Compensation

Remuneration and Nomination Committee

The Remuneration and Nomination Committee supports the Board of Directors of the Company regarding the remuneration and certain nomination related issues of the members of the corporate bodies and the top executives of the Company in accordance with its Rules of Procedure. The reason for combining certain tasks regarding the remuneration and nomination is to make the decision making procedure of the Board of Directors more efficient in personnel matters, and to ensure the complex handling thereof. The committee consists of three members elected by the Board of Directors from among its members.

Members of the Remuneration and Nomination Committee

Dr. Robert Hauber

Dr. Robert Hauber

Senior Vice President Finance & Performance Management Europe, Deutsche Telekom AG

Biography

Ralf Nejedl

Ralf Nejedl

Senior Vice President B2B Europe, Deutsche Telekom AG

Biography

Frank Odzuck

Frank Odzuck

Chief Executive Officer of Zwack Unicum Plc.

Biography

Compensation of members of the Board of Directors, Supervisory Board and Audit Committee

1. Board of Directors

  • The members of the Board of Directors receive a fee.
  • The amount of the fee is determined by the General Meeting.
  • The fee is specified on the basis of domestic benchmark data.
  • The fee can be revised upon the initiative of the Remuneration and Nomination Committee.
  • Members, elected from the management of the strategic investor, waive their entitlement to the fee whereas members, elected from the management of the Company, offer their fee for charity purposes.
  • The Board of Directors annually assesses its own activity according to predefined criteria (strategy, business performance, compliance, efficiency, dividend policy, information flow). Within the framework of the assessment the individual members' self assessment is also reviewed according to predefined criteria.


2. Supervisory Board

  • The members of the Board of Directors receive a fee.
  • The amount of the fee is determined by the General Meeting.
  • The fee is specified on the basis of domestic benchmark data.
  • The fee can be revised upon the initiative of the Remuneration and Nominatio Committee.
  • Members, elected from the management of the strategic investor, waive their entitlement to the fee whereas members, elected from the management of the Company, offer their fee for charity purposes.
  • The Board of Directors annually assesses its own activity according to predefined criteria (strategy, business performance, compliance, efficiency, dividend policy, information flow). Within the framework of the assessment the individual members' self assessment is also reviewed according to predefined criteria.


3. Audit Committee

  • The members of the Board of Directors receive a fee.
  • The amount of the fee is determined by the General Meeting.
  • The fee is specified on the basis of domestic benchmark data.
  • The fee can be revised upon the initiative of the Remuneration and Nomination Committee.
  • The Audit Committee, based on the itemized review of the tasks specified in its Rules of Procedure, concretely assesses the work of the respective year that was carried out to fulfill the tasks contained in the Rules of Procedure and defines those activities that need to be improved.

According to the resolution passed on the General Meetings in April 2014 the remuneration of Members of the Board of Directors, Supervisory Board Members and Audit Committee Members at the Company are as follows:

  • The Chairman of the Board of Directors HUF 600,000 per month
  • The Members of the Board of Directors HUF 450,000 per month
  • The Chairman of the Supervisory Board HUF 500,000 per month
  • The Members of the Supervisory Board HUF 325,000 per month
  • The Chairman of the Audit Committee HUF 475,000 per month
  • The Members of the Audit Committee HUF 250,000 per month


4. Remuneration of Management Committee Members

  • With respect to the size of each element of the compensation package the Remuneration Committee submits its proposals in consideration of domestic benchmark surveys.
  • Final decision is taken by Magyar Telekom's Board of Directors.
  • The compensation package is reviewed once each year.


The compensation package consists of the following elements:

Annual target salary

The components of the annual target salary are the annual base salary and the management bonus.
The annual base salary is a fixed amount of compensation determined for individuals and varying according to the individual’s position and annual evaluation of performance, paid in equal monthly amounts.
The annual management bonus is defined as a certain percentage of the basic salary payable pro rated to the achievement of the personalized bonus targets defined with respect to the business year, derived from strategic targets. For each target, specific ranges from underachievement to overachievement are defined, along with the curve of payment on performance within the range. Annual targets and the evaluation of their achievement are to be approved by the BoD on the basis of the submission by the Remuneration Committee.


Mid – and long term incentives

The positive development of the Company depends on its management that aims at the long term and sustained increase of the corporate value, and closer harmonization of the interest of the management and the shareholders.
Magyar Telekom have launched / may have launch mid – and long term incentives programs, which items thereof, supplemented / provided by the Company, may be

  • depending on / not depending on the share price index, and/or monetary / in shares, and/or
  • one-time / periodically, and/or
  • fixed to / free from a lock-out period, and/or
  • certain percentage of the bonus shall be invested, or
  • share purchase (call in) at a share price / from time determined in advance.

The terms and conditions of participation are set forth in the respective description of the programs.


Other benefits and perks

Other compensation elements have been designed in consideration of domestic benchmark data with a view to cost efficiency (e.g. cars for personal use, mobile phone, managers' insurance, etc.).

Other benefits and perks have been guided by Magyar Telekom's Collective Agreement and regulations.

The performance and potential of the members of the management are individually assessed each year, on the basis of predefined criteria and processes.

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