Compensation Report

Dear Shareholders,

At last year’s Annual General Meeting on May 12, 2017, the agenda item “Resolution on the approval of the compensation system for members of the Executive Board” was put to the vote. The Executive Board compensation system was the only one of eight agenda items put to the vote at the Annual General Meeting that did not achieve majority approval by the shareholders. The Supervisory Board of ProSiebenSat.1 Media SE took this result as an opportunity to analyze the criticisms expressed by shareholders in depth. In the end, it can be concluded that the reasons for the refusal as conveyed to the company were mainly focused on the general compensation structure, individual compensation components, and a lack of transparency in the presentation of the compensation system.

The Supervisory Board accepted the criticisms and thoroughly revised the Compensation Report in order to achieve much greater comprehensibility for the existing compensation system on the capital market. In addition, the company has increasingly sought dialog with its shareholders since the last Annual General Meeting in order to gain a better understanding of the report readers’ needs and optimize the Compensation Report accordingly.

As well as improving transparency by revising the Compensation Report, the Supervisory Board also decided to adjust the compensation system for the members of the Executive Board promptly to take account of the shareholders’ criticisms of the structural elements within the current compensation system. In this context, key elements of a new compensation system have already been developed in cooperation with an external independent compensation consultant. The new compensation system will be designed to be more consistent with our shareholders’ interests and geared toward a sustainable company performance. First and foremost, the compensation system is to be simplified, while performance-based compensation will still be calculated based on predominantly long-term parameters. Free discretionary decisions by the Supervisory Board in the case of individual compensation components are to be avoided entirely in future. In the new compensation system, long-term variable compensation will consist of only one plan type. The Mid Term Incentive Plan is to be scrapped completely and the Group Share Plan will be replaced by a new Performance Share Plan with a structure in line with the market. Different strategically relevant performance targets in the short-term and long-term variable compensation will ensure that the Executive Board’s performance is fully reflected in the compensation system and relevant incentives are set for successful corporate management. In order to further align the interests of the shareholders and the Executive Board, a relative comparison with relevant comparable companies is specified as an additional performance target in the long-term variable compensation. In addition, share ownership guidelines are to be introduced for the Executive Board in order to strengthen the equity culture. Each Executive Board member will be required to invest payouts from the variable compensation pro rata in ProSiebenSat.1 Media SE shares up to a defined target amount and to hold these shares at least until the end of their appointment as a member of the Executive Board.

In summary, the revision of the Executive Board compensation system comprises the following aspects:

We intend to put the revised compensation system for Executive Board members to the vote at the Annual General Meeting on May 16, 2018, and ask you to approve this agenda item.

Yours,

Dr. Werner Brandt
Chairman of the Supervisory Board

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 2017. It explains the structure and level of compensation of the individual members of the Executive Board and Supervisory Board. The 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 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 (Fig. 007). 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. Report of the Supervisory Board

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, ITV and Mediengruppe RTL Deutschland. 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 in December 2015 by an international and independent compensation consulting firm.

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 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

The Executive Board compensation comprises fixed compensation and several variable compensation components, which, within a certain range, stand in a balanced and appropriate relationship to one another.

In addition, Executive Board members receive pension entitlements and non-performance-based fringe benefits.

Fixed Compensation

All Executive Board members each received a fixed base salary. It was determined with reference to the individual Executive Board member’s areas of work and responsibility and was paid monthly.

Variable Compensation Components

The variable compensation comprises one one-year (performance bonus) and two multi-year compensation components (Group Share Plan and Mid-Term Incentive Plan). The variable compensation components each follow different business goals and accordingly provide different incentives.

Annual Variable Compensation

In addition to the fixed base salary, Executive Board members also received performance-based variable annual compensation, also known as a performance bonus. The structure of the performance bonus is regulated uniformly in the employment contracts of the Executive Board members. The amount is determined on the basis of the so-called target bonus. The target bonus is the amount that the respective Executive Board members would be entitled to if they achieved each of their annual targets at a rate of 100%. For financial year 2017, the target bonus in the event of 100% target achievement for Thomas Ebeling is EUR 1,000,000, Dr. Jan Kemper EUR 379,167 (pro rata for the months June to December 2017), Conrad Albert EUR 400,000, Sabine Eckhardt EUR 375,000, Jan David Frouman EUR 325,000 and Christof Wahl EUR 325,000. In connection with his early departure from the Executive Board as of March 31, 2017, Dr. Gunnar Wiedenfels received a pro rata, non-performance-based performance bonus of EUR 81,250 for 2017. Dr. Ralf Schremper left the Executive Board as of July 31, 2017; his entitlement to the performance bonus for financial year 2017 was satisfied in full with the severance payment. If the annual targets are exceeded, the performance bonus may also exceed the target bonus; however, it may not amount to more than 200% of the target bonus (cap). If annual targets are not met in full, the performance bonus may also be lower than the target bonus or may not be paid at all.

