Study examines income of top managers

According to a study published in December 2003, the average annual income of management board members at Germany’s 30 leading companies was EUR 1.25 million in the 2002 financial year, an increases of 7.5% on 2001. Trade unions are calling for regular public monitoring of top management compensation.

In December 2003, the leading German association of private investors (Deutsche Schutzvereinigung für Wertpapierbesitz, DSW) published a study on management board members' income at Germany’s 30 leading public limited companies listed on the German Stock Exchange Index (Deutscher Aktienindex, DAX) - see the table below.

The study found that the average annual income of management board members was EUR 1.25 million in the 2002 financial year, compared with EUR 1.16 million in 2001. The highest management remuneration was paid at the motor manufacturer, DaimlerChrysler, where the average annual income of a board member was EUR 3.7 million, followed by the leading German bank, Deutsche Bank, which paid on average EUR 2.1 million to its board members. At the bottom of the table was Infineon Technologies, with an average annual income for board members of about EUR 280,000. The heads of management boards received on average 1.75 times more than ordinary board members.

In comparison with the previous year, the remuneration of top managers grew on average by about 7.5% in 2002. The increases varied, however, between 130% at DaimlerChrysler and only 1% at BMW and MAN, while top managers' compensation decreased in 11 out of the 30 leading companies

Most of the figures presented by the DWS study are estimates based on evaluations of annual company reports as well as a survey conducted among all the companies involved. Only six of the 30 companies publish the individual incomes of their management board members in their annual reports. Regular public monitoring of management compensation has been demanded not only by the German Federation of Trade Unions (Deutscher Gewerkschaftsbund, DGB) but also by the German Government Commission on Corporate Governance (Regierungskommission Deutscher Corporate Governance) which presented a German Corporate Governance Code in May 2003, stating that individual board members' income should 'be published on the company’s website in plainly understandable form and be detailed in the annual report'.

Average annual income of management board members at Germany’s 30 leading public limited companies in 2001 and 2002 (EUR)
Rank Company 2002 2001 Change 2001-2 in %
1 DaimlerChrysler* 3,694,545 1,600,000 130.91
2 Deutsche Bank* 2,063,500 2,936,925 -29.74
3 Volkswagen* 1,821,884 1,940,050 -6.09
4 Schering 1,713,211 1,609,507 6.44
5 Deutsche Telekom* 1,677,731 1,581,714 6.07
6 Metro* 1,663,158 1,621,053 2.60
7 Siemens* 1,588,946 984,456 61.40
8 BMW* 1,551,499 1,531,429 1.31
9 E.ON* 1,507,692 1,353,846 11.36
10 BASF* 1,497,797 1,062,857 40.92
11 RWE 1,429,688 1,403,238 1.88
12 Allianz* 1,386,869 1,439,691 -3.67
13 Altana* 1,212,446 1,466,667 -17.33
14 Commerzbank 1,189,389 1,237,454 -3.88
15 Linde* 1,107,386 950,000 16.57
16 TUI* 1,098,222 971,111 13.09
17 Henkel 1,053,947 1,100,606 -4.24
18 HypoVereinsbank 1,043,841 1,944,210 -46.31
19 Münchener Rück 982,609 638,298 53.94
20 Continental* 967,742 495,356 95.36
21 SAP* 966,115 1,217,620 -20.66
22 Deutsche Post* 964,798 682,353 41.39
23 Adidas-Salomon* 959,181 928,693 3.28
24 Bayer 848,898 948,886 -10.54
25 Deutsche Lufthansa* 787,234 531,915 48.00
26 ThyssenKrupp* 775,400 784,314 -1.14
27 Deutsche Börse 621,404 552,200 12.53
28 MAN* 535,238 530,000 0.99
29 Fresenius Medical Care* 521,095 662,645 -21.36
30 Infineon Technologies* 278,261 202,435 37.46
. Average 1,250,324 1,163,651 7.45

* estimated by DSW.

Source: Deutsche Schutzvereinigung für Wertpapierbesitz (DSW) 2003.

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