Compensation Report

The Compensation Report describes the main features of the compensation system for the Executive Board and Supervisory Board of ProSiebenSat.1 Media SE for the financial year 2018. It explains the structure and level of compensation of the individual members of the Executive Board and Supervisory Board. The Executive Board compensation system for the financial years from 2018 was fundamentally revised by the Supervisory Board of ProSiebenSat.1 Media SE and presented for approval to the Annual General Meeting in May 2018, which granted its approval by a broad majority of 93%. All Executive Board employment contracts were converted to the new Executive Board compensation system, which has therefore applied retroactively since January 1, 2018.

This Compensation Report is part of the audited Combined Management Report and complies with the applicable statutory requirements. It also takes into account the recommendations of the German Corporate Governance Code (GCGC) in the version of February 7, 2017.

Compensation Paid to the Executive Board

Responsibility and Procedure for Determining Executive Board Compensation

In addition to their functions as directors and officers of the Company, the members of the Executive Board of ProSiebenSat.1 Media SE have contractual relationships with the Company. The ProSiebenSat.1 Media SE Supervisory Board is responsible for making the employment agreements with the members of the Executive Board. The employment contracts of Executive Board members have a maximum term of five years and also regulate compensation. After a proposal by the Compensation Committee, the structure and amount of the Executive Board’s compensation are defined by the Supervisory Board as a whole and are regularly reviewed. The Supervisory Board hereby ensures that there is an appropriate relationship between the personal performance and areas of work and responsibility of the individual members of the Executive Board on the one hand and the Company’s business situation on the other.

007 / Procedure for Determining Executive Board Compensation

In addition, the compensation structure within ProSiebenSat.1 Media SE is taken into account, whereby the Supervisory Board above all considers the relationship of Executive Board compensation to the compensation of senior management and the workforce as a whole and looks at the amount and structure of Executive Board compensation in comparable companies. The Supervisory Board currently considers comparable companies to be companies listed in the DAX, MDAX and STOXX Europe 600 Media, a sub-index of the STOXX Europe 600 index comprising companies from the European media industry, and direct competitors. The comparable companies therefore include, for example, Axel Springer SE, ITV plc and RTL Group SA. If the Supervisory Board deems it necessary or expedient, it consults experts to determine and review the Executive Board compensation. To date, the Supervisory Board has also had the Executive Board compensation reviewed at regular intervals by independent external consultants with regard to common market practice. The last such review was performed by an international and independent compensation consulting firm when the compensation system for the financial years from 2018 was adjusted.

Principles of the Compensation System

The ProSiebenSat.1 Media SE compensation system has clear and transparent structures and is in line with our Group strategy. In order to continuously improve, we review our compensation system regularly. For this reason, we have also increasingly entered into dialog with relevant capital market participants, especially last year. The aim of the compensation system for the Executive Board is to create an incentive for successful and sustainable company performance. The system is therefore geared toward a compensation that is transparent, performance-based and closely linked to the Company’s success. This depends in particular on long-term and challenging individual targets and the performance of the ProSiebenSat.1 Media SE share. The compensation system is intended to motivate the members of the Executive Board to achieve the targets enshrined in ProSiebenSat.1 Media SE’s business strategy and to avoid disproportionate risks.

Structure and Components of Executive Board Compensation from Financial Year 2018

The elements of the new Executive Board compensation system and changes compared to the previous system are described in detail below.

The new Executive Board compensation system now comprises just three instead of four components: a fixed base salary, an annual and a multi-year variable compensation component. In order to reduce the complexity of the compensation system, the expiring Mid-Term Incentive Plan will not be reinstituted. While the amount of the target compensation is largely unchanged, the compensation structure in the revised system is 35 : 30 : 35 (fixed base salary to annual variable compensation to multi-year variable compensation) for the chairman of the Executive Board and 40 : 20 : 40 for the other Executive Board members. The weighting for Jan David Frouman is slightly different at 41 : 20 : 39, as he receives a higher fixed base salary to compensate trips home. This higher compensation was already part of his previous Executive Board compensation.

008 / Structure of the new compensation system

Regardless of this, the Company pension for Executive Board members remains unchanged. The Company’s annual contribution to the Company pension still amounts to 20% of the fixed base salary. In addition, Executive Board members continue to receive fringe benefits.

Fixed base salary

The structure of the fixed base salary remains unchanged. The base salary is paid in twelve equal installments at the end of each month. If the employment contract begins or ends during a financial year, the base salary for this financial year is granted pro rata temporis.

Variable compensation

In the future, variable compensation will comprise only two elements: annual variable compensation (Short Term Incentive) in the form of an annual bonus payment (performance bonus) and multi-year variable compensation (Long Term Incentive) in the form of virtual shares in ProSiebenSat.1 Media SE (Performance Share Plan).

Short Term Incentive (performance bonus)

The Short Term Incentive continues to depend on ProSiebenSat.1 Group’s business performance in the past financial year. It is calculated on the basis of the target achievement (0% – 200%) identified for the financial year for EBITDA (earnings before interest, taxes, depreciation and amortization) and FCF (free cash flow), both at Group level, and a modifier (0.8 to 1.2) for the assessment of the individual and collective performance of the Executive Board members. The final payment is capped at a maximum of 200% of the individual target amount agreed in each employment contract.

The Supervisory Board has identified the two key financial figures EBITDA and FCF as relevant target parameters. EBITDA is an industry-standard and frequently used measure of operating earnings, which allows a high degree of comparability with other businesses in the media industry and is also regularly used on the capital market for enterprise valuations on a multiplier basis. For shareholders, FCF is also an important measure of the cash and cash equivalents generated with operating business and after the deduction of investments, which are available for debt service or distributions to shareholders. Equally, FCF is an important indicator for measuring the cash return on investments and a common basis for the calculation of cashflow-based enterprise valuations. ProSiebenSat.1 Media SE reports both key financial figures, EBITDA and FCF, in the regular financial reporting for ProSiebenSat.1 Group.

