Siemens chairman to meet
By Daniel Schäfer in Frankfurt
and Richard Milne in London
Published: January 14 2010 22:39
| Last updated: January 14 2010 22:39
Gerhard Cromme, chairman of
ThyssenKrupp, and the chief financial officers of both conglomerates
will meet investors on Friday in an unusual joint move ahead of the first
shareholder votes on executive pay in Germany.
The meeting in Munich is considered
extraordinary by investors as it highlights the anxiety at German blue chip
companies after a passage of a law that gives shareholders the chance to
approve or reject executive salary schemes.
One investor told the Financial Times: “It is
unusual to meet two chief financial officers and a chairman like this.”
The move comes after Germany
passed a law on directors’ pay last year, which included the possibility
of a non-binding vote on remuneration.
The law brought the country into line with
the UK and the Netherlands, where it is common practice for shareholders to
vote on executive remuneration and where companies consult investors
regularly about such issues.
One Siemens director said: “ThyssenKrupp and
Siemens are the first companies [where investors will have the chance to
vote on pay], so it is clear that there will be a more general debate.”
The director played down the relevance of
Friday’s meeting with several key investors, among them DWS, Germany’s
largest institutional investor, Hermes, the UK activist investor, and VIP, a
German adviser for institutional investors. He described it as a “routine
conversation” and an effort to save time for all parties involved.
The meeting is also designed to drum up
crucial shareholder support for Siemens’ plan to settle damages claims with
several former managers over a bribery scandal. The settlements
would be rejected if
more than 10 per cent of all shareholders object.
Both ThyssenKrupp and Siemens declined to
comment on the meeting.
The pay policy of Siemens, whose chief
executive Peter Löscher was one of the best-paid managers in Germany with
€7.1m, has attracted criticism from investors, who see Siemens’ bonus system
as too focused on the short term.
In spite of the criticism, directors at both
conglomerates expect broad approval at their annual meetings, to be held
But another point of shareholders’ criticism
could indeed trigger changes – Siemens’ linkage of non-executive directors’
pay to the conglomerate’s earnings.
One Siemens director said the company would
be willing to revise this.
“We have always been prepared to change this
within a few years, if there is a broad consensus in favour of a system”
without performance-linked pay, he said.