Compensation

Remuneration Committee

The Remuneration Committee makes recommendations to the Board of Directors on the establishment and termination of employment, as well as the remuneration package of executive officers, including setting and evaluating annual individual targets. The Remuneration Committee holds at least two meetings each year.
Remuneration Committee members are elected by the Board of Directors from among its members.

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

According to the resolutions passed on the General Meetings in April 2010 and in April 2011, the remuneration of Members of the Board members, Supervisory Board Members and Audit Committee Members at the Company are as follows:

For the year ended December 31, 2011, the aggregate compensation of the members of the Board of Directors in their capacity as Board members was HUF 14.04 million.
For the year ended December 31, 2011, the aggregate compensation of the members of the Supervisory Board in their capacity as Supervisory Board and Audit Committee members was HUF 55.52 million.

Remuneration of Management Committee Members

• With respect to the size of each element of the compensation package the Remuneration Committee of the Board of Directors 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:
  • Basic salary
    Fixed amounts of compensation determined for individuals varying according to the individual’s position and performance, paid in equal monthly amounts.
  • Variable pay
    The annual bonus is defined as a certain percentage of the basic salary payable pro rated to the achievement of the personalized bonus targets defined before the start of the business year, derived from Magyar Telekom Group’s 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.
  • Fringe and social benefits
    Fringe benefits (e.g.: company car, mobile phone, managerial insurance etc.) are determined upon consideration of domestic benchmark data and the principles of cost efficiency.
    Fringe and social benefits are granted in compliance with the relevant stipulations of Magyar Telekom’s Collective Agreement and policies.
• The performance and potential of individual management members are evaluated annually along predefined aspects and procedures.

For the year ended December 31, 2011, the aggregate compensation of the members of the Management Committee was HUF 1058 million.