009 / How the Short Term Incentive works

EBITDA at Group level

EBITDA at Group level is included in the Short Term Incentive with a weighting of 50% for the purposes of determining target achievement.

The EBITDA target value is set annually by the Supervisory Board in EUR and is derived from budget planning for ProSiebenSat.1 Group.

Where necessary, to determine the target achievement, the actual Group EBITDA reported by ProSiebenSat.1 Media SE will be adjusted for effects arising from significant changes in IFRS accounting standards, from unplanned effects from M&A transactions conducted within the reporting period, and from measurements of Group-wide, multi-year variable compensation plans. This allows the Supervisory Board to correct potential distortions in target achievement. No further adjustment is provided for.

To measure the target achievement, the actual EBITDA as reported in the relevant audited and approved consolidated financial statements of ProSiebenSat.1 Media SE, subject to the above adjustments, is compared with the target value for the respective financial year.

If the actual EBITDA corresponds to the target value, the target achievement is equal to 100%. The target achievement is equal to 0% if there is a negative deviation from the target EBITDA of 10% or more. To reach the maximum target achievement of 200%, the actual EBITDA must exceed target EBITDA by 10% or more. Intermediate values will be linearly interpolated. The EBITDA target achievement curve is symmetrically designed, meaning that an over- or underachievement of the target will be reflected evenly.

010 / Reported EBITDA Target Achievement Curve

Free cash flow (FCF) at Group level

FCF at Group level is likewise included in the Short Term Incentive with a weighting of 50% for the purposes of determining target achievement.

The FCF target value is set annually by the Supervisory Board in EUR and is derived from budget planning for ProSiebenSat.1 Group.

Where necessary, to determine the target achievement, the actual Group FCF reported by ProSiebenSat.1 Media SE will be adjusted for effects arising from significant changes in IFRS accounting standards and from M&A transactions. This allows the Supervisory Board to correct potential distortions in target achievement. No further adjustment is provided for.

To measure the target achievement, the actual FCF as reported in the relevant audited and approved consolidated financial statements of ProSiebenSat.1 Media SE, subject to the above adjustments, is compared with the target FCF for the respective financial year.

If the actual FCF corresponds to the target value, the target achievement is equal to 100%. The target achievement is equal to 0% if there is a negative deviation from the target FCF of 25% or more. To reach the maximum target achievement of 200%, the actual FCF must exceed target FCF by 25% or more. Intermediate values will be linearly interpolated. The FCF target achievement curve is symmetrically designed, meaning that an over- or underachievement of the target will be reflected evenly.

011 / Reported Free Cash Flow (FCF) Target Achievement Curve

Modifier

To determine the individual and collective performance of the Executive Board members, the Supervisory Board assessed both the achievement of individual targets and the Executive Board members’ contribution to the fulfillment of collective targets on the basis of criteria defined in advanced. Examples of relevant criteria include customer satisfaction, corporate social responsibility, corporate governance and strategic projects, but also other key financial figures of the Group or segments. If targets relate to key financial figures of ProSiebenSat.1 Group, target achievement is determined on the basis of the audited and approved Consolidated Financial Statements for the financial year in question. The resulting modifier for adjusting the size of the Short Term Incentive can range between 0.8 and 1.2. The modifier therefore has a bonus/penalty effect. The individual and collective targets are agreed annually in advance in a target agreement between the Supervisory Board and Executive Board, with a maximum of five targets being defined each year.

Payment date

The Short Term Incentive is payable in the following year within a month of the audited and approved Consolidated Financial Statements for the financial year in question becoming available and is paid out with the next monthly salary.

Long Term Incentive (Performance Share Plan)

The Long-Term Incentive is designed as multi-year variable compensation in the form of virtual shares (performance share units). Tranches are granted annually, each with a four-year performance period. Payout occurs in cash in year five, the year following the end of the performance period. Instead of a payout in cash, the Company reserves the right to alternatively choose a settlement with own shares and to deliver a corresponding number of shares in the Company. However, in the interests of its shareholders, the Company will likely only make use of this option if the currently unfavorable tax treatment at the Company level for equity settlement is repealed.

The payout depends on the development of ProSiebenSat.1 Media SE’s share price as well as on the Company’s internal and external performance. The Company’s performance is measured based on adjusted net income at Group level as well as the relative total shareholder return (TSR — shareholder return for ProSiebenSat.1 Media SE shares compared to shareholder return for companies in the selected comparison index), each with a weighting of 50%. The Performance Share Plan is issued in annual tranches, each with a performance period of four years.

The company performance is on the one hand based on the metric adjusted net income. This is an important performance indicator for the Group and serves, among other functions, as the metric that underlies the dividend policy and the resulting amounts that are distributed to shareholders. ProSiebenSat.1 Media SE publishes the adjusted net income as part of the regular financial reporting for the ProSiebenSat.1 Group. On the other hand, the company performance is determined using relative TSR, as this performance metric compares shareholder return for ProSiebenSat.1 Media SE shares with the shareholder return for a relevant peer group. The relative TSR takes account of the share price development and dividends paid to shareholders over the four-year performance period.

An individual assignment value is defined in the employment contract for each member of the Executive Board. A number of performance share units (PSUs) corresponding to the assignment value is granted on the first day of a financial year, usually on the basis of the volume-weighted average XETRA closing price of the ProSiebenSat.1 Media SE share over the preceding thirty trading days (in deviation from this general rule and in light of the fact that the Performance Share Plan was first instituted during 2018, the assignment date for the 2018 Performance Share Plan is June 29, 2018). Following the end of the four-year performance period, the granted performance share units are converted into a final number of performance share units according to a conversion factor, which is determined according to the weighted target achievement for adjusted net income and the relative TSR. The payout amount for each performance share unit is equal to the volume-weighted average XETRA closing price of ProSiebenSat.1 Media SE’s shares over the 30 trading days preceding the end of the performance period, plus cumulative dividend payments over the performance period on the ProSiebenSat.1 Media SE share. This amount is limited per tranche to a maximum of 200% of the individual grant value (Cap). In case of a settlement in own shares, the payout amount will be converted, based on the average share price noted above, into a corresponding number of shares in the Company and delivered to the beneficiary.

