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Sub practice
Sub practice

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.

Our offering

Scope of services

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

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.
 

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