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How does it work?

Our long-term incentive plan is designed to reward you for your contribution to our joint success. No administration, no need to exercise options – making the plan simple and attractive for you. We just want you to be a part of our long-term success – in work and reward.

The performance targets

There are two performance targets determining how many of your granted performance shares will actually vest – the net income growth and the relative total shareholder return.

Both targets are weighted equally at 50% each.

We chose these two targets to reflect both internal and external long-term performance of Fresenius. The net income growth reflects our growth in profit. The relative total shareholder return compares our success to our competitors.

Both targets will be measured over a four-year measurement period. It will start with the calendar year in which you received your grant and end with the calendar year before vesting.

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Net income growth

Our internal target is based on the growth rate of the adjusted consolidated net income after currency adjustments – in short: the net income growth. This is the percentage gain or loss over our plan term and indicates Fresenius` growth in profits. Our target is to achieve 8% growth in four years – achieving this means a payout of 100% of your granted performance shares.

Target achievement overview

Target achievement overview

With a net income growth of 20%, target achievement reaches 200% – where it is capped. At a minimum, we need 5% growth to reach a vesting. Between 5% and 8% as well as between 8% and 20% intermediate values will be calculated by linear interpolation – so partial target achievement will also lead to a respective vesting.

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Historical target achievement

Historical target achievement

Check out the historical growth rates to get a better feeling for the target.
As you can see, over the last four years, we reached our target of 8% growth and even more. This is why we chose to settle our target as we did. Nevertheless, we cannot make any predictions.

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Relative Total Shareholder Return

To compare our success to our competitors, we take a look on the relative total shareholder return (TSR) within the STOXX Europe 600 Health Care index. This sector index includes the STOXX Europe 600 companies with Heath Care as a primary revenue source. The TSR combines Fresenius` share price development and dividends paid. This shows the total return to our shareholders in comparison to our competitors.

Thus, we measure how many competitors within the index we outperform after four years. We will only compare Fresenius to those companies who are part of the index for the whole performance period – the companies belonging to this sector index may change during this time. Check out the current components.

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Target achievement overview

Our target is to perform better than 50% of our competitors. We rank the companies in the STOXX Europe 600 Health Care index according to the TSR results over four years. Outperforming by 50% results in a vesting of 100% of your granted performance shares. Vesting can be up to 200% of your granted performance shares, if we outperform 75% or more. Our threshold is to reach a higher TSR than 25% of our competitors. In between target achievement will be calculated by linear interpolation.

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Historical target achievement

Check out the historical growth rates to get a better feeling for the target.
As you can see, over the last four years, we reached our target of outperforming 50% of our competitors. This is why we chose to settle our target as we did. Nevertheless, we cannot make any predictions.

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