to make remuneration transparent and comprehensible in relation to company performance.
Why it matters for small caps
For small companies with a concentrated ownership structure, the remuneration report shows whether management board pay is tied to comprehensible performance targets. Striking structures can point to governance risks or conflicts of interest.
Common misreadings
- High total remuneration is broadly judged negatively, even though what matters is whether it is performance-based and appropriately designed relative to the industry.
In the process
Frequently asked
Who prepares the remuneration report?
The management board and supervisory board prepare it jointly. In Germany, the auditor checks whether the formal disclosures under Section 162 AktG have been made.
Does the general meeting vote on it?
The general meeting of listed companies regularly resolves on the approval of the remuneration report. The resolution has an advisory character.
What should you look for in the report?
The link between remuneration and performance targets, the design of variable components, and whether the targets are demanding and comprehensible.
Related terms
Sources
Primary
gesetze-im-internet.de – § 162 AktG
https://www.gesetze-im-internet.de/aktg/__162.html
https://www.gesetze-im-internet.de/aktg/__162.html
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.