012 / How the Performance Share Plan works

Adjusted net income at Group level

With a weighting of 50%, the Group adjusted net income determines the target achievement in the Performance Share Plan. That is, 50% of the final number of performance share units are dependent on the average target achievement for the Group adjusted net income over the four-year performance period.

The average annual adjusted net income target achievement over the four-year performance period is used to determine the target achievement for the Group adjusted net income at the end of a tranche. The adjusted net income target value for each of the financial years within the performance period is set annually by the Supervisory Board in EUR and is derived from budget planning for ProSiebenSat.1 Group.

Where necessary, to determine the target achievement, the actual Group adjusted net income reported by ProSiebenSat.1 Media SE will be adjusted for effects arising from significant changes in IFRS accounting standards and unplanned effects from M&A transactions conducted within the reporting period (alongside related financing effects).

To measure the target achievement, the actual adjusted net income as reported in the relevant audited and approved Consolidated Financial Statements of ProSiebenSat.1 Media SE, subject to the above adjustments, is compared with the target adjusted net income for the respective financial year.

If the actual adjusted net income corresponds to the target value, the target achievement is equal to 100%. The target achievement is equal to 0% if there is a negative deviation from the target adjusted net income of 20% or more. To reach the maximum target achievement of 200%, the actual adjusted net income must exceed target adjusted net income by 20% or more. Intermediate values will be linearly interpolated. The adjusted net income target achievement curve is symmetrically designed, meaning that an over- or underachievement of the target will be reflected evenly.

013 / Adjusted Net Income Target Achievement Curve

Relative total shareholder return (TSR)

In addition, 50% of the final number of performance share units are dependent on the relative TSR of ProSiebenSat.1 Media SE’s shares over the four-year performance period, compared with STOXX Europe 600 Media companies. In terms of the TSR performance metric, this index represents the relevant benchmark for ranking the shareholder return of ProSiebenSat.1 Media SE’s shares relative to the shareholder return of companies in the selected index. To determine this, the TSR of ProSiebenSat.1 Media SE’s shares and those of the peer companies’ shares are placed in rank order, whereby ProSiebenSat.1 Media SE’s relative positioning is expressed in terms of the achieved percentile rank.

If the relative TSR achieved by ProSiebenSat.1 Media SE corresponds to the median (50th percentile) of the peer group, the target achievement is equal to 100%. If the positioning is at or lower than the 25th percentile, the target achievement is equal to 0%. To reach the maximum target achievement of 200%, at least the 90th percentile needs to be achieved. Intermediate values will be linearly interpolated for both positive and negative deviations.

014 / Relative TSR Target Achievement Curve

Payment date

Each respective tranche of the Long Term Incentive is paid out or settled, as the case may be, in the following year, after the audited and approved Consolidated Financial Statements for the final financial year of the four-year performance period become available.

Further information on the Performance Share Plan can be found in the Notes, Note 33 “Share-based payments”, page 220.

Obligations to acquire and hold shares in the Company (share ownership guidelines)

In order to strengthen the equity culture and bring the interests of the Executive Board and shareholders into even greater alignment, obligations to acquire and hold shares in the Company are being introduced for the members of the Executive Board. Each Executive Board member is obliged to acquire shares in ProSiebenSat.1 Media SE with a value totaling 200% (chairman of the Executive Board) or 100% (other Executive Board members) of the annual fixed gross basic salary and to hold these shares at least until the end of their appointment as a member of the Executive Board. Until the required levels are reached, the Executive Board members are obliged to invest at least 25% of the annual payout from the Short Term Incentive (performance bonus) and the Long Term Incentive (Performance Share Plan) in ProSiebenSat.1 Media SE shares; payments from the variable compensation elements of the previous compensation system (former performance bonus, Mid-Term Incentive and Group Share Plan) are not subject to the investment obligation. This will therefore apply for the first time when the 2018 performance bonus is paid out in financial year 2019. Further information on shares in the Company held by the Executive Board can be found in the Corporate Governance Report.

Company pension

The configuration of the Company pension remains unchanged. Pension agreements were signed for all members of the Executive Board: For the period of the employment relationship, the Company pays an annual total contribution into the personal pension account managed by the Company. The total contribution made by the Company is equivalent to 20% of the respective fixed annual gross salary. Each member of the Executive Board has the right to pay any additional amount into the pension account in the context of deferred compensation. There are no further payments after the end of the employment relationship. The Company guarantees the paid-in capital and an annual interest of 2%. The amounts paid-in are invested on the money and capital markets. A monthly retirement pension or alternatively a one-off retirement payment is paid if the Executive Board member reaches the age of 60, or 62 in the case of Max Conze, Dr. Jan Kemper, Sabine Eckhardt, Jan David Frouman and Christof Wahl, and has been a member of the Executive Board for at least three full years. This entitlement also arises in the case of permanent disability. The monthly retirement pension is derived from the actuarially calculated life-long pension as of the time of the entitlement to benefits. If no monthly retirement pension is paid, then a retirement payment is made in the amount of the guaranteed capital as a one-off payment (or in up to ten equal annual installments).

Clawback

In the new compensation system, all variable compensation components for Executive Board members are still forward-looking and are not paid out until after the end of the plan term. Until then, they also reflect negative value risks at the expense of the variable compensation.

