Global Corporate Governance Guidelines Remuneration Remuneration of Executive AllianzGI believes that executive AllianzGI encourages all companies to Directors and Senior directors should be encouraged to require that the management build Managers receive a proportion of their substantial shareholding in the compensation in form of company company in order to align their shares. Therefore AllianzGI would interests better with the interests of AllianzGI expects companies to operate generally support the use of well- investors. Only shares that are within the parameters of their designed share-based compensation beneficially owned by executives remuneration policy as approved by plans, including appropriate deferrals. should be counted towards formal shareholders. Both the structure and share ownership requirements. level of executive remuneration should AllianzGI supports management be designed to promote long-term incentive plans where: AllianzGI favours share-based success of the company. The board and – Incentive awards are subject to incentive schemes over stock options the Remuneration Committee should relevant KPIs and robust due to concerns over potentially be able to explain and justify the performance targets; disproportionate incentive for structure and quantum of executive pay – The award opportunity is clearly executives to drive shorter-term share in the context of the company’s business defined; price performance at the expense of environment and performance. – Performance periods are of the longer-term health of the business, appropriate duration (eg, no less as well as excessive shareholder AllianzGI does not approve of than three years for a long-term dilution (the latter can be mitigated significant salary increases that are not incentive award); through the use of Share Appreciation linked to material changes in the – For primary KPIs, vesting under Rights (ie, SARs)). business or in the role and relative performance metrics is responsibilities of executive directors. linked to robust performance AllianzGI expects clear disclosure of all We do not consider it appropriate to against that of the selected peer KPIs and performance targets under offer contractual multi-year group; and all management incentive plans, with a guarantees of salary increases, bonus – The vesting scale is designed to view to enabling investors better to payments and/or equity encourage higher levels of assess the link between executive compensation. AllianzGI expects performance. compensation and corporate strategy companies to pay no more than and performance. We are keen to necessary on recruitment of executive We are generally willing to accept understand both annual and long- directors and, whenever possible, to small-scale share awards that are not term targets set by the board for link recruitment-related awards to the conditional on performance (eg, executives, as well as performance company’s performance. restricted shares or time-vested shares) against these targets. Particular up to a limit of 100% salary. Any larger importance is placed on the following Generally, we would like to see share-based awards should be subject considerations: executive compensation comprising to robust performance targets as – T he link between performance KPIs short-term and long-term elements stated above, although we and targets, and the mid- and long- that align executives with shareholders acknowledge that there may be term goals of the company; and where superior rewards can be exceptional circumstances (eg, – A h ealthy mixture of KPIs to ensure achieved by attaining superior turnaround/recovery situations) where there is no over-reliance on a single performance. However, we a larger restricted share award will be dimension of performance or key acknowledge that remuneration appropriate. In the United States we indicator; policies will differ depending on the would accept restricted or time-vested – I ncorporation of risk considerations company’s circumstances and are shares up to 50% of share-based pay. so that there are no rewards for prepared to consider alternative taking inappropriate risks at the arrangements. 16