7 Remuneration System for the Management Board and Employees of the Group

7.1 CONVERTIBLE BONDS – 2013 PROGRAM

On April 1, 2013, MorphoSys AG granted the Management Board and members of the Senior Management Group convertible bonds with a total nominal value of € 225,000 and divided into 449,999 bearer bonds with equal rights from “Conditional Capital 2008-III”. The beneficiaries have the right to convert the bonds into Company shares. Each convertible bond can be exchanged for one of the Company’s bearer shares equal to the proportional amount of common stock, which currently stands at € 1. Exer­cise of the convertible bonds is subject to several conditions, such as the achievement of performance targets, the expiration of vesting periods, the exercisability of the conversion rights, the existence of an employment or service contract that is not under notice and the commencement of the exercise period.

The conversion price amounted to € 31.88 and was derived from the Company’s share price in the XETRA closing auction of the Frankfurt Stock Exchange on the trading day preceding the issue of the convertible bonds. The exercise of the conversion rights is admissible if, on at least one trading day during the lifetime of the convertible bonds, the share price of the Company has risen to more than 120 % of the price in the XETRA closing auction of the Frankfurt Stock Exchange on the trading day preceding the issue of the convertible bonds.

The exercise of the conversion rights is only admissible after the expiration of a four-year vesting period from the grant date. In the event of a change of control, the vesting period is shortened to two years from the grant date. For every year without a notice of termination of the employment relationship with the Company or an affiliated company, 25 % of the conversion rights become vested. In the event of a change of control, all unvested conversion rights become vested.

If an employment or service contract of a beneficiary is terminated without notice, no further conversion rights can be vested under the above mentioned vesting scheme. Thus, upon rendition of the notice, all conversion rights still unvested by this time will expire without substitution. In the event of a contractual notice of termination of such employment or service contract with the beneficiary or a mutually agreed dissolution contract, the previous sentence applies and becomes effective as of the date of termi­nation of the employment or service contract.

The following table shows the development of the convertible bond plans for Group employees in the 2016 and 2015 financial years.

Convertible Bonds Weighted- average Price (€)
Outstanding on January 1, 2015 530,847 29.58
Granted 0 0.00
Exercised (80,848) 16.79
Forfeited 0 0.00
Expired 0 0.00
Outstanding on December 31, 2015 449,999 31.88
     
Outstanding on January 1, 2016 449,999 31.88
Granted 0 0.00
Exercised 0 0.00
Forfeited (13,414) 31.88
Expired 0 0.00
Outstanding on December 31, 2016 436,585 31.88

From the grant date until December 31, 2016, one beneficiary left MorphoSys and, therefore, 13,414 convertible bonds were forfeited. As of December 31, 2016, the number of vested convertible bonds totaled 327,439 shares (December 31, 2015: 225,000 shares).

The following overview includes the weighted-average exercise price as well as information on the contract duration of significant groups of convert­ible bonds as of December 31, 2016.

Range of Exercise Prices Number Outstanding Remaining Contractual Life (in Years) Weighted- average Exercise Price (€) Number Exercisable Weighted- average Exercise Price (€)
€ 25.00 – € 40.00 436,585 3.25 31.88 327,439 31.88
436,585 3.25 31.88 327,439 31.88

The Group recognizes personnel expenses resulting from convertible bonds on a straight-line basis in accordance with IFRS 2 and IAS 32.28. The equity component of the convertible bonds is presented separately under additional paid-in capital. The corresponding amount is recognized as personnel expenses from convertible bonds. In 2016 and 2015, compensation expenses related to convertible bonds amounted to € 40,375 and € 839,906, respectively.

7.2 LONG-TERM INCENTIVE PROGRAMS

On March 31, 2016, the conditions of the long-term incentive plans (LTI plan) 2012, 2013, 2014 and 2015 for the Management Board and Senior Management Group were amended to include a six-month exercise period following the four-year vesting period, during which the Company can transfer the performance shares to the beneficiaries. Previously, under these plans, the performance shares were automatically allocated following the four-year vesting period. Beneficiaries can now choose the exercise date within the six-month exercise period. The plan modification had no impact on the fair value of the performance shares or on the period over which the personnel expenses are to be recognized.