Both the underlying target parameters and the size of the annual targets are derived from the corporate planning for the respective financial year. The performance bonus can thus be adjusted to the prevailing situation of the Company and tailored to the responsibilities of each Executive Board member. EBITDA is defined as a key target parameter for compensation because, as an operating earnings figure, it is the most important corporate key indicator and a central parameter for corporate planning before investment and financing decisions. In addition, EBITDA is a suitable reference value for the calculation of enterprise value (EV). Enterprise value is the basis for determining international valuation comparisons in particular and is therefore the primary key figure for the valuation of both ProSiebenSat.1 and comparable European companies in the broadcasting sector. Net financial debt is a key indicator that is regularly communicated to the capital market. This indicator ensures that our Group has a sustainable financing structure.

Annual targets for 2017 were defined in the target agreements of the Executive Board members. Their achievement is based on the target parameters of Group EBITDA and net financial debt in addition to other, individual target parameters according to the responsibilities allocated to Executive Board members. For financial year 2017, the Group EBITDA target parameter had a weighting of 40% for Thomas Ebeling and Dr. Jan Kemper and 20% for the other Executive Board members; the Group net financial debt target parameter had a 10% weighting for all Executive Board members; the individual target parameters had a weighting of 50% for Thomas Ebeling and Dr. Jan Kemper and 70% for the other Executive Board members. Personal target agreements for Executive Board members who bear segment responsibility in relation to agreed segment targets are essentially based on the revenue and EBITDA target parameters of the respective segments.

If target parameters 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. In the event of major unexpected developments during the year, especially in the case of acquisitions, disposals, amendments to IFRSs and other such non-recurring events, the values actually achieved for the respective key financial figures can, for the purposes of determining target achievement, be adjusted for the effects of such developments, provided the event concerned was not (or not to the appropriate extent) taken into account when setting the relevant annual targets.

At its due discretion, the Supervisory Board can increase or decrease the target achievement by up to 20%. However, the resulting adjusted target achievement cannot exceed the cap of 200%. The adjustment option can be used to take account of individual achievements by Executive Board members, either positively or negatively. When selecting the criteria that can be applied to a decision on a potential adjustment, the Supervisory Board takes account of factors including the relevance of the achievement to sustainable corporate management, the contribution to diversification and transformation, and/or the Company’s business situation.

The following annual targets and target achievement resulted for the target parameters of the performance bonus for financial year 2017:

To calculate target attainment for financial year 2017 in the target parameters of the Group’s EBITDA and net financial debt, the Supervisory Board primarily adjusted for positive non-recurring items (gains) from the disposal of eTRAVELi Holding AB.

In addition, the Supervisory Board made an individual adjustment to the target achievement of +5% to +20% in the overall assessment for five Executive Board members for financial year 2017. This took account of the non-quantifiable contribution of the individual members of the Executive Board team to the achievement of the targets for 2017. Based on the overall assessment of their individual performance, the members of the Executive Board therefore achieved overall degrees of target achievement for the performance bonus of between 50% and 99% in financial year 2017.

Multi-Year Variable Compensation

Group Share Plan

The Group Share Plan, which was created in 2012, also gives Executive Board members a long-term, share-based compensation component. Performance share units (PSUs) are issued to participants. After the end of a four-year performance period starting at the beginning of the year of issue, participants are entitled, at the Company’s discretion, to receive shares of the Company or to a corresponding payment in cash in the amount of the market value of these shares. In March 2016, the Company and the Supervisory Board decided to exercise this right to settle these in cash until further notice and thus to pay for these PSUs in cash after the four-year performance period has expired (see Notes to the Consolidated Financial Statements, note 31 “Share-based payment”). Cash settlement is firstly less complex and thus less cost-intensive, which is ultimately in the interests of the Company and thus also the shareholders. Secondly, in the case of settlement with shares, the participants would be forced to immediately sell a portion of the shares to cover the income tax incurred on the settlement.

