Bosses Get Pay Hike
October 17, 2006
A survey of executive pay by a shareholder action group has showed that board directors in Germany granted themselves pay rises of 11 percent last year when wage-earners were barely keeping up with inflation of 2 to 3 percent.
The average chief executive at one of Germany's leading companies had a salary of 3 million euros ($3.8 million) annually, and other board directors grossed an average 1.7 million euros, the German Society for the Protection of Shareholders (DSW) said.
DSW secretary Ulrich Hocker ranked German executive pay in the upper quarter among European companies. The figures were compiled from corporate accounts published in annual reports.
Ackermann still on top
Deutsche Bank chief executive Josef Ackermann was again the highest-paid German CEO, grossing 8.4 million euros in basic salary alone last year, up from 6.2 million euros in 2004.
In second and third places were the chief executives of DaimlerChrysler, with 5.2 million euros and SAP, with 4.7 million euros, DSW estimated.
The CEOs of airline Lufthansa and Postbank, Wolfgang Mayrhuber and Wulf von Schimmelmann were among the "lowest" paid, pocketing 1.3 million euros and 1.8 million euros respectively.
Reluctant to divulge
Meanwhile, a number of top German companies are still reluctant to publish the salaries of their chief executives and board members, even though they will be legally obliged to do so from next year, the study showed.
Car makers such as DaimlerChrysler and BMW or reinsurance giant Munich Re have yet to publish a detailed breakdown of the salaries paid to their chief executives.
As many as seven of the 30 companies listed in the blue-chip DAX index have not published the individual salaries of their board members, Hocker said.
In addition to DaimlerChryler, BMW and Munich Re, detergents maker Henkel, chemicals giant BASF, health care group Fresenius Medical Care and industrial conglomerate Linde refused to publish their executives' salaries.
But under a law passed by the previous government of former Chancellor Gerhard Schröder, companies listed in Germany will be obliged to publish such information from next year.
Only if 75 percent of shareholders at a company's annual meeting vote against publication can an exemption be made.
But for those companies that do publish, a comparison is still difficult because there are as yet no standard rules as to what must be included in salaries, particularly with regard to share option schemes and other performance-related bonuses, according to DSW.