7.2.1 2012 LONG-TERM INCENTIVE PROGRAM

On April 1, 2012, MorphoSys established a long-term incentive plan (LTI plan) for the Management Board and the Senior Management Group. The vesting period of this plan expired on April 1, 2016. According to IFRS 2, this program is considered a share-based payment program with settlement in equity instruments and is accounted for accordingly. The LTI plan is a performance-related share plan and is paid out in ordinary shares (performance shares) of MorphoSys AG if predefined key performance criteria are achieved. These criteria are approved annually by the Super­visory Board. The fulfillment of these criteria was set at 200 % for two years, 54 % for one year and 0 % for one year. The Supervisory Board set the “company factor” at 0.88, meaning the number of performance shares to be allocated is scaled by a factor of 0.88. This factor resulted in an adjustment of previously recognized personnel expenses of € –0.2 million in the 2016 financial year. Previously, personnel expenses resulting from the 2012 LTI program were recognized based on the assumption of a company factor of 1.0. Based on these terms and the company factor, a total of 88,663 performance shares of MorphoSys AG were transferred to the beneficiaries on October 4, 2016 after the expiration of the four-year vesting period. The Management Board received 57,967 performance shares (for further information, please see the tables titled “Shares” and “Performance Shares” in Item 7.3 “Related Parties”), the Senior Management Group received 27,813 performance shares and former members of the Senior Management Group, who have left the Company in the meantime, received 2,883 performance shares.

On October 1, 2012, MorphoSys established another long-term incentive plan (LTI plan) for Senior Management Group members. The vesting period of this plan expired on October 1, 2016. The terms of this plan were identical to the April 1, 2012 plan. The fulfillment of the performance criteria was set at 200 % for one year, 54.8 % for one year and 0 % for two years. The Supervisory Board set the “company factor” at 1.57, meaning the number of performance shares to be allocated is scaled by a factor of 1.57. This factor resulted in an adjustment of previously recognized personnel expenses of € 0.03 million in the 2016 financial year. Previously, personnel expenses resulting from the 2012 LTI program were recognized based on the assumption of a company factor of 1.0. Based on these terms and the company factor, a total of 2,292 performance shares of MorphoSys AG were transferred to the beneficiaries in October 2016 after the expiration of the four-year vesting period. The Senior Management Group received all of the 2,292 performance shares.

In 2016, personnel expenses from performance shares under the Group’s 2012 LTI plan amounted to € –158,752 (2015: € 108,619).

7.2.2 2013 LONG-TERM INCENTIVE PROGRAM

On April 1, 2013, MorphoSys established a long-term incentive plan (LTI plan) for the Management Board and the Senior Management Group. Accor­ding to IFRS 2, this program is considered a share-based payment program with settlement in equity instruments and is accounted for ac­cordingly. The LTI plan is a performance-related share plan and will be paid out in ordinary shares (performance shares) of MorphoSys AG if prede­fined key performance criteria are achieved. These criteria are evaluated annually by the Supervisory Board. The grant date was April 1, 2013 and the vesting/performance period is four years. If the predefined key performance criteria for the respective period are fully met, 25 % of the performance shares become vested in each year of the four-year vesting period. The number of performance shares vested each year will be reduced or increased to the extent that the performance criteria of the respective year have been achieved between only 50 % and 99.9 % (<100 %) or the achievement of the performance criteria has exceeded 100 % (maximum 200 %). If in one year the performance criteria are achieved by less than 50 %, no performance shares will become vested in that year. In any case, the maximum pay-out at the end of the four-year period is limited by a factor determined by the Group, which generally amounts to 1. However, in justified cases, the Supervisory Board may set this factor freely between 0 and 2, for example, if the level of payment is considered unreasonable in view of the Company’s general development. The right to receive a certain allocation of performance shares under the LTI plan occurs only at the end of the four-year vesting period.