Moreover, the respective employment contracts clearly state that potential claims on the part of the Company against Executive Board members from Section 93 (2) of the Stock Corporation Act are unaffected. According to this provision, Executive Board members who neglect their duties are obliged to compensate the resulting damage as joint and several debtors.

Non-performance-based fringe benefits

In addition, Executive Board members receive other non-performance-based fringe benefits (particularly, the provision of company cars, group accident insurance and occasionally chauffeur services, flights home and benefits for the maintenance of two households).

Commitments in the event of termination of Executive Board employment

Premature termination without good cause

If the employment contracts of Executive Board members are terminated prematurely by the Company without good cause, these contracts provide for a severance payment amounting to two years’ worth of total compensation as defined by section 4.2.3 of the GCGC; however, this may not exceed the amount of compensation that would have been paid until the end of the contract period.

Premature termination in the event of a change of control

The contracts of Executive Board members contain change of control clauses in the event of a change of control at the Company. A change of control as defined in the agreements of the Executive Board members takes place (i) if control is acquired within the meaning of takeover law, i.e. at least 30% of the voting rights in the Company are acquired by the acquirer, (ii) if the merger of the Company is implemented with the Company as the transferring legal entity, or (iii) if a control agreement comes into force with the Company as the dependent entity. In the event of a change of control, Executive Board members have the right to terminate their employment contract with three months’ notice at the end of the month and resign from the Executive Board if the change of control significantly affects the position of these Executive Board members. If this right of termination is exercised, the Executive Board members shall receive a payment in cash that is to be added in full to any waiting allowances. Compensation in cash corresponds to three years’ remuneration, but shall not exceed remuneration for the remainder of the employment contract discounted to the termination date. When determining this cash settlement, fixed remuneration for the last financial year that Executive Board members are contractually entitled to, the performance bonus, multi-annual compensation components and pension contributions are to be regarded as annual compensation.

Ongoing compensation elements from the replaced compensation system up to 2017

The compensation system for the Executive Board members of ProSiebenSat.1 Media SE in place until the end of 2017 contained two multi-year variable compensation components, which have effects beyond the 2017 performance period.

Group Share Plan

The Group Share Plan was granted to the Executive Board members for the last time in financial year 2017. It was a multi-year variable compensation instrument similar to the Performance Share Plan issued since 2018, in which virtual shares were issued to the Executive Board members in annual tranches each with a four-year performance period. Please refer to the 2017 Compensation Report for more details.

As of the end of 2018, the Group Share Plans from 2015 (with the performance period 2015 – 2018), from 2016 (with the performance period 2016 – 2019) and from 2017 (with the performance period 2017 – 2020) are still outstanding. The required minimum values for the Group’s consolidated net income and EBITDA have so far been achieved for each year of the respective four-year performance period of the outstanding Group Share Plans. The respective annual conversion factors are 105% for financial year 2015 (Group Share Plan 2015), likewise 105% for financial year 2016 (Group Share Plans 2015 – 2016), and 78% for financial year 2017 (Group Share Plans 2015 – 2017). For financial year 2018, the annual conversion factor is 56% (Group Share Plans 2015 – 2017). The PSU conversion factor (calculated as the average annual conversion factor from all four years) for the completed four-year performance period of the Group Share Plan 2015 thus comes to 86% now. The PSU conversion factors for the respective four-year performance periods of the Group Share Plans 2016 and 2017 accordingly cannot be calculated and reported until the end of the respective financial years. In the previous year, the PSU conversion factor of the Group Share Plan 2014 for the completed four-year performance period was 100%.

Further information on the Group Share Plan can be found in the Note 33 “Sharebased payments”, page 220.

Mid-Term Incentive Plan

The Mid-Term Incentive Plan (MTI) had a three-year plan term from financial year 2016 to the end of financial year 2018 (MTI 2016 – 2018). It was a medium-term compensation instrument, payable in cash to members of the Executive Board as well as selected other executives. The Mid-Term Incentive Plan had a three-year plan term starting in the financial year 2016. Please refer to the 2017 Compensation Report for more details.

The MTI was the second multi-year compensation component and was canceled without replacement as part of the redesign of Executive Board compensation, so it will not be reinstituted. For this reason, the MTI 2016 – 2018 is to be settled in cash. To this end, it was agreed that each Executive Board member would receive a payment of 104% of the respective MTI 2016 – 2018 target bonus. The payment will be made in May 2019 in accordance with the terms and conditions of the plan.

In the summary below, the new compensation system in place since the revision in financial year 2018 is compared to the system valid until the end of 2017:

Executive Board compensation for the financial year 2018

Variable compensation — degree of target achievement

The Supervisory Board has taken the desire for transparency regarding compensation decisions on board and has decided to report an overview of the degree of target achievement.

Performance bonus

The performance bonus is calculated on the basis of the target achievement (0% - 200%) identified for the financial year for EBITDA and FCF, both at Group level, and a modifier (0.8 to 1.2) for the assessment of the individual and collective performance of the Executive Board members. The final payment is capped at a maximum of 200% of the individual target amount agreed in each employment contract.

The Supervisory Board has determined the following target achievement for financial year 2018 with regard to EBITDA and FCF, each with a weighting of 50%:

To calculate target attainment for financial year 2018 in the target parameters of EBITDA at Group level and FCF at Group level, the Supervisory Board primarily adjusted for material reconciling items from M&A activities.

For the modifier in financial year 2018, the Supervisory Board agreed collective targets with the Executive Board members, namely the development of a corporate social responsibility strategy and the redefinition of the corporate culture as part of the reorganization in 2018. The Executive Board members’ individual targets for the modifier include amongst others the definition and implementation of saving measures as part of the reorganization and the achievement of revenue and EBITDA targets of the respective Executive Board areas.

Based on the overall assessment of the individual and collective performance of the Executive Board members, the Supervisory Board assessed the modifier for adjusting the performance bonus as follows: Conrad Albert 1.2 and Jan David Frouman 0.8.

