HSH Nordbank presents new remuneration system for members of Management Board

Hamburg/Kiel, December 2, 2009 - The Chairman of the HSH Nordbank Supervisory Board, Hilmar Kopper, presented the new remuneration system for members of the Bank’s Management Board at a press conference today.

The remuneration system meets all the more stringent statutory requirements, such as the Act on the Adequacy of Managerial Salaries and the Minimum Requirements for Risk Management (MaRisk) set by the German Federal Financial Supervisory Authority. It is understood that the recommendations of the Corporate Governance Codex have been observed and that special attention was turned to being consistent with the guarantee agreement signed by the federal states.

The following principles apply:

- - long evaluation period,

- - claim for variable remuneration not until dividends can be paid

- payout over several years,

- possibility of recovery of payments not yet made,

- - payments to be limited upon termination of employment

The monetary remuneration of each member of the Management Board is limited by the guarantee agreement signed by the federal states to EUR 500,000 as long as HSH Nordbank AG is not in a position to pay dividends. Not until this is the case points for claims in the meantime acquired can be converted into effective claims for variable, performance based remuneration. These will then be paid out in the following three years. The possibility of a retroactive reduction is integral part of the contract. The new compensation system allows for retirement provisions equal 20% of the fixed salary.

HSH Nordbank intends to still forecast losses on a quarterly basis until the end of 2010, as of 2011 the bank will operate at a profit again. The Bank currently plans to be able to pay dividends again for fiscal 2012. Accordingly, variable remuneration to the Management Board are ruled out before this time. Management Board members will not be entitled to claim variable remuneration until dividends can be paid. Even when the Bank is capable of paying dividends, such remuneration will not be paid out immediately, but will be spread over three years and payable in equal parts. In this connection up to 75% of outstanding payments are subject to recovery if the Supervisory Board subsequently takes a critical view of the quality of the work to be paid for. It is intended and possible to thereby distinguish between individual members of the Management Board.

“We have found a satisfactory balance between the demands to limit the remuneration of members of the Management Board and link variable payments to the Bank’s sustained and long-term success on the one hand, and acquiring excellent professionals to deal with the most demanding restructuring activities in the German banking sector“, says Supervisory Board Chairman Hilmar Kopper.

On December 4 the remuneration system is due to be approved at the next ordinary meeting of the Supervisory Board.