If the number of repurchased shares is not sufficient for servicing the LTI plan, MorphoSys reserves the right to pay a certain amount of the LTI plan in cash in the amount of the performance shares at the end of the vesting period, provided the cash amount does not exceed 200 % of the fair value of the performance shares on the grant date.

If a member of the Management Board prematurely ceases to hold an office at the MorphoSys Group before expiration of the four-year performance period, the member (or the member’s heirs) is entitled to performance shares determined on a precise daily pro rata basis. If a Management Board member prematurely ceases to hold an office at the MorphoSys Group for good reason as defined by Sec. 626 Para. 2 of the German Civil Code (BGB) before expiration of the four-year performance period, the beneficiary will not be entitled to an allocation of performance shares. If a change of control occurs during the four-year vesting period, all performance shares will be considered fully vested. In each case above, the right to receive a certain allocation of performance shares under the LTI plan only occurs at the end of the four-year vesting period.

In April and May of 2013, MorphoSys repurchased 84,475 of its own shares on the stock exchange at an average price of € 33.43 per share. The repurchased shares can be used for all purposes named in the authorizations of the Annual General Meetings on May 19, 2011 and on May 23, 2014 and particularly for any existing or future employee participation schemes and/or to finance acquisitions. The shares may also be redeemed.

Of these shares, 61,601 were allocated to beneficiaries retroactively effective April 1, 2013. This included 36,729 performance shares for the Management Board (for further information, please see the table titled “Performance Shares” in Item 7.3 “Related Parties”) and 24,872 performance shares for the Senior Management Group. The number of performance shares allocated is based on the full achievement of performance criteria and a company factor of 1. On the grant date (April 1, 2013), the fair value of the performance shares was € 29.08 per share. No dividends were included in the determination of the fair value of the performance shares since the Group does not intend to distribute any dividends in the foreseeable future. From the grant date until December 31, 2016, two beneficiaries left MorphoSys and, therefore, 881 performance shares were forfeited. For the calculation of the personnel expenses resulting from share-based payments under the 2013 LTI plan, it was initially assumed that one beneficiary will leave the Company during the four-year period. In 2016, this assumption was updated.

On October 1, 2013, MorphoSys established another long-term incentive plan (LTI plan) for Senior Management Group members. The terms of the plan were identical to the April 1, 2013 plan. A total of 548 performance shares was allocated, and the fair value on the grant date was € 52.24 per share.

In 2016, personnel expenses from performance shares under the Group’s 2013 LTI plan amounted to € –23,571 (2015: € 299,024).

7.2.3 2014 LONG-TERM INCENTIVE PROGRAM

On April 1, 2014, MorphoSys established a long-term incentive plan (LTI plan) for the Management Board and the Senior Management Group. Accor­ding to IFRS 2, this program is considered a share-based payment program with settlement in equity instruments and is accounted for accor­dingly. The LTI plan is a performance-related share plan and will be paid out in ordinary shares (performance shares) of MorphoSys AG if predefined key performance criteria are achieved. These criteria are evaluated annually by the Supervisory Board. The grant date was April 1, 2014 and the vesting/performance period is four years. If the predefined key performance criteria for the respective period are fully met, 25 % of the performance shares become vested in each year of the four-year vesting period. The number of performance shares vested each year will be reduced or increased to the extent that the performance criteria of the respective year have been achieved between only 50 % and 99.9 % (<100 %) or the achievement of the performance criteria has exceeded 100 % (maximum 200 %). If in one year the performance criteria are met by less than 50 %, no performance shares will become vested in that year. In any case, the maximum pay-out at the end of the four-year period is limited by a factor determined by the Group, which generally amounts to 1. However, in justified cases, the Supervisory Board may set this factor freely between 0 and 2, for example, if the level of payment is regarded as unreasonable in view of the general development of the Company. The right to receive a certain allocation of performance shares under the LTI plan, however, occurs only at the end of the four-year vesting period.

If the number of repurchased shares is not sufficient for servicing the LTI plan, MorphoSys reserves the right to pay a certain amount of the LTI plan in cash in the amount of the performance shares at the end of the vesting period, provided the cash amount does not exceed 200 % of the fair value of the performance shares on the grant date.