Taking the target achievement for EBITDA and FCF and the respective modifiers into account results in the following overall target achievement for the performance bonus in financial year 2018: Conrad Albert 76.8% and Jan David Frouman 53.9%.

Max Conze is receiving a pro rata, non-performance-based performance bonus as annual variable compensation for financial year 2018. To satisfy the entitlement to the performance bonus for financial year 2018, Dr. Jan Kemper and Sabine Eckhardt, departing as of March 31, 2019 respectively April 30, 2019, receive a payment which is fixed in their individual termination agreements (for further information please refer to “Notes on the Compensation of Departed or Departing Executive Board Members”.

Performance Share Plan

The Performance Share Plan was granted to the Executive Board members for the first time in financial year 2018 and replaced the Group Share Plan, which previously acted as the Long Term Incentive. Target achievement is measured based on adjusted net income at Group level as well as the relative total shareholder return (TSR), each with a weighting of 50%. The target achievement for adjusted net income equals the average annual target achievement for the four financial years of the respective plan term. For the Performance Share Plan 2018 the target achievement average is relevant for 2018 to 2021. For financial year 2018, target achievement in relation to adjusted net income was 88%.

The relative TSR takes account of the share price development over the four-year performance period and is measured only at the end of the four-year performance period. If target achievement had been measured at the end of the first twelve months, it would have been 0%.

The final target achievement with regard to adjusted net income at Group level and TSR for the four-year performance period of the 2018 Performance Share Plan can therefore not be calculated until after the end of the final financial year of the four-year performance period.

Compensation of Executive Board members for financial year 2018 under GAS 17

The following total compensation for Executive Board members in office in the financial year 2018 was determined under GAS 17:

Notes on the compensation of departed or departing Executive Board members

Thomas Ebeling left the Executive Board as of February 22, 2018. His employment contract, which would have been effective until June 30, 2019, also ended effective February 22, 2018. In accordance with the termination agreement, Thomas Ebeling’s contractual compensation continued to be paid unchanged until the termination date. His compensation entitlements for the remaining term of the employment contract were paid out in the full amount of EUR 7.1 million as a severance payment following the termination date and, in the case of the contractual pension contributions, continued normally for the remaining term in accordance with the termination agreement. The following specific provisions were made in the termination agreement in this regard: The regular fixed compensation was granted up to and including February 2018 and a total of EUR 1.3 million paid as a severance payment for the remaining term of the employment contract (March 2018 to June 2019). The performance bonus was settled regularly for the last time for 2017. For the full year 2018 and pro rata temporis for the period up to and including June 2019, the performance bonus was instead paid on the basis of assumed target achievement of 100% as severance totaling EUR 1.5 million. In addition, the total amount of the non-cash benefit from the option to privately use the company car for the period from the termination date to the end of June 30, 2019, amounting to EUR 20,384 was paid out as severance. The contractual remuneration of the pension agreement continued unchanged for the remaining term of the contract; pension contributions of EUR 266,666.67 were attributed to the period from March 2018 up to and including June 2019. Thomas Ebeling’s multi-year compensation components were settled in cash following the termination date in accordance with the termination agreement, provided the plan term had not yet expired as of the termination date. The following specific agreement was made on this point: Thomas Ebeling’s participation in the Mid-Term Incentive Plan was paid off at the allocated amount of EUR 1.5 million with a plan term from 2016 to 2018. In accordance with his employment contract, Thomas Ebeling was owed an annual allocation of performance share units (PSUs) worth EUR 1.0 million, each with a four-year performance period, under the Group Share Plan. The PSUs allocated in 2014, whose performance period ended at the end of 2017, were settled normally. The PSUs allocated in 2015 and 2016 were settled at the allocated amount; the allocated amount was likewise paid instead of the outstanding allocation for 2017 and 2018. With regard to the provisions on vesting, which provide for 25% vesting at the end of each year of the four-year performance period, the measurement of the PSUs assumed the continuation of the employment contract for the remaining term until June 2019. Accordingly, a settlement was only paid if the corresponding PSUs were to become vested by then. This gave a settlement amount totaling EUR 2.5 million for the allocations or allocation entitlements of the years 2015 to 2018. According to the termination agreement, the planned severance amounts also compensated Thomas Ebeling’s handover work for a transitional period of three months after the termination date, in which he remained available to the Company to an appropriate extent for information and other handover and consulting tasks associated with his previous work. Furthermore, this also compensated Thomas Ebeling’s post-contractual non-competition clause agreed for the period up to and including June 2019, so the Company did not have to pay a separate waiting allowance for this.

Christof Wahl stepped down from the Executive Board as of July 31, 2018. His employment contract, which would have had been effective until April 30, 2019, also ended effective July 31, 2018. In accordance with his termination agreement, Christof Wahl received a severance payment of EUR 2.6 million, which was made up of the following elements: fixed remuneration of EUR 382,500 for the months from August 2018 to April 2019, performance bonus of EUR 433,333 for the months from January 2018 to April 2019 (assuming 100% target achievement), and EUR 200,000 as compensation for the non-participation in the Long Term Incentive Plan for 2018, which were payable on the termination date. Christof Wahl’s participation in the Mid-Term Incentive Plan was paid off at the allocated amount of EUR 1.0 million with a plan term from 2016 to 2018. Concerning the Group Share Plan, the termination agreement stipulates that Christof Wahl is still participating in the Group Share Plan in accordance with the terms and conditions of this plan with the PSUs issued up to the termination date, but on the condition that they are treated as if they would have vested not before April 30, 2019. Accordingly, the PSUs allocated under GSP 2016 were 75% vested on his departure, the PSUs allocated under GSP 2017 50%; a provision of EUR 474,712 was recognized for this. All PSUs that were not vested upon departure expired without compensation. For 2018, there was no further entitlement to allocation of PSUs under the Long Term Incentive Plan. In addition, Christof Wahl still received pension contributions of EUR 76,500 for August 2018 to April 2019, whereby for the purposes of the provisions of the pension agreement with regard to vesting Christof Wahl was treated as if the employment relationship had not ended until the regular end of the contract on April 30, 2019. It was also agreed that the post-contractual non-competition clause applies not for one year but for the period from the termination date at the end of July 31, 2018, to the end of April 30, 2019, and that the waiting allowance is settled by the severance payment.