Annual conversion factor and PSU conversion factor: The conversion factor by which the PSUs are converted into ProSiebenSat.1 shares or an equivalent amount in cash after the end of the four-year performance period (“PSU conversion factor”) depends on the achievement of predefined annual targets during the entire four-year performance period. These annual targets relate to the development of the EBITDA performance targets and the achievement of certain minimum values for the Group’s consolidated net income and EBITDA for each year of the four-year performance period, which are derived annually from the current corporate planning and measure the continuous fulfillment of annual planning over a longer period. In principle, the performance targets and minimum values equate to target achievement of 100% according to the respective corporate planning. (Fig. 011)

011 / Four-year Performance Period of the Group Share Plan

An “annual conversion factor” is initially determined on the basis of the respective target achievement in each year of a four-year performance period. The average annual conversion factor from all four years of a performance period then gives the PSU conversion factor. The Company’s performance over the entire four-year performance period is thus included at the same time. In accordance with the plan conditions, the annual conversion factor and thus the PSU conversion factor are – subject to any adjustments as described below – between 0% and 150% (“performance-related cap”) depending on the degree of target achievement.

The PSU conversion factor is also adjusted via the additional link with share price performance over the four-year performance period. If the share price at the time the PSU conversion factor is defined exceeds the share price when the PSUs of the four-year performance period were issued by more than 200%, the PSU conversion factor is reduced so that a price increase above the threshold of 200% does not result in a further increased value of the corresponding PSUs (“price-related cap”). (Fig. 199), Notes, Note 32 “Share-based payments,” page 237

Adjustment mechanisms: The main adjustment mechanisms for the annual conversion factor, the PSU conversion factor and the number of PSUs are as follows:

• The annual conversion factor and thus the PSU conversion factor for a four-year performance period can be adjusted by correcting the EBITDA actually achieved in the year in question for the effects of extraordinary developments or special circumstances such as material M&A transactions or amendments to IFRSs with a considerable effect on the EBITDA of that year that were not yet accounted for when setting the annual performance targets. Any adjustments must not result in the performance-related cap of 150% being exceeded.
• In the event of exceptional developments, the Supervisory Board can also raise or lower the PSU conversion factor by up to 25 percentage points while taking into account the individual performance of the Executive Board members. The Supervisory Board has previously only made use of this in the case of the Group Share Plan 2012, making an individual adjustment of 17.5 percentage points for extraordinary performance on the part of the Executive Board members in office in the financial year 2012 Thomas Ebeling, Conrad Albert and Dr. Christian Wegner, which they achieved with particular regard to the conclusion of successful M&A transactions, the positive share price performance and the early achievement of the targets communicated to the capital market for 2015.
• Finally, the number of PSUs for anti-dilution protection is adjusted if a superdividend is distributed. In accordance with the terms and conditions of the plan, the superdividend is the amount by which the dividend distributions per share for a financial year exceed the adjusted net income per share for that financial year. In the event of such a superdividend, a corresponding increase in the factor for converting PSUs into shares ensures that the plan participants are not financially diluted by these dividend distributions. An adjustment of the number of PSUs due to the distribution of a superdividend has previously only occurred in the Group Share Plan 2012 as a result of the dividend distribution for the financial year 2012. The increased dividend distribution was possible because the Group’s operating cash flow was available for other purposes due to the successful sale of Northern European TV and radio activities. No more use has been made of this since 2013.

Timing of the adjustments: The annual conversion factor is adjusted in accordance with the terms and conditions of the plan within a month of the publication of the audited and approved Consolidated Financial Statements for the respective financial year. In accordance with the terms and conditions of the plan, the final PSU conversion factor is defined taking account of other adjustments of the annual conversion factor and the number of PSUs for anti-dilution protection in the event of a superdividend not later than one month after the publication of the audited and approved Consolidated Financial Statements for the last financial year of each performance period.