If a member of the Management Board ceases to hold an office at the MorphoSys Group because of termination (or if the Management Board member terminates the employment contract), resignation, death, injury, disability, by reaching retirement age (receipt of a normal retirement pension, early-retirement pension or disability pension, as long as the requirements for the disability pension entitlement are met) or under other circumstances subject to the Supervisory Board’s discretion, the Management Board member (or the member’s heirs) is entitled to performance shares determined on a precise daily pro rata basis.

If a member of the Management Board ceases to hold an office at the MorphoSys Group for good reason as defined by Sec. 626 Para. 2 of the German Civil Code (BGB) and/or as defined by Sec. 84 Para. 3 of the German Stock Corporation Act (AktG), the beneficiary will not be entitled to performance shares.

If a change of control occurs during the four-year vesting period, all performance shares will become fully vested. In this case, the right to receive a certain allocation of performance shares under the LTI plan occurs only at the end of the four-year vesting period.

In March 2014, MorphoSys repurchased 111,000 of its own shares on the stock exchange at an average price of € 70.53 per share. The repurchased shares may be used for all purposes named in the authorizations of the Annual General Meetings on May 19, 2011 and May 23, 2014 and particularly for any existing or future employee participation schemes and/or to finance acquisitions. The shares may also be redeemed.

A total of 32,513 of these shares were allocated to beneficiaries on April 1, 2014 with 18,264 performance shares allocated to the Management Board (further details may be found in the table titled “Performance Shares” in Item 7.3 “Related parties”) and 14,249 performance shares to the Senior Management Group. The number of performance shares allocated is based on the full achievement of performance criteria and a company factor of 1. The fair value of the performance shares on the grant date (April 1, 2014) was € 62.17 per share. No dividends were included in the determination of the fair value of the repurchased shares performance shares because the Group does not intend to distribute any dividends in the foreseeable future. From the grant date until December 31, 2016, two beneficiaries left MorphoSys and, therefore, 889 performance shares were forfeited. For the calculation of the personnel expenses from share-based payments under the 2014 LTI plan, it was initially assumed that one beneficiary will leave the Company during the four-year period. In 2016, this assumption was updated.

In 2016, personnel expenses resulting from performance shares under the Group’s 2014 LTI plan amounted to € 178,518 (2015: € 647,941).

7.2.4 2015 LONG-TERM INCENTIVE PROGRAM

On April 1, 2015, MorphoSys established a long-term incentive plan (LTI plan) for the Management Board and the Senior Management Group. Accor­ding to IFRS 2, this program is considered a share-based payment program with settlement in equity instruments and is accounted for accor­dingly. The LTI plan is a performance-related share plan and will be paid out in ordinary shares (performance shares) of MorphoSys AG if prede­fined key performance criteria are achieved. These criteria are evaluated annually by the Supervisory Board. The grant date was April 1, 2015 and the vesting/performance period is four years. If the predefined key performance criteria for the respective period are fully met, 25 % of the performance shares become vested in each year of the four-year vesting period. The number of performance shares vested each year will be reduced or increased to the extent that the performance criteria of the respective year have been achieved between only 50 % and 99.9 % (<100 %) or the achievement of the performance criteria has exceeded 100 % (maximum 200 %). If in one year the performance criteria are met by less than 50 %, no performance shares will become vested in that year. In any case, the maximum pay-out at the end of the four-year period is limited by a factor determined by the Group, which generally amounts to 1. However, in justified cases, the Supervisory Board may set this factor freely between 0 and 2, for example, if the level of payment is regarded as unreasonable in view of the general development of the Company. The right to receive a certain allocation of performance shares under the LTI plan only occurs at the end of the four-year vesting period.

If the number of repurchased shares is not sufficient for servicing the LTI plan, MorphoSys reserves the right to pay a certain amount of the LTI plan in cash in the amount of the performance shares at the end of the vesting period, provided the cash amount does not exceed 200 % of the fair value of the performance shares on the grant date.