Jan David Frouman will leave the Executive Board as of February 28, 2019. His employment contract, which has a term until February 28, 2019, will also end effective February 28, 2019, and will not be extended. Jan David Frouman is to receive no severance payment. The performance bonus for 2018 is calculated and paid out based on the actual targets achieved in accordance with the provisions contained in his employment contract. Jan David Frouman will receive a non-performance-based pro rata amount worth 2/12 of the target bonus for the performance bonus (EUR 66,667) as a performance bonus for 2019. The target bonus is based on the assumption that 100% of the target for the performance bonus has been achieved and a modifier of 1. The PSUs issued to Jan David Frouman under the Group Share Plan (GSP) in 2016 and 2017 and the PSUs issued from the Performance Share Plan (PSP) in 2018 will be vested at 75% (GSP 2016), 50% (GSP 2017) and 100% (PSP 2018) when he leaves the Company and will be settled as planned after the end of the respective four-year performance period. All PSUs that are not vested upon departure will expire without compensation. In accordance with his employment contract, Jan David Frouman will receive an allocation from the Performance Share Plan in financial year 2019, which will be vested at 2/12 upon his departure. All PSUs that are not vested upon departure will expire without compensation. The Mid-Term Incentive Plan will be settled at 104% of the MTI target bonus, i.e. EUR 1.04 million. In addition, the Company will waive the post-contractual non-competition clause, so Jan David Frouman will be owed a waiting allowance totaling EUR 0.3 million for the months of March and April 2019.

Dr. Jan Kemper will leave the Executive Board as of March 31, 2019. The termination of his employment contract, with a remaining term until May 31, 2020, also takes effect on March 31, 2019. According to the termination agreement, in addition to the regular fixed compensation up to and including March 2019, Dr. Jan Kemper receives further payments totaling EUR 3.5 million, which are made up as follows: The regular fixed compensation for the remaining term of the employment contract (April 2019 to May 2020) of EUR 1.1 million will be granted as severance payment. To satisfy his entitlement to the performance bonus for financial year 2018 Dr. Jan Kemper receives a payment of EUR 0.4 million. For the full year 2019 and pro rata temporis for the period up to and including May 2020, the performance bonus will be paid on the basis of assumed target achievement of 100% and a modifier of 1 as severance totaling EUR 0.7 million. In addition, Dr. Jan Kemper still receives pension contributions of EUR 228,667 for April 2019 to May 2020, whereby for the purposes of the provisions of the pension agreement with regard to vesting Dr. Jan Kemper is treated as if the employment relationship had not ended until the regular end of the contract on May 31, 2020. In respect to the multi-year compensation components of Dr. Jan Kemper, the following was agreed: Concerning the Group Share Plan, the termination agreement stipulates that Dr. Jan Kemper still participates in the Group Share Plan in accordance with the terms and conditions of this plan with the PSUs issued up to the termination date, but on the condition that they are treated as if they would have vested not before May 31, 2020. Accordingly, the PSUs allocated under GSP 2017 were 75% vested on his departure; a provision of EUR 97,295 was recognized for this. All PSUs that were not vested upon departure expire without compensation. In accordance with the employment contract, Dr. Jan Kemper is owed an annual allocation of PSUs worth EUR 1.0 million, each with a four-year performance period, under the Performance Share Plan. The PSUs issued in 2018 are 100% vested and will be settled after the end of the four-year performance period. Instead of the outstanding allocation for 2019 — and pro rata temporis until the end of May 31, 2020 — the allocated amount is paid for 2020. With regard to the provisions on vesting, which provide for one twelfth vesting at the end of each month of the first year of the four-year performance period, the measurement of the PSUs assumes the continuation of the employment contract for the remaining term until May 2020. Accordingly, a settlement is only paid if the corresponding PSUs are to become vested by then. This gives a settlement amount totaling EUR 1.4 million for allocation entitlements of the years 2019 and 2020. The severance entitlement agreed in the employment contract of Dr. Jan Kemper in the Mid-Term Incentive Plan with a plan term from 2016 to 2018 at 104% of the MTI target bonus, i.e. EUR 0.7 million is not impacted by the termination agreement. It was also agreed that the post-contractual non-competition clause applies for one year for the period from the termination date at the end of March 31, 2019, and that the waiting allowance is settled by the severance payment.