Vesting: After the end of each year of the four-year performance period, a quarter of the PSUs awarded become vested; a requirement for this is that consolidated net income is positive in the year in question and ProSiebenSat.1 Group’s EBITDA does not fall below a defined minimum. The diagram below shoes the timing of vesting during the four-year performance period: (Fig. 012)

012 / Vesting During the Four-year Performance Periode

As of the end of 2017, the Group Share Plans from 2014 (with the performance period 2014 – 2017), 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 112% for financial year 2014 (Group Share Plan 2014), 105% for financial year 2015 (Group Share Plans 2014 and 2015) and also 105% for financial year 2016 (Group Share Plans 2014 – 2016). For financial year 2017, the annual conversion factor is 78% (Group Share Plans 2014 – 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 2014 thus comes to 100% now. The PSU conversion factors for the respective four-year performance periods of the Group Share Plans 2015 to 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 2013 for the completed four-year performance period was 108%.

Further information on the Group Share Plan can be found in the Notes to the Consolidated Financial Statements.

Mid-Term Incentive Plan

Under the Mid-Term Incentive Plan, which was introduced in 2015, Executive Board members receive another multi-year variable compensation component. This involves a mid-term remuneration instrument to be paid out in cash for members of the Executive Board and other selected executives, which gives the participants the opportunity to share in the future development of ProSiebenSat.1 Group’s adjusted EBITDA. The Mid-Term Incentive Plan has a three-year plan term starting in the financial year 2016 and encourages the achievement of the mid-term targets communicated to the capital market for the financial year 2018. In addition, it is a key incentive for a successful transformation of ProSiebenSat.1 Group from a TV company into an entertainment and commerce powerhouse, which will secure the future viability of our Company. The payment amount depends on adjusted EBITDA achieved by ProSiebenSat.1 Group in the financial year 2018 in addition to the achievement of certain minimum thresholds for revenues and adjusted EBITDA during the plan term. The adjusted EBITDA actually achieved in the respective year and the 2018 consolidated revenues can be corrected and adjusted accordingly for the effects of extraordinary developments or special circumstances, such as material M&A transactions, that were not accounted for in the adjusted EBITDA or revenue target. The payment amount can amount to between 0% and a maximum of 250% of the target value. The achievement of the minimum thresholds, the level of target achievement, and the respective payment amount therefore cannot be calculated until the end of financial year 2018. Executive Board members and other participants in the Mid-Term Incentive Plan each receive a one-off allocated amount for the entire plan term. If participants leave the Company prematurely before the end of the plan term, their payment shall be reduced on a pro rata basis. This one-off amount under the Mid-Term Incentive Plan was allocated to the Company’s Executive Board members in office in the financial year 2015 in February and April 2015, to new Executive Board members appointed in the financial year 2016 in March and June 2016, and to new Executive Board members appointed in the financial year 2017 in November and December 2016. The Mid-Term Incentive Plan is reported in the table of benefits in accordance with the German Corporate Governance Code (GCGC) from 2016 as the plan term as defined by the GCGC does not begin until 2016. The target value, i.e. the value that is granted to the Executive Board if 100% of the target has been achieved, is EUR 1.5 million for Thomas Ebeling, EUR 1.0 million each for Dr. Gunnar Wiedenfels, Conrad Albert, Dr. Ralf Schremper, Jan David Frouman and Christof Wahl, and EUR 0.67 million each for Dr. Jan Kemper and Sabine Eckhardt. Dr. Gunnar Wiedenfels left the Executive Board as of March 31, 2017, Dr. Ralf Schremper as of July 31, 2017, and Thomas Ebeling will leave as of February 22, 2018. For information on the effects on the Mid-Term Incentive Plan, please refer to “Notes on the Compensation of Departed or Departing Executive Board Members.”

Claims for Restitution

In line with common practice on the German market, the Executive Board members’ contracts do not include provisions on claims for restitution on the part of the Company against the Executive Board members for variable compensation paid, e.g. clawback clauses, as variable compensation is only paid out once the compensation is definitively vested. All variable compensation components for Executive Board members are therefore forward-looking and are not paid out until the end of the plan term. Until then, they also reflect negative value risks at the expense of the variable compensation. An additional clawback provision is therefore neither needed nor planned. This does not affect the applicable legal situation regarding any claims for damages on the part of the Company against Executive Board members in the event of culpable breaches of duty (such as according to Section 93 (2) of the German Stock Corporation Act, AktG). For further information on the D&O insurance taken out for the event of such claims for damages, please refer to the comments under “D&O Insurance.”

Pension Agreements

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 Dr. Ralf Schremper, Dr. Gunnar Wiedenfels, Jan David Frouman, Christof Wahl, Dr. Jan Kemper and Sabine Eckhardt, 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).

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.

