340 BMW Group Report 2024 To Our Stakeholders Combined Management Report Group Financial Statements Responsibility Statement and Auditor’s Report Remuneration Report Other Information Notes to the Group Financial Statements 42 Share-based remuneration The BMW Group has three share-based programmes: one for el- igible employees, one for eligible senior department heads and one for members of the Board of Management. Employee Share Programme Within the scope of the Employee Share Programme in the 2024 financial year, eligible BMW Group employees were granted shares of BMW AG common stock on preferential terms (see ↗ note [31] for information on the number and price of the shares of common stock issued). At their discretion, participants in the programme were able to purchase packages of 10, 20, 30, 40 or 50 shares of common stock (2023: 10, 20, 30, 40 or 50 shares of common stock) at a discount of € 16.00 (2023: € 20.00) on each share as compared to the market price (aver- age closing price in Xetra trading in the period from 4 to 7 No- vember 2024: € 70.75). Employees who are currently employed by BMW AG or a wholly owned subsidiary of BMW AG based in Germany were able to partake in the programme, insofar as the subsidiary’s management had decided to participate. Employees were required to have been in their positions for at least one year without interruption at the time the programme was announced, and had to remain in their positions until the shares of common stock were transferred. The shares of common stock acquired within the scope of the Employee Share Programme are subject to a vesting period of four years calculated from 1 January of the year in which the shares of common stock were acquired. These shares of com- mon stock are eligible for dividends for the first time for the 2024 financial year. A total of 1,352,000 shares of common stock were transferred to employees in the reporting year (2023: 1,290,000). The 1,352,000 shares of common stock were acquired as part of the Employee Share Programme. BMW AG’s Board of Management decides each year anew whether to continue the programme. As at 31 December 2024, the BMW Group recorded personnel expenses resulting from the Employee Share Programme relat- ing to the difference between the market price and the discounted price for the shares of preferred stock purchased by employees totalling € 18 million (2023: € 28 million). Senior department head and Board of Management programme Both the share-based remuneration programme for members of the Board of Management that was in effect in the reporting year and the share-based remuneration programme for eligible sen- ior department heads serve to reward long-term entrepreneurial conduct with sustainable business management in mind. Board of Management members and eligible senior department heads receive an earmarked cash amount (personal cash invest- ment amount) that is, net of tax and deductions, to be invested in shares of BMW AG common stock. This amount depends on the attainment of specific financial and non-financial targets in the previous financial year (vesting year). Payment of the personal cash investment amount is made after the Annual General Meeting at which the Financial Statements are presented for the relevant financial year. The shares of com- mon stock are purchased immediately after the personal cash in- vestment amount has been paid out and are subject to a holding period of four years from the date of purchase. The RoCE com- ponent and the strategic focus target component each make up half of the target amount for the personal cash investment amount. For the RoCE component, an RoCE factor is determined based on the RoCE achieved in the Automotive segment for the grant year. For the strategic focus target component, a minimum of two strategic focus targets are defined prior to the start of the financial year. Minimum, target and maximum values are defined and factors are assigned for the RoCE in the Automotive seg- ment and for each strategic focus target. The relevant factors are determined after the end of the financial year based on the extent to which targets were achieved. For financial years up to and including 2020, Board of Manage- ment members received an earmarked cash amount (investment component) corresponding to 45% of the gross amount of the bonus that, net of tax and deductions, they were obliged to invest in shares of the Company’s common stock. This amount was also subject to a four-year holding period and on expiry thereof the Board of Management members received one additional share of the Company’s common stock or the equivalent value in cash (matching component) for every three shares of common stock held, at BMW AG’s discretion. In the event of death or invalidity, special rules apply for early payment of share-based remuneration components (matching components) based on the target amounts, and the holding pe- riod is also eliminated for shares of common stock that were ac- quired with share-based remuneration components. Where the service contract is terminated prematurely and the Company has an extraordinary right of termination, or if the Board member re- signs without the Company’s agreement, entitlements to amounts as yet unpaid relating to share-based remuneration (matching components) are forfeited; a personal cash invest- ment amount will be settled based on the target amount. Up to and including financial year 2021, eligible senior depart- ment heads undertook to invest 26% of their earnings-related bonus in shares of BMW AG common stock and to hold the ac- quired shares for four years. For the investment obligation, BMW AG granted an amount corresponding to the entire invest- ment amount as a net subsidy. Participants receive one additional share of common stock or the equivalent value in cash for every three shares of common stock held once the four-year holding requirement has been fulfilled, at the Company’s discretion. The members of the Board of Management in office on the bal- ance sheet date hold 164,474 shares of BMW common stock with a holding obligation arising from share-based remuneration for financial years 2020 to 2023 (2023: 112,969). The expenses and the corresponding allowance against the cash reserve for the personal cash investment amount of the eligible active Board of Management members and senior department heads amount to € 4,682,583 (2023: € 21,776,062). The share-based remuneration component is revalued at its fair value at each balance sheet date between the grant date and the