Sabine Eckhardt will leave the Executive Board as of April 30, 2019. The termination of her employment contract, with a remaining term until December 31, 2019, also takes effect on April 30, 2019. According to the termination agreement, in addition to the regular fixed compensation up to and including April 2019, Sabine Eckhardt receives further payments totaling EUR 2.0 million, which are made up as follows: The regular fixed compensation will be granted up to and including April 2019 and for the remaining term of the employment contract (May 2019 to December 2019) of EUR 0.5 million is granted as severance payment. To satisfy her entitlement to the performance bonus for financial year 2018, Sabine Eckhardt receives a payment of EUR 0.3 million. For the full year 2019, the performance bonus will be paid on the basis of assumed target achievement of 100% and a modifier of 1 as severance totaling EUR 0.4 million. In addition, Sabine Eckhardt still receives pension contributions of EUR 108,000 for May 2019 to December 2019, whereby for the purposes of the provisions of the pension agreement with regard to vesting Sabine Eckhardt was treated as if the employment relationship had not ended until the regular end of the contract on December 31, 2019. In respect to the multi-year compensation components of Sabine Eckhardt the following was agreed: Concerning the Group Share Plan, the termination agreement stipulates that Sabine Eckhardt still participates in the Group Share Plan in accordance with the terms and conditions of this plan with the PSUs issued up to the termination date, but on the condition that they are treated as if they would have vested not before December 31, 2019. Accordingly, the PSUs allocated under GSP 2015 and 2016, which she has from work performed before she joined the Executive Board were 100% vested on her departure; a provision of EUR 9,464 was recognized for this. The PSUs allocated under GSP 2017, which she received in her function as member of the Executive Board, are 75% vested on her departure; a provision of EUR 97,295 was recognized for this. All PSUs that were not vested upon departure expire without compensation. In accordance with this employment contract, Sabine Eckhardt is owed an annual allocation of PSUs worth EUR 0.8 million, each with a four-year performance period, under the Performance Share Plan. The PSUs issued in 2018 are 100% vested and will be settled after the end of the four-year performance period. Instead of the outstanding allocation for 2019, the allocated amount is paid. With regard to the provisions on vesting, which provide for one twelfth vesting at the end of each month of the first year of the four-year performance period, the measurement of the PSUs assumes the continuation of the employment contract for the remaining term until December 2019. Accordingly, a settlement is only paid if the corresponding PSUs are to become vested by then. This gives a settlement amount totaling EUR 0.8 million for allocation entitlements for 2019. The severance entitlement agreed in the employment contract of Sabine Eckhardt in the Mid-Term Incentive Plan with a plan term from 2016 to 2018 at 104% of the MTI target bonus, i.e. EUR 0.7 million is not impacted by the termination agreement. It was also agreed that the post-contractual non-competition clause applies not for one year but for the period from the termination date at the end of April 30, 2019, to the end of December 31, 2019, and that the waiting allowance is settled by the severance payment.

Additional disclosures on share-based payment instruments (Group Share Plan and Performance Share Plan)

The performance share units (PSUs) granted to active members of the Executive Board for their work as members of the Executive Board developed as follows in the financial year 2018:

In the financial year 2018, 57,730 performance share units from the Group Share Plan were exercised and 76,849 performance share units from the Group Share Plan expired. For more information on the performance share units granted for the financial year 2018 from the Performance Share Plan, please refer to Note 33 in the Note “Sharebased payments”, page 155.

Further information on shares in the Company held by the Executive Board can be found in the Corporate Governance Report.

Other compensation components

The Company has granted neither loans nor provided guaranties or warranties to the members of the Executive Board. Conrad Albert receives one-time compensation of EUR 73,000 for his special services in connection with the CEO transition phase in financial year 2018.

Compensation of Executive Board members for the financial year 2018 in accordance with the German Corporate Governance Code (GCGC)

The GCGC recommends the individual disclosure of specific compensation components for each Executive Board member according to certain criteria. It further recommends the use of the template tables included in the GCGC for their presentation — in some cases deviating from GAS 17.

Benefits granted in accordance with GCGC

The table below shows the benefits that have been granted for the financial year 2018, including fringe benefits and the minimum and maximum compensation achievable in the financial year 2018 that were granted to active members of the Executive Board for their work as Executive Board members. In deviation from the presentation of total compensation according to GAS 17, to comply with the GCGC the annual variable compensation must be disclosed as the target value, i.e. the value granted to the Executive Board member in the event of 100% target achievement. The degree of respective target achievement for a financial year, i.e. the extent to which the amount payable in the event of 100% target achievement was exceeded or fallen short of, is obtained by comparing the variable compensation granted for a financial year with the corresponding disclosures on the variable compensation actually received for the financial year in question in the receipt table according to GCGC. Furthermore, the pension cost, i.e. the service cost in accordance with IAS 19, must be included in total compensation in accordance with GCGC.

For information on the termination agreements of Thomas Ebeling, Christof Wahl, Dr. Jan Kemper and Sabine Eckhardt as well as on the departure of Jan David Frouman, please refer to “Notes on the Compensation of Departed or Departing Executive Board Members”.

Receipt in accordance with GCGC

As the compensation granted to members of the Executive Board for the financial year is not always accompanied by a payment in the respective financial year, a separate table — in accordance with the relevant recommendation of the GCGC — shows the amount received by members of the Executive Board for work performed in the financial year.

In line with GCGC recommendations, the fixed compensation and annual variable compensation must be recognized as receipts for the respective financial year. According to the GCGC, share-based payment is considered received at the date and value relevant to German tax law.

Following the recommendations of the GCGC, when disclosing receipts the pension cost in the sense of service cost according to IAS 19 equates to the contributions made, even though strictly speaking it is not an actual receipt.

Post-contractual non-competition clause

A post-contractual non-competition clause was agreed for all Executive Board members covering one year following the termination of the employment contract. For information relating to departed respectively departing Executive Board members please refer to “Notes on the Compensation of Departed or Departing Executive Board Members”.

If the post-contractual non-competition clause applies, Executive Board members receive a monthly waiting allowance for the duration of the post-contractual non-competition agreement, which in each case amounts to 1/12 of 75% of the annual remuneration amount most recently received. In order to determine the waiting allowance, the sum of fixed remuneration, the performance bonus and, if applicable, additional multi-annual compensation components that have been granted are to be regarded as annual compensation. This calculation assumes a target achievement of 100% for the performance bonus and the allocated amount of multi-year compensation components or, if no annual allocation has been made, the pro rata allocated value attributable to one year of the plan term. Any income generated from work performed while the non-competition clause is in force is to be offset against in the waiting allowance — based on a one-year period — if it exceeds 50% of the annual compensation most recently obtained. The Company may waive the non-competition clause before the end of the agreement. In this case, the Executive Board member is entitled to a waiting allowance only for the period between the end of the agreement and the end of a six-month period after the waiver has been received. Sections 74 ff. of the German Commercial Code also apply accordingly.