If a member of the Management Board ceases to hold an office at the MorphoSys Group because of termination (or if the Management Board member terminates the employment contract), resignation, death, injury, disability, by reaching retirement age (receipt of a normal retirement pension, early-retirement pension or disability pension, as long as the requirements for the disability pension entitlement are met) or under other circumstances subject to the Supervisory Board’s discretion, the Management Board member (or the member’s heirs) is entitled to performance shares determined on a precise daily pro rata basis.

If a member of the Management Board ceases to hold an office at the MorphoSys Group for good reason as defined by Sec. 626 Para. 2 of the German Civil Code (BGB) and/or as defined by Sec. 84 Para. 3 of the German Stock Corporation Act (AktG), the beneficiary will not be entitled to performance shares.

If a change of control occurs during the four-year vesting period, all performance shares will become fully vested. In this case, the right to receive a certain allocation of performance shares under the LTI plan occurs only at the end of the four-year vesting period.

In April 2015, MorphoSys repurchased 88,670 of its own shares on the stock exchange at an average price of € 60.79 per share. The repurchased shares may be used for all purposes named in the authorization of the Annual General Meeting on May 23, 2014 and particularly for any existing or future employee participation schemes and/or to finance acquisitions. The shares may also be redeemed.

A total of 40,425 of these shares were allocated to beneficiaries on April 1, 2015 with 21,948 performance shares allocated to the Management Board (further details may be found in the table titled “Performance Shares” in Item 7.3 “Related parties”) and 18,477 performance shares to the Senior Management Group. The number of shares allocated is based on the full achievement of the performance criteria and a company factor of 1. The fair value of the performance shares as of the grant date (April 1, 2015) was € 61.40 per share. No dividends were included in the determination of the fair value of the performance shares because the Group does not intend to distribute any dividends in the foreseeable future. From the grant date until December 31, 2016, one beneficiary left MorphoSys, and, therefore, 696 performance shares have been forfeited. For the calculation of the personnel expenses from share-based payments under the 2015 LTI plan, it was assumed that one beneficiary will leave the Company during the four-year period.

In 2016, personnel expenses from performance shares under the Group’s 2015 LTI plan amounted to € 837,153 (2015: € 1,104,730).

7.2.5 2016 LONG-TERM INCENTIVE PROGRAM

On April 1, 2016, MorphoSys established a long-term incentive plan (LTI plan) for the Management Board and the Senior Management Group. According to IFRS 2, this program is considered a share-based payment program with settlement in equity instruments and is accounted for accor­dingly. The LTI plan is a performance-related share plan and will be paid out in ordinary shares (performance shares) of MorphoSys AG if predefined key performance criteria are achieved. These criteria are evaluated annually by the Supervisory Board. The grant date was April 1, 2016 and the vesting/performance period is four years. If the predefined key performance criteria for the respective period are fully met, 25 % of the performance shares become vested in each year of the four-year vesting period. The number of performance shares vested each year will be reduced or increased to the extent that the performance criteria of the respective year have been achieved between only 50 % and 99.9 % (<100 %) or the achievement of the performance criteria has exceeded 100 % (maximum 200 %). If in one year the performance criteria are met by less than 50 %, no performance shares will become vested in that year. In any case, the maximum pay-out at the end of the four-year period is limited by a factor determined by the Group, which generally amounts to 1. However, in justified cases, the Supervisory Board may set this factor freely between 0 and 2, for example, if the level of payment is regarded as unreasonable in view of the general development of the Company. The right to receive a certain allocation of performance shares under the LTI plan only occurs at the end of the four-year vesting period.

There is a six-month exercise period following the four-year vesting period, during which the Company can transfer the performance shares to the beneficiaries. Beneficiaries are free to choose the exercise date within this exercise period.

If the number of repurchased shares is not sufficient for servicing the LTI plan, MorphoSys reserves the right to pay a certain amount of the LTI plan in cash in the amount of the performance shares at the end of the vesting period, provided the cash amount does not exceed 200 % of the fair value of the performance shares on the grant date.

