compensation

noun · Entschädigung

Compensation routes four ways in German, Vergütung when work is paid, § 611a Abs. 2 BGB, Abfindung when employment ends, Schadensersatz when damage is repaired, Entschädigung for the special-sacrifice cases, expropriation first among them, Art. 14 Abs. 3 GG. The reflex Entschädigung is right in exactly one of the four.

Which translation, when

Entschädigungthe special-sacrifice word, expropriation and quasi-expropriation, Art. 14 Abs. 3 GG with its Junktim, the authorising statute must itself settle kind and measure. Right where the state takes, wrong where an employer pays.

Vergütungpay for work, § 611a Abs. 2 BGB for employees, § 87 Abs. 1 AktG for the board, the word of compensation packages and Vergütungsausschüsse.

Abfindungthe exit payment, and German law grants none automatically, it flows from the § 1a KSchG offer, from court dissolution, §§ 9, 10 KSchG, or from bargaining.

Why

German pays under four different names and the reason picks the word. Work earns Vergütung, § 611a Abs. 2 BGB, at board level § 87 Abs. 1 AktG, so executive compensation is Vorstandsvergütung and the compensation committee der Vergütungsausschuss. Endings earn Abfindung, and the English redundancy-pay instinct needs correcting on arrival, German dismissal law knows no general severance entitlement, die Abfindung comes from the employer’s § 1a KSchG offer in operational dismissals, from court dissolution against severance, §§ 9, 10 KSchG, from a Sozialplan where one is negotiated, § 112 BetrVG, or from the bargaining table. Damage earns Schadensersatz, the damages world. And Entschädigung, the machine’s favourite, belongs to special sacrifice, above all expropriation, where Art. 14 Abs. 3 GG adds the Junktim, only a statute that itself settles kind and measure of the Entschädigung can authorise the taking. One neighbour deserves its own name, the commercial agent’s termination compensation is der Ausgleichsanspruch, § 89b HGB, a statutory institution, not an Entschädigung.

Typical mistakes

Entschädigung für das Gehalt reads like an expropriation file, pay is die Vergütung, § 611a Abs. 2 BGB, § 87 Abs. 1 AktG for the board, and the compensation committee is der Vergütungsausschuss.
Severance is not automatic, German dismissal law knows no general Abfindungs-Anspruch, die Abfindung flows from the § 1a KSchG offer, from court dissolution, §§ 9, 10 KSchG, from a Sozialplan, § 112 BetrVG, or from negotiation, so translated redundancy-pay expectations import a statute Germany never passed.
The commercial agent’s compensation is der Ausgleichsanspruch, § 89b HGB, a claim of its own, and Entschädigung there misfiles a statutory institution.

What matters

Termination negotiations run on the routed word: the executive’s compensation is die Vergütung while employed, § 87 Abs. 1 AktG, die Abfindung on exit, bargained or via §§ 9, 10 KSchG, never an automatic entitlement, and the damage claim, if any, is Schadensersatz. The letter offering Entschädigung has accidentally opened an expropriation file.

Authority

Art. 14 Abs. 3 GG
§ 611a Abs. 2 BGB
§ 87 Abs. 1 AktG
§ 1a KSchG
§§ 9, 10 KSchG
§ 112 BetrVG
§ 89b HGB

What the machine misses

Compensation defaults to Entschädigung or the anglicism Kompensation in machine output whatever is being paid, and German routes the money by reason, Vergütung for work, Abfindung for endings, Schadensersatz for damage, Entschädigung for special sacrifice. The default is wrong three times out of four, and the fourth, expropriation, is the one context the translated commercial document almost never means.

Examples

executive compensation	die Vorstandsvergütung
severance compensation	die Abfindung
compensation for expropriation	die Enteignungsentschädigung
compensation committee	der Vergütungsausschuss