The following table shows the net present value of compensation to be paid in connection with the post-contractual non-competition clause. This consists of the present value of the amounts that would be paid assuming that Executive Board members were to leave the Company at the end of the term of their respective current contracts and that the contractual benefits received immediately before the termination of their contracts equal their most recent annual compensation. It can be assumed that actual compensation resulting from the post-contractual non-competition clause will differ from the amounts presented in this table. This depends on the exact date on which the employment contract is terminated and the level of compensation received on this date.

Total compensation of former Executive Board members

Total compensation of EUR 14.5 million was paid to former members of the Executive Board in the financial year 2018 (previous year: EUR 4.7 million). This includes the payment of 109,046 performance share units from the Group Share Plan 2014 amounting to EUR 2.5 million (previous year: EUR 2.6 million), the severance payment for Thomas Ebeling of EUR 6.9 million payable on the termination date (February 22, 2018), and the severance payment for Christof Wahl of EUR 2.0 million payable on the termination date (July 31, 2018). In accordance with the termination agreement, a provision of EUR 0.5 million was recognized for Christof Wahl’s participation in the Group Share Plan. In addition, Christof Wahl still received pension contributions of EUR 0.1 million and Thomas Ebeling of EUR 0.3 million. In addition, pension benefits of EUR 2.3 million (previous year: EUR 0.4 million) were paid to former Executive Board members. As of December 31, 2018, pension provisions for former members of the Executive Board in accordance with IFRS amounted to EUR 12.8 million (previous year: EUR 14.4 million). The provisions for Thomas Ebeling and Christof Wahl are shown in the table on total compensation of the Executive Board under GAS 17.

Provisions for pensions

In the financial year 2018, there were additions to pension provisions for active and former Executive Board members in accordance with IFRS. These amounted to EUR 0.8 million in total (previous year: EUR 1.5 million). EUR 0.7 million of this amount is attributable to current service costs (previous year: EUR 0.7 million), while EUR 0.5 million is attributable to interest expenses (previous year: EUR 0.5 million). EUR 0.5 million of this amount is attributable to actuarial losses (previous year: actuarial gains of EUR 0.04 million) while minus EUR 2.3 million is attributable to pension payments (previous year: minus EUR 0.4 million). Furthermore, deferred compensation in the amount of EUR 1.2 million (previous year: EUR 0.6 million) has been made in the past financial year. As of December 31, 2018, pension provisions for active and former Executive Board members totaled EUR 28.0 million (previous year: EUR 27.2 million).

D&O insurance

Executive Board members are covered by group liability insurance (D&O insurance). This D&O insurance covers the personal liability risk should Executive Board members be made liable for financial losses when exercising their professional functions for the Company. The insurance includes a deductible according to which an Executive Board member against whom a claim is made pays a total of 10% of the claim in each insured event, but not more than 150% of the respective fixed annual compensation for all insurance events in one insurance year. The relevant figure for calculating the deductible is the fixed remuneration in the calendar year in which the breach of duty occurred.

Compensation Paid to the Supervisory Board

Structure and Components of Supervisory Board Compensation

The Supervisory Board’s compensation is determined in the articles of incorporation of the Company.

Members of the Supervisory Board receive fixed annual compensation for each full financial year of their membership of the Supervisory Board. The fixed compensation amounts to EUR 250,000 for the chairman of the Supervisory Board, EUR 150,000 for the vice chairman and EUR 100,000 for all other members of the Supervisory Board. The chairman of a Supervisory Board committee receives additional fixed annual compensation of EUR 30,000; the additional fixed annual compensation for the chairman of the Audit and Finance Committee amounts to EUR 50,000. Members of the Supervisory Board also receive fixed annual compensation of EUR 7,500 for membership in a Supervisory Board committee. In addition, members of the Supervisory Board receive a meeting honorarium of EUR 2,000 for each meeting attended in person. For the chairman of the Supervisory Board, the meeting honorarium amounts to EUR 3,000 for each meeting attended in person. If multiple meetings are held on one day, the meeting honorarium is paid only once. No performance-based variable compensation is granted.

The current members of the Supervisory Board have declared to the Supervisory Board that they voluntarily undertake to each use 20% of their fixed remuneration granted on a yearly basis in accordance with article 14 (1) and (2) of the articles of incorporation (before deduction of taxes) in order to purchase shares in ProSiebenSat.1 Media SE every year, and to hold these for a period of four years which, however, shall not exceed the duration of their membership on the Supervisory Board of ProSiebenSat.1 Media SE; if they are re-elected, the obligation to hold these shares shall apply to their individual terms of office. With this self-commitment to invest in and hold ProSiebenSat.1 Media SE shares, the members of the Supervisory Board want to underline their interest in the long-term, sustainable success of the Company.

Further information on shares in the Company held by the Supervisory Board can be found in the Corporate Governance Report.

The Supervisory Board members received the following compensation for the financial year 2018:

In addition to this fixed annual compensation and meeting honoraria, the members of the Supervisory Board were reimbursed for all out-of-pocket expenses and value-added tax levied on their compensation and out-of-pocket expenses.

D&O insurance covers the personal liability risk should Board members be made liable for financial losses when exercising their functions. No deductible has been agreed for members of the Supervisory Board.

Compensation or benefits for services rendered in person, in particular for advisory and agency services, were not granted to Supervisory Board members in the 2018 financial year, with the exception mentioned below. In the fourth quarter of 2018, Erik Adrianus Hubertus Huggers worked as a consultant for 7TV Joint Venture GmbH, Munich (“7TV”). In this period, 7TV Joint Venture GmbH received consultancy services amounting to EUR 150,000 on a contractual basis from Erik Adrianus Hubertus Huggers. The contractual agreement was concluded for the fourth quarter of 2018 and ended on December 31, 2018. The Company has granted no loans to members of the Supervisory Board.