If a member of the Management Board ceases to hold an office at the MorphoSys Group because of termination (or if the Management Board member terminates the employment contract), resignation, death, injury, disability, by reaching retirement age (receipt of a normal retirement pension, early-retirement pension or disability pension, as long as the requirements for the disability pension entitlement are met) or under other circumstances subject to the Supervisory Board’s discretion, the Management Board member (or the member’s heirs) is entitled to performance shares determined on a precise daily pro rata basis.

If a member of the Management Board ceases to hold an office at the MorphoSys Group for good reason as defined by Sec. 626 Para. 2 of the German Civil Code (BGB) and/or as defined by Sec. 84 Para. 3 of the German Stock Corporation Act (AktG), the beneficiary will not be entitled to performance shares.

If a change of control occurs during the four-year vesting period, all performance shares will become fully vested. In this case, the right to receive a certain allocation of shares under the LTI plan occurs only at the end of the four-year vesting period.

In March 2016, MorphoSys repurchased 52,295 of its own shares on the stock exchange at an average price of € 41.69 per share. The repurchased shares may be used for all purposes named in the authorization of the Annual General Meeting on May 23, 2014 and particularly for any existing or future employee participation schemes and/or to finance acquisitions. The shares may also be redeemed.

On April 1, 2016, a total of 68,143 of treasury shares were allocated to beneficiaries with 35,681 performance shares allocated to the Management Board (further details may be found in the table titled “Performance Shares” in Item 7.3 “Related parties”) and 32,462 performance shares to the Senior Management Group. The number of performance shares allocated is based on the full achievement of the performance criteria and a company factor of 1. The fair value of the performance shares as of the grant date (April 1, 2016) was € 46.86 per share. No dividends were included in the determination of the fair value of the performance shares because the Group does not intend to distribute any dividends in the foreseeable future. From the grant date until December 31, 2016, one beneficiary left MorphoSys, and, therefore, 1,464 performance shares have been forfeited. The forfeiture of performance shares due to terminations by beneficiaries during the four-year period has been accounted for in the calculation of the personnel expenses from share-based payments under the 2016 LTI plan.

In 2016, personnel expenses from performance shares under the Group’s 2016 LTI plan amounted to € 1,483,694.

The fair value of the performance shares of the long-term incentive plans 2013 until 2016 has been determined with a Monte Carlo simulation. The expected volatility is based on the development of the share volatility of the last four years. Furthermore, the calculation of fair value equally considered the performance criteria of the absolute and relative performance of the MorphoSys share compared to the development of the NASDAQ Biotech Index and the TecDAX Index. The parameters of each program are listed in the table below.

April 2013 Long-Term Incentive Program October 2013 Long-Term Incentive Program April 2014 Long-Term Incentive Program April 2015 Long-Term Incentive Program April 2016 Long-Term Incentive Program
Share Price on Grant Date in € 31.88 57.23 68.08 57.18 43.28
Strike Price in € 0.00 0.00 0.00 0.00 0.00
Expected Volatility of the MorphoSys share in % 28.91 30.14 30.87 33.09 34.64
Expected Volatility of the NASDAQ Biotech Index in % 19.20 19.38 20.28 20.70 23.39
Expected Volatility of the TecDAX Index in % 22.68 20.49 20.18 20.10 17.01
Performance Term of Program in Years 4.0 4.0 4.0 4.0 4.0
Dividend Yield in % 0.0 0.0 0.0 0.0 0.0
Risk-free Interest Rate in % 0.17 0.56 0.44 0.07 0.05

7.3 RELATED PARTIES

Related parties that can be influenced by the Group or can have a significant influence on the Group can be divided into subsidiaries, members of management in key positions and other related entities.

The Group engages in business relationships with members of the Manage­ment Board and Supervisory Board as related parties responsible for the planning, management and monitoring of the Group. In addition to cash compensation, the Group has granted the Management Board convertible bonds and performance shares. The tables below show the shares, convertible bonds and performance shares held by the members of the Management Board and Supervisory Board, as well as the changes in their ownership during the 2016 financial year.

