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For the Forum report of the Siemens investor voting inclinations and decision-making criteria referenced in the article below, see


Financial Times, January 14, 2010 article


FT Home  

Gerhard Cromme, chairman of Siemens and 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 this month.

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.

© Copyright The Financial Times Ltd 2010.




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