DaimlerChrysler Reforms Pay For Supervisory Board Members

By Agence France-Presse The German-U.S. auto giant DaimlerChrysler is planning to modify its system of remuneration for supervisory board members amid the ongoing controversy about executive pay in Germany. In the invitation to its annual shareholder meeting published on its Web site on Feb. 23, DaimlerChrysler said it planned to index around 25% of supervisory board members' pay to the performance of the company's shares on the stock exchange. The proposal, which seeks to temper some of the recent controversy about fat-cat corporate greed, is to be put to the vote of shareholders at the annual meeting on April 7. While the total amount of remuneration was to remain "largely unchanged, approximately a quarter of this amount is to be paid as variable remuneration in the form of phantom shares," the company said. Supervisory board members would be paid a basic fixed sum of 55,000 euros (US$68,750), with the supervisory board chairman to receive three times that amount and the deputy chairman to receive twice that amount. On top of this, board members would be paid a performance-based remuneration in the form of phantom shares. The phantom share would be equal in value of the price of a share in the company at the time the phantom share was granted, plus or minus the gains or losses in the share price at the end of the holding period. Such a system of payment differs from the usual stock-option schemes offered to company managers. At the same time, DaimlerChrysler said it would extend the contract of its supervisory board chairman Hilmar Kopper until 2007. Kopper, 68, was a former chairman of Deutsche Bank until 1997. Deutsche Bank is one of DaimlerChrysler's biggest shareholders with a stake of 11.8%. Copyright Agence France-Presse, 2004