Compensation of Executive Board Members for the Financial Year 2017 in Accordance with GAS 17

The following total compensation for Executive Board members in office in the financial year 2017 was determined in accordance with GAS 17: (Fig. 013)

Notes on the Compensation of Departed or Departing Executive Board Members

Dr. Gunnar Wiedenfels left the Executive Board at his own request on March 31, 2017; his employment contract ended effective March 31, 2017. In accordance with his termination agreement, Dr. Gunnar Wiedenfels did not receive a severance payment. The performance bonus for 2016 was calculated and paid out based on the actual targets achieved in accordance with the provisions contained in his employment contract. Dr. Gunnar Wiedenfels received a non-performance-based pro rata amount worth 3/12 of the target bonus for the performance bonus (EUR 81,250) as a performance bonus for 2017. The target bonus is based on the assumption that 100% of the target for the performance bonus has been achieved. For 2017, there was no further entitlement to allocation of PSUs under the Group Share Plan. The PSUs issued to Dr. Wiedenfels under the Group Share Plan (GSP) in 2015 and 2016 as part of his work as an Executive Board member were vested at 50% (GSP 2015) and 25% (GSP 2016) when he left the Company, and were settled in cash in the allocated amount (or any lower market value in accordance with the terms and conditions of the plan). The PSUs issued to him in 2013 and 2014 for work performed before his appointment to the Executive Board were vested at 100% (GSP 2013) or 75% (GSP 2014) when he left the Company and will be settled as planned after the end of the respective four-year performance period. All PSUs that were not vested upon departure expired without compensation. Due to the premature termination of his employment contract before the end of the plan term, all of the entitlements of Dr. Gunnar Wiedenfels under the Mid-Term Incentive Plan expired without compensation. Since the three-year waiting period for the contractual vesting was not reached, the pension agreement provides only for entitlements that Dr. Gunnar Wiedenfels obtained from deferred compensation. In addition, the termination agreement stipulated that the post-contractual non-competition clause and the associated provisions regarding the waiting allowance were canceled without replacement.

Dr. Ralf Schremper stepped down from the Executive Board as of July 31, 2017. His employment contract, which would have had been effective until March 31, 2018, also ended effective July 31, 2017. In accordance with his termination agreement, Dr. Ralf Schremper received a severance payment of EUR 1.7 million, which was made up of the following elements: fixed remuneration of EUR 212,500 for the months from August to December 2017, performance bonus of EUR 325,000 for the months from January to December 2017 (assuming 100% target achievement) and EUR 200,000 as compensation for the non-participation in the Group Share Plan for 2017, which were payable on the termination date. The termination agreement stipulated the following with regard to the Mid-Term Incentive Plan: Under the Mid-Term Incentive Plan, Dr. Ralf Schremper was allocated an amount worth EUR 1.0 million with a plan term from 2016 to 2018. Based on the agreement in his termination agreement, this amount was paid out on the termination date on a pro rata basis for 2016 and 2017, amounting to EUR 666,666.67. Concerning the Group Share Plan, the termination agreement stipulates that Dr. Ralf Schremper 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 December 31, 2017. Accordingly, the PSUs allocated under GSP 2015 were 75% vested on his departure, the PSUs allocated under GSP 2016 50%; a provision of EUR 262,954.45 was recognized for this. All PSUs that were not vested upon departure expired without compensation. For 2017, there was no further entitlement to allocation of PSUs under the Group Share Plan. In addition, Dr. Ralf Schremper still received pension contributions of EUR 42,500 for August to December 2017, whereby for the purposes of the provisions of the pension agreement with regard to vesting Dr. Ralf Schremper was treated as if the employment relationship had not ended until the regular end of the contract on March 31, 2018. It has also been agreed that the post-contractual non-competition clause and the associated provisions regarding the waiting allowance are canceled without compensation.

