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Corporate Governance – portrayed in the individual cultural and legal framework, from the standpoint of equity capital.

VIPsight is a dynamic photo archive, sorted by nations and dates, by and for those interested in CG from all over the world.

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  • written by local CG experts,
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VIPsight International

Article Index



Directors earning again

Deutsche Bank CEO Josef Ackermann got annual pay of €9.55 million in 2009 (€1.39 million the previous year). This is calculated by shareholder association Deutsche Schutzvereinigung für Wertpapierbesitz (DSW), which took a look, together with the Faculty for Controlling at TU München, at remuneration in the DAX and MDAX. On average the remuneration of a DAX manager wa €2.37 million and had risen, in parallel with again-rising company profits, by 3.1%. In the MDAX by contrast remuneration fell by 14.3% to an average of 1.08 million. The best paid MDAX manager was Herbert Lütkestratkötter of Hochtief with €4.16 million. Altogether, management costs in 2009 were 0.58% (previous year 0,5%) on average of total staff costs. On average 33.2% was paid as fixed salary, 44.4% as bonuses and 22.4% as share-price-related remuneration. According to the DSW, among bonuses short-term incentives still prevailed, with the ratio of short-term to long-term being 1.60 (previous year: 1.71). 19 DAX companies paid their ex directors after the end of their contracts a monthly pension at a certain age. Eleven DAX groups instead pay a prior fixed amount to funds or similar capital depositories, which then pay the pensions. However, the very different details meant there was no transparency, criticized the DSW. On average the study reckons €0.56 million a year in directors’ pensions in the DAX. Altogether, the DSW praises the fact that the new Act oln Appropriateness of Executive Remuneration introduced in August 2009 has led to more transparency.

High pensions of DAX directors

According to a study commissioned by the Hans-Böckler-Stiftung, DAX companies are still giving out about half in pensions of what active directors take yearly in remuneration. A total of seven million euros on average were paid out in 2009 to former members of boards as pension. Including the pension reserves for active directors, Thyssen-Krupp (€27.7 million), Deutsche Bank (€21.4 million) and Siemens (€20.6 million) spent the most on their directors’ pensions. At the bottom came Adidas (€2.2 million), SAP (€1.9 million) and Fresenius (€1.0 million). Also widespread was a “fairly low” age limit after which payments started: for half of all directors it was on completion of the 60th year of age. A quarter took their pension after 62-63, and the last quarter “only” after 65. Heinz Evers, who carried out the study on comission from the Böckler-Stiftung, questioned the often sizeable amounts of the pension promises by firms. Supervisory boards should consider whether directors ought not to make provision themselves for their old age.

Squeeze Out becomes cheaper

In a Squeeze Out the compensation will in future be less. According to a ruling by the Federal Constitutional Court, henceforth the share price in the three months before the announcement will be decisive for calculating the payment. To date the payment was oriented to the average share price in the three months before the AGM at which the Squeeze Out was decided. Corrections should according to the judges be made only where implementation of the decision after the AGM took some time and share prices rose (Aktenzeichen II ZB 18/09). This eliminates the usual procedure to date of calculating the payment according to an “inner value”.

BASF does the best IR

The business magazine Capital, together with the Deutsche Vereinigung für Finanzanalyse (DVFA) and supported by consultancy firm Deloitte, has graded Investor Relations work in the most important German and European firms for the 14th time. In 2010, Europe-wide – i.e. among the firms in EuroStoxx50 – the chemicals firm BASF was well to the fore. The second place was shared by three other German firms: software provider SAP, pharmaceuticals giant Bayer and utility RWE. In the DAX, trading group Metro headed the list, followed by Fresenius Medical Care in second place and cosmetics group Henkel and reinsurer Munich Re joint third. The winners in the MDAX are, in first to third places, chemicals group Lanxess, retailer Douglas and real-estate provider Deutsche Euroshop. In the TECDAX, biotechnology firm Morphosys came on top. It was followed by Software AG and pump maker Pfeiffer Vacuum.

BASF to the fore online too

The online consultancy NetFederation has looked at the IR websites and overall web presentation of the 110 German companies listed in the DAX, MDAX and TECDAX for the seventh year in succession. Alongside the IR pages the Public Relations, Human Resources and Corporate Social Responsibility sectors were also tested. In the last year the financial and economic crisis has played an important part, burdening the relation between company and capital market or public to such an extent as to lead to a communications crisis, NetFederation finds. Against this background, open handling of negative developments was an important component of good IR presentation. Here in 2010 NetFed found the first three places for the best online IR occupied by the same winners as the previous year: BASF, Deutsche Post and Bayer. Their IR websites were distinguished by vast quantities of information, easy and thematic navigation and exhaustive service and dialogue provision.

The story has to fit

The business report needs a thorough, future-oriented story. This was the finding of a user survey by geschäftsberichte-portal. 77% of users were by contrast against having the story also included in the status report. On the question whether authenticity and reporting efficiency were sufficient, minds were divided: 55% said that was not enough. And a good story, few pictures and shorter text were seen by 55% as not being the solution. Unanimously, respondents asserted that autonomy and the courage for new ideas was important. Two thirds said that the first impression counted and that here the title page was important. Additionally, said the majority, the total approach had to be right and the story had to be attractive.