Corporate governance report

The Executive Board and the Supervisory Board have prepared this compensation report, in which details are given of the compensation of the members of the Executive Board and Supervisory Board. This compensation report is a constituent part of the corporate governance report and the Group management report.

Executive Board Compensation
The compensation for the members of the Executive Board comprises three components: A fixed annual salary, a performance-related bonus and a payment related to the Company's long-term performance (defined as value added) and longterm share price.

The Supervisory Board is informed regularly by its Presiding Committee on the structure of the compensation system for the Executive Board. The Presiding Committee is responsible for determining the compensation of the Executive Board.

Annual Salary
The fixed annual salary is reviewed every two years. In consultation with external experts, it was set at € 642,000 (€ 578,000 until June 30, 2006) for the Chairman of the Executive Board and € 428,000 (€ 385,000 until June 30, 2006) for the other members of the Executive Board with effect as of July 1, 2006. In addition to the fixed salary, the members of the Executive Board also receive fringe benefits (benefits in kind) in the form of insurance cover and the use of company cars, the value of which is shown in accordance with applicable tax law.

Bonus
The relevant targets for the variable components of compensation are agreed upon between the Presiding Committee of the Supervisory Board and the Executive Board at the beginning of each year. The level of bonuses depends on the development of the Group’s earnings before taxes (EBT). If the relevant targets are achieved, the bonus amounts to 83% of the fixed annual salary (until June 30, 2006: 66.7%). Bonus payments are not made if at least 50% of the EBT goal is not reached and is limited by a cap of 150% of the target value.

Long-Term Incentive Plan
Compensation with a long-term incentive element is paid in accordance with a long-term incentive plan (LTI), which has the following main features: If the value added achieved in a certain year exceeds the agreed minimum for that year, the members of the Executive Board are granted phantom shares in the form of so-called performance share units (PSU). If Bilfinger Berger shares under perform compared with the comparative index, the MDAX, the number of PSUs granted can be reduced by up to 20%. The value of the PSUs granted varies during a waiting period of two years in line with the development of the Bilfinger Berger share price. After the end of the waiting period, the existing phantom shares are paid out – 65% in cash (taxable) and 35% in Bilfinger Berger shares which may not be sold until another two-year lockup period has expired.