Performance and remuneration

Daimler rewards good work by means of performance-oriented and success-oriented compensation in line with local conditions. Binding Group-wide remuneration agreements are in force for employee assignments abroad and for retirement benefits. This system ensures that we remain competitive and attractive in diverse markets. It also allows us to take into account what are in some cases very different economic conditions in various locations.

Expenditures for human resources at Daimler in 2007 totaled € 16 (€ 20.3) billion, most of which was accounted for by wages and salaries. Of that total, € 11.4 billion was spent in Germany, € 1.7 (€ 6) billion in the NAFTA region, and € 2.9 billion in the remaining countries. All figures in brackets represent human resources expenditure that includes Chrysler up until deconsolidation on August 7, 2007.

A uniform worldwide model is used for the remuneration of managers. This model consists of both base and variable elements, with the rate of the variable compensation growing in line with a manager’s increased level of responsibility. Variable performance-based elements also include stock option packages. Daimler can deny allocation of variable remuneration and performance phantom shares to any employee who violates codes of conduct such as the Integrity Code, for example.

Remuneration for employees subject to collective bargaining agreements is based on regional or national agreements. All of the Group’s worldwide employees who are covered by collective bargaining agreements also receive full compensation for their mandatory and completed overtime.

In 2007, Daimler introduced a new uniform collective framework agreement for hourly and salaried employees in Germany. Known as ERA, it is based on the agreement reached in the German state of Baden-Württemberg, and is now binding at all Daimler locations in Germany. ERA eliminates the distinction between hourly and salaried employees, as the work performed by qualified specialists and many salaried employees has become increasingly similar as of late. Daimler now pays supplemental wage or salary components to ensure that no one in the workforce is disadvantaged by the introduction of ERA. The collective bargaining system remuneration component, which is an important part of ERA, is paid out to most of the workforce on the basis of performance. The level of compensation is determined on an annual basis by means of a new leadership process known as NAVI, which is designed to intensify dialogue between management staff and their employees. Start, status, and assessment meetings between an employee and his or her supervisor must each take place at least once a year as part of the NAVI program.