Shares
01/01/2016 Additions Sales 12/31/2016
Management Board
Dr. Simon Moroney 495,238 18,976 0 514,214
Jens Holstein 4,000 12,997 9,997 7,000
Dr. Arndt Schottelius1 2,000 13,397 5,000 10,397
Dr. Marlies Sproll 50,752 12,997 6,237 57,512
Total 551,990 58,367 21,234 589,123
         
Supervisory Board
Dr. Gerald Möller 11,000 0 0 11,000
Dr. Frank Morich 1,000 0 0 1,000
Dr. Marc Cluzel 500 0 0 500
Karin Eastham 2,000 0 0 2,000
Wendy Johnson 500 0 0 500
Klaus Kühn 0 0 0 0
Total 15,000 0 0 15,000
Convertible Bonds
01/01/2016 Additions Forfeitures Exercises 12/31/2016
Management Board
Dr. Simon Moroney 88,386 0 0 0 88,386
Jens Holstein 90,537 0 0 0 90,537
Dr. Arndt Schottelius1 60,537 0 0 0 60,537
Dr. Marlies Sproll 60,537 0 0 0 60,537
Total 299,997 0 0 0 299,997
Performance Shares
01/01/2016 Additions Forfeitures Allocations 12/31/2016
Management Board
Dr. Simon Moroney 44,164 12,032 0 18,976 37,220
Jens Holstein 30,248 7,883 0 12,997 25,134
Dr. Arndt Schottelius1 30,248 7,883 0 12,997 25,134
Dr. Marlies Sproll 30,248 7,883 0 12,997 25,134
Total 134,908 35,681 0 57,967 112,622
1
Dr. Arndt Schottelius left the Management Board of MorphoSys AG on February 28, 2017.

The Supervisory Board of MorphoSys AG does not hold any convertible bonds or performance shares.

The total remuneration of the Management Board consists of several components, including fixed compensation, an annual cash bonus that is dependent upon the achievement of corporate and personal targets (short-term incentives – STI), variable compensation components with long-term incentives (LTI) and other remuneration components. Following the expiration of the relevant contract term, the service contracts of the Management Board members stipulate a non-competition clause for a period of six months. During this period, the Management Board member is entitled to compensation payments amounting to 100 % of the pro rata fixed ­compensation.

In 2016, the total remuneration of the Supervisory Board, excluding reimbursement for travel costs, amounted to € 529,680 (2015: € 529,270).

While in the management report the remuneration of the Management Board and the Supervisory Board as members in key management positions is presented in accordance with the provisions of the Corporate Governance Code, the following tables show the expense-based view in accordance with IAS 24.

