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.

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