Manage­ment Board Com­pen­sa­ti­on in the DAX and MDAX 2018 and chan­ges due to ARUG II and DCGK

CORPORATE FINANCE No. 09/10 -

Prof. Dr. Alex­an­der Götz / Moritz Stahl, B.A.

This arti­cle con­ti­nues the ana­ly­sis of manage­ment board com­pen­sa­ti­on in the DAX and MDAX from pre­vious years. In addi­ti­on to the pre­sen­ta­ti­on of the abso­lu­te amount of the indi­vi­du­al remu­ne­ra­ti­on com­pon­ents over time, an ana­ly­sis is made with regard to “pay for per­for­mance” by com­pa­ring the com­pen­sa­ti­on of the Board of Manage­ment with EBIT. In addi­ti­on, ARUG II and in par­ti­cu­lar the new draft of the Cor­po­ra­te Gover­nan­ce Code will be dis­cus­sed, which will ent­ail con­si­derable chan­ges to the remu­ne­ra­ti­on sys­tems, espe­cial­ly with regard to the long-term incen­ti­ve ele­ments. In this con­text, the sta­tus of the so-cal­led Share Owners­hip Pro­grams in DAX and MDAX will be exami­ned.

 

I. Intro­duc­tion

II. Over­view of Manage­ment Board Com­pen­sa­ti­on in accordance with ARUG II and Cor­po­ra­te Gover­nan­ce Code

III. Empi­ri­cal fin­dings of the ana­ly­sis 2016 to 2017

IV. Con­ti­nua­tion of the empi­ri­cal ana­ly­sis of the remu­ne­ra­ti­on struc­tures and the chan­ge in the com­pen­sa­ti­on sys­tems of DAX and MDAX com­pa­nies in 2018

1. Inves­ti­ga­ti­on pro­gram­me and data­ba­se

2. Eva­lua­ti­on and pre­sen­ta­ti­on of the results

a) Abso­lu­te com­po­si­ti­on of the average remu­ne­ra­ti­on of the Board of Manage­ment per head (exclu­ding pen­si­on expen­ses)

b) Total Exe­cu­ti­ve Board com­pen­sa­ti­on in rela­ti­on to the company’s ear­nings size EBIT

c) Total Exe­cu­ti­ve Board com­pen­sa­ti­on in rela­ti­on to per­son­nel expen­ses

V. Ana­ly­sis Of Share Owners­hip Pro­grams

VI. Sum­ma­ry and con­clu­si­ons

 

I. Intro­duc­tion

For more than ten years now, the­re has been an inten­si­ve dis­cus­sion about the com­pen­sa­ti­on of the Manage­ment Board. ARUG II and the new­ly adop­ted Ger­man Cor­po­ra­te Gover­nan­ce Code (DCGK) are once again fuel­ling the dis­cus­sion. The­re­fo­re, in addi­ti­on to the empi­ri­cal fin­dings for the year 2018, this arti­cle is inten­ded to pro­vi­de a brief over­view of the most important recom­men­da­ti­ons on Exe­cu­ti­ve Board remu­ne­ra­ti­on in the GCGC.

In addi­ti­on, the stu­dy on exe­cu­ti­ve board remu­ne­ra­ti­on of DAX and MDAX com­pa­nies from 2018 will be expan­ded to inclu­de the data for 2017 and the data for 2018. For this pur­po­se, the abso­lu­te and rela­ti­ve deve­lo­p­ment of Exe­cu­ti­ve Board remu­ne­ra­ti­on is pre­sen­ted. In addi­ti­on, the indi­vi­du­al com­pen­sa­ti­on com­pon­ents (fixed, STI and LTI) are eva­lua­ted. In addi­ti­on, ratio indi­ca­tors are for­med, on the one hand in com­pa­ri­son to the EBIT of the com­pa­ny and on the other hand in rela­ti­on to the average per­son­nel expen­ses of the respec­ti­ve com­pa­ny. The­se key figu­res pro­vi­de a use­ful bench­mark, par­ti­cu­lar­ly in the con­text of the appro­pria­teness requi­re­ments of the legis­la­tor. The ratio of Manage­ment Board remu­ne­ra­ti­on to EBIT is a simp­le and good indi­ca­tor over time of the extent to which the princip­le of “pay for per­for­mance” is being fol­lo­wed, which will also have to be repor­ted on in the remu­ne­ra­ti­on report in future.

Con­ti­nue rea­ding.…

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