Board of Management remuneration

The information provided in the remuneration report should be considered part of the Group Management Report.

The remuneration of the Board of Management consists of different components and is aimed at supporting a sustained value-oriented management. Therefore, a distinction should be made between fixed salary, performance-based remuneration and equity-based remuneration as a long-term incentive. The amount of total remuneration of individual Board Members is dependent upon the delegated role and accountability, individual performance, achievement of the financial goals of the Allianz Group and of the respective business unit, as well as the evolution of the Allianz SE share price. The remuneration of the Board of Management is set by the Personnel Committee within the Supervisory Board while considering market and competition. Moreover, the structure of remuneration is regularly reviewed and discussed at the Supervisory Board.

In detail, the remuneration of the Board of Management comprises the following components:

Fixed salary

The fixed amount is paid as a monthly basic salary unrelated to performance. It is reviewed at the latest every three years. The amount is firstly influenced by the delegated role and accountability and, secondly, by external market conditions.

Performance-based remuneration

This component consists of an annual and a mid-term three-year bonus that are both dependent on performance and success, and limited in their amounts.

Equity-based remuneration

This element consists of virtual options (“Stock Appreciation Rights”, SAR) and virtual stocks (“Restricted Stock Units”, RSU). It is identical to the Allianz Equity Incentive Program which around 700 top managers and approximately 100 top performing future leaders participate in worldwide. Its value is aligned to the evolution of the Allianz SE share price. More detailed information on equity-based remuneration components can be found on the internet at www.allianz.com/corporate-governance or on pages 213 to 219. You find them in the PDF file "Other information", which you can download on page Notes to the Consolidated Financial Statements.

The amount of equity-based remuneration shown represents solely a mathematically calculated reference value. If and when the equity-based remuneration component actually leads to payout depends on the future evolution of the share price and the strike price on the exercise date. The exercise of SARs is possible, at the earliest, two years after their grant. RSUs will be exercised by the Company after five years. In relation to the exercise of SARs, the Board of Management has voluntarily committed to always hold the rights until the end of the plan as long as the share price has not already reached the defined maximum relevant to the exercise of the specific SARs. The exercises, the number of rights issued and the evolution of the value of equity-based remuneration are shown in the consolidated income statement.

Performance-based remuneration and equity-based remuneration together form a three-tier incentive system as presented in the following overview:

Three-tier incentive system

Annual bonus (short-term)				Three-year bonus (mid-term)				Equity-based remuneration (long-term)
Target category				Target category				Target category
Allianz Group financial goals				EVA-objective during issue period				Sustained increase in share price
Business division financial goals				Allianz Group
Individual objectives				Business division
				Strategic or “+One” objectives

Miscellaneous

The members of the Board of Management also receive perquisites. These are essentially contributions to accident and liability insurances as well as the provision of a company car; they are taxed individually as a remuneration component for each individual Board Member. In total, the value of perquisites amounted to € 0.3 million in 2006.

The following table sets forth the total remuneration each individual member of the Board of Management of Allianz SE received in 2006.

Total remuneration of each individual member of the Board of Management

Board of Management				Fixed remuneration								Perquisites				Total non-performance- related remuneration								Annual bonus1)								Reserves 3-year bonus2)
				2006 € thou				Change from previous year %				2006 € thou				2006 € thou				Change from previous year %				2006 € thou				Change from previous year %				2006 € thou				Change from previous year %
Michael Diekmann (Chairman)				1,050				17				40				1,090				16				2,224				49				458				(15)
Dr. Paul Achleitner				700				0				25				725				1				1,575				48				308				(14)
Clement B. Booth				700				n/a				44				744				n/a				1,476				n/a				345				n/a
Jan R. Carendi				700				17				15				715				16				1,308				51				285				(5)
Enrico Cucchiani				700				n/a				13				713				n/a				1,488				n/a				358				n/a
Dr. Joachim Faber				700				17				16				716				16				1,399				53				296				(10)
Dr. Helmut Perlet				700				17				31				731				16				1,508				64				315				(12)
Dr. Gerhard Rupprecht				700				17				15				715				16				1,500				65				330				(8)
Jean-Philippe Thierry				700				n/a				21				721				n/a				1,437				n/a				353				n/a
Dr. Herbert Walter				700				0				33				733				1				1,363				30				363				17
Dr. Werner Zedelius				700				17				14				714				16				1,570				61				294				9
Total				8,050				n/a				267				8,317				n/a				16,848				n/a				3,705				n/a

The following table sets forth the equity-based remuneration each individual member of the Board of Management received in 2006.

Distribution of remuneration with long-term incentive effect

Board of Management				Number of SARs granted				Number of RSUs granted				Mathematical value of SARs at the date of grant				Mathematical value of RSUs at the date of grant				Total
				2006				2006				2006 € thou				2006 € thou				2006 € thou				Change from previous year %
Michael Diekmann (Chairman)				15,228				7,752				571				957				1,528				(27)
Dr. Paul Achleitner				10,476				5,332				393				658				1,051				(34)
Clement B. Booth				9,379				4,774				352				589				941				0
Jan R. Carendi				9,380				4,775				352				589				941				(34)
Enrico Cucchiani				7,139				5,634				268				696				963				(23)
Dr. Joachim Faber				9,673				4,924				363				608				971				(31)
Dr. Helmut Perlet				9,697				4,936				364				609				973				(30)
Dr. Gerhard Rupprecht				9,638				4,906				361				606				967				(29)
Jean-Philippe Thierry				9,321				4,745				350				586				935				73
Dr. Herbert Walter				10,476				13,398				393				1,654				2,047				(34)
Dr. Werner Zedelius				10,027				5,104				376				630				1,006				(15)

The total remuneration of the Board of Management for fiscal year 2006 amounted to € 41.2 million (2005: € 37.1 million).

