Remuneration and employee participation
Remuneration within companies has become a political issue; politicians are responding with legal acts. This means that the regulatory requirements relating to the remuneration systems for staff, managing directors and board members have been constantly increasing on national and international levels for several years. While international companies endeavour to structure their remuneration systems and incentive plans in a uniform way at a global level, the terms & conditions of these systems and plans are being treated by courts as general terms and conditions of business and are thus being subjected to corresponding controls. Remuneration systems are subject to comprehensive disclosure requirements.
The development of remuneration systems that are both lawful and reasonable requires detailed knowledge of the regulatory environment and past rulings, as well as inside knowledge of standard industry procedures. Corresponding forensic experience is also required when it comes to defending against unjustified claims. In the case of global systems, knowledge of the legal and tax requirements in all countries involved is necessary, together with an ability to combine these in order to create a reasonable whole. Allen & Overy's global Employment & Benefits Group represents a decisive advantage for our clients in this regard.
At the interface with questions relating to corporate governance, which are often raised in connection with the remuneration of managing directors and board members, the lawyers in our German Employment & Benefits practice group often form interdisciplinary teams with corporate law colleagues in order to provide national and international companies with the best possible solution.
Scope of services
- Strategic advice on all remuneration issues
- Fixed and variable remuneration and bonus payments on a collective or individual law basis
- Developing target agreement systems
- Models for employee participation and all other incentives (long-term incentive plans, stock-option plans, performance share-unit plans, etc.)
- Share-based remuneration
- Remuneration of board members and managing directors
- Drafting and reviewing remuneration guidelines in line with IVV, KAGB, MiFID II, etc.
- Advising on disclosure requirements
- Compliance checks
- Launching and reviewing international remuneration systems
- Developing and assessing retention, transaction and individual bonus schemes
- Assessing and defending against claims under remuneration models or disputes relating to bonus payments, gratuities or target agreement systems
A few references
- Commerzbank AG on converting variable remuneration to shares.
- Commerzbank AG successfully defended before the German Federal Labour Court in a dispute with thirteen former investment bankers from Dresdner Kleinwort Investment Bank due to reduction of bonus payments.
- Deutsche Telekom AG and foreign group companies on implementing a group-wide matched share remuneration plan for managers within the group in various countries, including the Netherlands, Slovakia, Czech Republic, Austria and Poland.
- DG-VERLAG on restructuring the sales force and launching new remuneration structures for sales representatives. Negotiating a balance of interests and the social plan, as well as conciliation committee proceedings for a works agreement on variable remuneration.
- ING DiBa AG on concluding management board contracts and structuring management board remuneration.
- ING Group on introducing a global remuneration policy. This project involved interpreting the new European regulations and implementing them within the respective local remuneration policies in over 40 jurisdictions.
- LBBW Immobilien on introducing an LTIP for managing directors.
- A pharmaceuticals company on redrafting employment contracts and remuneration terms for management board members.
- A leading global chemicals and pharmaceuticals company on all issues relating to employment law in connection with various acquisitions and on developing a long-term incentive plan.
News & insights
Publications: 02 JULY 2021
This briefing is Part 4 of a series of briefings aiming at providing an overview of the key elements of the new German Supply Chain Due Diligence Act.Read more
News: 02 JULY 2021
Allen & Overy has advised global investment firm The Riverside Company (“Riverside) on the IPO of Dresden-based Bike24, a leading e-commerce platform which is all about cycling.Read more
News: 11 MAY 2021
Allen & Overy advises Franz Haniel & Cie GmbH on the sale of ELG Haniel GmbH ("ELG") to Luxembourg-based steel producer Aperam S.A.Read more
Publications: 19 APRIL 2021
After weeks of tough wrangling, the Federal Cabinet has decided to oblige companies throughout Germany to offer coronavirus tests to their employees. This obligation will be included in the SARS-CoV-2…Read more
very strong in the assurance of clients, professionally excellent, precise in expression
competitor, JUVE Handbook 2015/2016
Hans-Peter Löw enjoys excellent visibility in the financial services sector, predominantly advising institutions on their remuneration and bonus systems.
Chambers Europe 2016
Dr Hans-Peter Löw, Lawyer of the Year 2016 for Labour and Employment Law, Hesse
Germany’s Best Lawyers 2016“, BestLawyers@ Handelsblatt
very solution-oriented and reliable
client, Legal 500 2016
The remuneration group is showing an ongoing strong development.
JUVE Handbook 2016/2017