MANAGEMENT BOARD REMUNERATION FOR THE YEARS 2016 AND 2015 (IAS 24):
Dr. Simon Moroney Chief Executive Officer Jens Holstein Chief Financial Officer Dr. Arndt Schottelius Chief Development Officer Dr. Marlies Sproll Chief Scientific Officer Total
2015 2016 2015 2016 2015 2016 2015 2016 2015 2016
Fixed Compensation 445,736 463,457 302,384 314,405 302,384 309,759 302,384 314,405 1,352,888 1,402,026
Fringe Benefits 36,887 34,270 39,735 46,300 29,889 28,388 22,954 24,141 129,465 133,099
One -Year Variable Compensation 238,692 210,873 161,926 143,054 156,635 140,940 156,635 143,054 713,888 637,921
Total Short-Term Employee Benefits (IAS 24.17 (a)) 721,315 708,600 504,045 503,759 488,908 479,087 481,973 481,600 2,196,241 2,173,046
Service Cost 138,280 142,096 90,800 92,875 94,064 95,473 94,085 92,876 417,229 423,320
Total Benefit Expenses – Post-Employment Benefits (IAS 24.17 (b)) 138,280 142,096 90,800 92,875 94,064 95,473 94,085 92,876 417,229 423,320
Multi-Year Variable Compensation1:
2013 Convertible Bonds Program (Vesting Period 4 Years) 164,969 33,964 168,984 34,791 112,990 23,263 112,990 23,263 559,933 115,281
2011 Long-Term Incentive Program (Vesting Period 4 Years) 129,900 0 88,974 0 88,974 0 88,974 0 396,822 0
2012 Long-Term Incentive Program (Vesting Period 4 Years) 22,755 (42,350) 15,585 (29,007) 15,585 (29,007) 15,585 (29,007) 69,510 (129,371)
2013 Long-Term Incentive Program (Vesting Period 4 Years) 57,029 (10,303) 39,061 (7,075) 39,061 (7,075) 39,061 (7,075) 174,212 (31,528)
2014 Long-Term Incentive Program (Vesting Period 4 Years) 119,143 32,972 81,605 22,572 81,605 22,572 81,605 22,572 363,958 100,688
2015 Long-Term Incentive Program (Vesting Period 4 Years) 196,345 148,799 134,483 101,906 134,483 101,906 134,483 101,906 599,794 454,517
2016 Long-Term Incentive Program (Vesting Period 4 Years) 0 269,420 0 176,511 0 176,511 0 176,511 0 798,953
Total Stock-Based Compensation (IAS 24.17 (e)) 690,141 432,502 528,692 299,698 472,698 288,170 472,698 288,170 2,164,229 1,308,540
Total Compensation 1,549,736 1,283,198 1,123,537 896,332 1,055,670 862,730 1,048,756 862,646 4,777,699 3,904,906
1
The fair value was determined pursuant to the regulations of IFRS 2 “Share-based Payments”. This table shows the pro-rata share of personnel expenses resulting from stock-based compensation for the respective financial year. Further details can be found in Sections 7.1 and 7.2.
SUPERVISORY BOARD REMUNERATION FOR THE YEARS 2016 And 2015:
Fixed Compensation Attendance Fees1 Total Compensation
in € 2016 2015 2016 2015 2016 2015
Dr. Gerald Möller 91,400 93,521 43,400 36,200 134,800 129,721
Dr. Frank Morich2 57,240 37,324 26,800 14,200 84,040 51,524
Dr. Marc Cluzel 52,160 50,089 34,600 28,000 86,760 78,089
Karin Eastham 52,160 50,089 24,400 36,800 76,560 86,889
Wendy Johnson2 46,160 30,099 33,800 26,400 79,960 56,499
Klaus Kühn2 46,160 30,099 21,400 14,200 67,560 44,299
Dr. Walter Blättler3 16,188 13,000 29,188
Dr. Daniel Camus3 16,188 8,400 24,588
Dr. Geoffrey Vernon3 20,073 8,400 28,473
Total 345,280 343,670 184,400 185,600 529,680 529,270
1
The attendance fee contains expense allowances for the attendance at Supervisory Board and Committee meetings.
2
Dr. Frank Morich, Wendy Johnson and Klaus Kühn joined the Supervisory Board of MorphoSys AG on May 8, 2015.
3
Dr. Walter Blättler, Dr. Daniel Camus and Dr. Geoffrey Vernon left the Supervisory Board of MorphoSys AG on May 8, 2015.

In the years 2016 and 2015, there were no other long-term benefits in accord­ance with IAS 24.17 (c) or benefits upon termination of employment in accordance with IAS 24.17 (d) accruing to the Management Board or Supervisory Board.

There are presently no other agreements with current or former members of the Supervisory Board.

As of December 31, 2016, the Senior Management Group held 136,588 conver­tible bonds (December 31, 2015: 150,002 units) and 82,143 per­formance shares (December 31, 2015: 85,542), which were granted by the Company. In 2016, an additional long-term incentive program was allocated to the Management Board and Senior Management Group. As part of this program, the Senior Management Group was allocated 32,462 performance shares. In 2016, a total of 30,105 performance shares under the 2012 LTI plan were granted to the Senior Management Group, reducing the number of performance shares. No convertible bonds were exercised in 2016 (2015: 19,048). In 2016, a total of 2,554 performance shares forfeited because one beneficiary had left MorphoSys.

arrow-topCreated with sketchtool.Top arrow-leftCreated with sketchtool.6. Notes to Equity and Liabilities of the Balance Sheet arrow-rightCreated with sketchtool.8. Additional Notes