Cultural Issues Blur Daimler/Chrysler Exec Pay

As the scheduled Sept. 18 merger of Chrysler Corp. and Daimler-Benz AG draws closer, executive pay has become an issue. As Jrgen Schrempp, the German automaker's chairman, was collecting under $2 million last year, Robert J. Eaton, his Chrysler counterpart, was receiving just under $10 million in salary, bonuses, and stock options. Meanwhile, Robert Lutz, Chrysler's outgoing vice chairman, took home $15.7 million. Schrempp says the pay issue is complicated by Germany's egalitarian corporate culture, with worker representation on the board of directors militating against impressive pay packages for top managers. "One answer is to reduce the fixed elements and add big performance incentives," says Schrempp.

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