Remuneration for Allianz Group Mandates and for Mandates from outside the Allianz Group

If a member of the Board of Management accepts mandates in other companies and receives compensation for it, the amount is fully transferred to Allianz SE in the case of Allianz owned companies. In case of remuneration received from mandates in companies outside the Allianz Group, 50% of it is normally transferred to Allianz SE. In 2006, the remuneration that the members of the Board of Management were entitled to keep after payment to Allianz SE amounted to € 397,225. The remuneration from mandates in companies outside the Allianz Group is shown in the Annual Reports of the companies concerned.

For a list of Supervisory Board mandates in companies outside the Allianz Group see page Mandates of Board of Management.

Pensions and similar benefits

The pension agreements for members of the Board of Management up to 2004 stipulated retirement benefits of a fixed amount that was not linked to the evolution of fixed or variable remuneration components. These pension agreements were examined and revised at irregular intervals. Effective 2005, Allianz SE changed to a contribution-oriented system. The rights from the respective pension promises existing at that point in time were frozen. As a result of the change, since 2005, annual contributions have been made by the Company instead of the former increase amendments. 2.75% per year is guaranteed as the minimum interest rate applicable to these contributions. In case of an insured event, the accumulated capital is converted to equal annuity payments which are then paid out for the rest of the member’s life. If the net return on investment exceeds the actuarial interest rate, a corresponding profit share will be credited in the following year. The amount of the contribution payment will be revised yearly. The contribution payments are guaranteed only as required for further regular financing of accrued pension rights resulting from defined benefits promises existing on December 31, 2004. The increase in reserves for pensions (service cost) includes the required expenditures for further financing of accrued pension rights as well as the contribution payments for the new contribution-oriented system.

When a mandate of the Board of Management ends, an old age pension may become payable at the earliest upon completion of the 60th year of age, except for cases of professional or general disability for medical reasons, or survivors’ pensions in the case of death. If the mandate is terminated for other reasons before the retirement age has been reached, a non-forfeitable pension promise is maintained. This does not include, however, a right to pension payments beginning immediately.

The Allianz Group has paid € 3.6 million (2005: € 2.0 million) to increase pension reserves and reserves for similar benefits for active members of the Board of Management. On December 31, 2006, pension reserves and reserves for similar benefits to members of the Board of Management who were active at that date, amounted to € 23.1 million.

The following table sets forth the current service cost and contributions arising with the current pension plans according to IAS 19, excluding the current service cost for the old pension plan redeemed as of December 31, 2004, for each individual member of the Board of Management of Allianz SE in 2006.

Pension plans: Current service cost and contributions according to IAS 19

Board of Management				€ thou				Board of Management				€ thou
Michael Diekmann (Chairman)				365				Dr. Helmut Perlet				239
Dr. Paul Achleitner				187				Dr. Gerhard Rupprecht				226
Clement B. Booth				258				Jean-Philippe Thierry				34
Jan R. Carendi				0				Dr. Herbert Walter				195
Enrico Cucchiani				255				Dr. Werner Zedelius				238
Dr. Joachim Faber				253

The additional current service cost in 2006 according to IAS 19 for the frozen old pension plan amounted to, in € thousand, for Mr. Diekmann € 166, for Dr. Achleitner € 257, for Dr. Faber € 134, for Dr. Perlet € 138, for Dr. Rupprecht € 174, for Dr. Walter € 383 and for Dr. Zedelius € 89.

Termination of service

Former members of the Board of Management who leave the Board after at least a five-year term of membership are entitled to a transition payment for a period of six months. This consists of monthly fixed payments to the amount of the last paid fixed salary and the proportionate annual bonus on the basis of 100% target achievement.

If service is terminated as a result of a so-called “change of control”, the following separate regulation additionally applies:

A change of control requires that a stockholder of Allianz SE acting alone or together with other stockholders holds more than 50% of voting rights in Allianz SE. If the appointment of a member of the Board of Management is unilaterally revoked by the Supervisory Board as a result of such a change of control within a period of twelve months after the change of control, membership terminates by resignation jointly or from the side of the concerned member of the Board of Management, because his or her responsibilities as manager are substantially decreased and, without the concerned Board Member culpably giving cause for termination, he receives the contracted benefits for the rest of the duration of his or her employment contract paid in the form of a lump-sum payment. The amount depends on the following determining factors: the fixed salary at the change of control, the annual and current three-year bonus, in each case discounted according to market conditions at the time of payment. A target achievement of 100% is the basis for the annual or three-year bonus. If the remaining duration of the service contract is not at least three years at the time of the change of control, the lump-sum payment increases in regard to fixed salary and annual bonus to correspond to a term of three years. If the concerned member of the Board of Management completes his or her 60th year of age before three years have elapsed, the lump-sum payment decreases correspondingly. In view of equity-based remuneration the concerned member of the Board of Management is treated as a pensioner according to the respective conditions of the pension plan. These regulations are effective correspondingly if the Board of Management mandate is not extended within two years after a change of control.

For other cases of an early termination of appointment to the Board of Management, the service contracts do not contain any particular regulations.

Benefits to retired Members of the Board of Management

In 2006, remuneration and other benefits of € 4.3 million (2005: € 4.3 million) were paid to retired members of the Board of Management and their surviving dependents. Additionally, a reserve for current pensions and accrued pension rights totaled in € 47.0 million (2005: € 38.9 million).