A fixed basic salary, paid out in twelve monthly rates, based on the area of responsibility of the respective Board of Management member.

The annual bonus is a variable cash compensation, the level of which is related to the fixed base salary and varies in relation to the degree to which Daimler´s planned financial targets have been achieved.

Additional goals may also be taken into account, such as the development of total shareholder return. When setting the level of the annual bonus, the Presidential Committee of the Supervisory Board also has the possibility to reflect the Board of Management members' individual performance, which is not directly reflected in the performance of the Group, with a supplementary payment or a deduction of up to 25%. The operating profit target is determined annually in advance on the basis of the planning approved by the Supervisory Board.

The new component of share-based compensation which was introduced in 2005 as a so-called Performance Phantom Share Plan, is linked to the long-term development of corporate value. The new program is based on the principles of performance orientation, benchmark comparison and share ownership. The new share-based contains all essential criteria which are recommened in the line with good Corporate Governance. This is achieved on the one hand by a medium-term performance-based model of four year’s duration and on the other hand it comes to a long-term effect by the obligation to keeo the shares. Target achievement is oriented towards the return on net assets that is actually achieved by the Group and on its return on sales compared with selected vehicle manufacturers (BMW, Ford, GM, Honda, Toyota, Volvo and VW). Due to the allocation of phantom shares at the beginning of a period of four years, the development of the share price is also taken into consideration. The phantom shares are entitled to dividend as well. After three years, the final number of phantom shares is calculated from the degree of target achievement. These phantom shares must then be held for one more year. After four years, the amount to be paid out is calculated by multiplying the number of phantom shares by the share price valid at that time. The members of the Board of Management have to use a quarter of this gross amount paid out to purchase "real" shares in the company, until the share ownership guidelines (see below) are fulfilled.

In connection with the allocation of stock-based compensation, retroactive changes of performance targets or comparison parameters are expressly excluded.