Thomas Ebeling will step down from the Executive Board as of February 22, 2018. His employment contract, which would have had been effective until June 30, 2019, will also end effective February 22, 2018. In accordance with the termination agreement, Thomas Ebeling’s contractual compensation will continue to be paid unchanged until the termination date. His compensation entitlements for the remaining term of the employment contract will be 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 will be granted up to and including February 2018 and a total of EUR 1,333,333.33 paid as a severance payment for the remaining term of the employment contract (March 2018 to June 2019). The performance bonus will be 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 will instead be 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 will be paid out as severance. The contractual remuneration of the pension agreement will be continued unchanged for the remaining term of the contract; pension contributions of EUR 266,666.67 will be attributed to the period from March 2018 up to and including June 2019. Thomas Ebeling’s multi-year compensation components will be settled in cash following the termination date in accordance with the termination agreement, provided the plan term has 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 will be paid off at the allocated amount of EUR 1.5 million with a plan term from 2016 to 2018. In accordance with this employment contract, Thomas Ebeling is 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, will be settled normally. The PSUs allocated in 2015 and 2016 are settled at the allocated amount; the allocated amount is 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 assumes the continuation of the employment contract for the remaining term until June 2019. Accordingly, a settlement is only paid if the corresponding PSUs are to become vested by then. This gives 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 compensate Thomas Ebeling’s handover work for a transitional period of three months after the termination date, in which he will remain available to the Company to an appropriate extent for information and other handover and consulting tasks associated with his previous work. Furthermore, this also compensates Thomas Ebeling’s post-contractual non-competition clause agreed for the period up to and including June 2019, so the Company does not have to pay a separate waiting allowance for this.

Additional Disclosures on Share-Based Payment Instruments (Group 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 2017: (Fig. 014)

In the financial year 2017, 70,857 performance share units from the Group Share Plan were exercised and 41,749 performance share units expired. For more information on the performance share units granted for the financial year 2017, please refer to Note 32 in the Notes to the Consolidated Financial Statements. Notes, Note 32 “Share-based payments,” page 237

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.

Compensation of Executive Board Members for the Financial Year 2017 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 2017, including fringe benefits and the minimum and maximum compensation achievable in the financial year 2017 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. (Fig. 015–023)

For information on the termination agreements of Dr. Gunnar Wiedenfels, Dr. Ralf Schremper and Thomas Ebeling, 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. (Fig. 025)

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. As part of the termination agreement with Dr. Gunnar Wiedenfels and Dr. Ralf Schremper, their respective post-contractual non-competition clauses and associated entitlement to a waiting allowance in relation to their premature termination were canceled. As part of the termination agreement with Thomas Ebeling, it was 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 February 22, 2018, to the end of June 30, 2019, and that the waiting allowance is settled by the severance payment.

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. (Fig. 024)

Total Compensation of Former Executive Board Members

Total compensation of EUR 4.7 million was paid to former members of the Executive Board in the financial year 2017 (previous year: EUR 6.0 million). This includes the payment of 75,687 performance share units from the Group Share Plan 2013 amounting to EUR 2.6 million (previous year: EUR 3.3 million) and the severance payment for Dr. Ralf Schremper of EUR 1.4 million payable on the termination date (July 31, 2017). In accordance with the termination agreement, a provision of EUR 0.3 million was recognized for Dr. Ralf Schremper’s participation in the Group Share Plan. Dr. Ralf Schremper also received pension contributions of EUR 42,500 for 2017. In addition, pension benefits of EUR 0.4 million (previous year: EUR 0.4 million) were paid to former Executive Board members. As of December 31, 2017, pension provisions for former members of the Executive Board in accordance with IFRS amounted to EUR 14.4 million (previous year: EUR 14.4 million). The pension provisions for Dr. Gunnar Wiedenfels and Dr. Ralf Schremper are shown in the table on total compensation of the Executive Board according to GAS 17.

Pension Provisions

In the financial year 2017, there were additions to pension provisions for active and former Executive Board members in accordance with IFRS. These amounted to EUR 1.5 million in total (previous year: EUR 2.8 million). EUR 0.7 million of this amount is attributable to current service costs (previous year: EUR 0.6 million), while EUR 0.5 million is attributable to interest expenses (previous year: EUR 0.6 million). EUR 0.04 million of this amount is attributable to actuarial gains (previous year: actuarial losses of EUR 1.3 million) while minus EUR 0.4 million is attributable to pension payments (previous year: minus EUR 0.4 million). Furthermore, deferred compensation in the amount of EUR 0.6 million (previous year: EUR 0.6 million) has been made in the past financial year. As of December 31, 2017, pension provisions for active and former Executive Board members totaled EUR 27.2 million (previous year: EUR 25.7 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 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 2017: (Fig. 026)

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.

Members of the Supervisory Board received no remuneration or other consideration for personal services, especially consulting and mediation services, during the financial year 2017. Members of the Supervisory Board do not receive loans from the Company.