Corporate Governance at Beiersdorf
Good Management has a Name:
Corporate Governance
Beiersdorf AG welcomes the German Corporate Governance Code presented by the
Government Commission and last updated in May 2003. The Code not only creates
transparency as regards the legal framework for corporate management and supervision
in Germany, but also establishes generally accepted standards for good and
responsible company management.
Good corporate governance was a high priority at Beiersdorf even before the publication
of the Code. Close, efficient cooperation between the Executive and Supervisory
Boards, a focus on shareholder interests, open corporate communication,
proper accounting and auditing, and responsible risk management have always been
the basis of the Company’s success. As a result, compliance with the Code and its
amendments did not necessitate any fundamental changes at Beiersdorf.
We consider corporate governance to be an ongoing process and will continue to
track future developments carefully.
Declaration of Compliance
At the end of December 2004, the Executive Board and Supervisory Board of the
Company issued the declaration of compliance with the recommendations of the
Code for fiscal year 2004 in accordance with § 161 Aktiengesetz (German Stock Corporation Act). The election of the new Supervisory Board in 2004 has eliminated
the deviation reported in the declaration of compliance for the previous year, to
the effect that one member of the Supervisory Board had reached the age limit for
Supervisory Board members, and this year’s declaration of compliance was adjusted
accordingly.
The following declaration was made permanently accessible to the shareholders on
the Company’s website at www.Beiersdorf.com.
“In fiscal year 2004, Beiersdorf Aktiengesellschaft complied with, and continues to
comply with, the recommendations of the ‘Government Commission on the German
Corporate Governance Code’ in the version dated May 21, 2003, with the following
exceptions:
An individualized breakdown of the compensation paid to our Executive Board and
Supervisory Board is not provided (sections 4.2.4 sentence 2 and 5.4.5 (3) sentence
1 of the Code). One member of our Supervisory Board reached the current age limit
for Supervisory Board members (section 5.4.1 sentence 2 of the Code). This
deviation no longer applies since a new Supervisory Board was elected, effective
as of June 3, 2004.”
Remuneration of the Executive and Supervisory Boards
The remuneration of individual Executive Board members consists of a fixed and a
variable, dividend-based component. In addition, all Executive Board members have
been granted pension commitments, and each Executive Board member is also provided
with a company car. Remuneration for the Executive Board mainly depends on the
respective Executive Board member’s tasks, personal performance, and the entire
Executive Board’s performance, as well as the economic situation and the Company’s
success and future prospects, including in comparison with its peer group. The
Executive Committee regularly discusses and reviews the remuneration system for
the Executive Board. Further details on the remuneration of the Executive Board for
fiscal year 2004 can be found in the Group notes.
According to the Articles of Association the remuneration paid to individual Supervisory
Board members consists of a fixed and a variable, dividend-based component.
In addition, Supervisory Board members are reimbursed for cash expenses. By way
of a resolution passed by the Ordinary General Meeting in 2004, remuneration for
the Supervisory Board was reduced with effect from fiscal year 2004: the fixed
component was increased slightly and the variable component reduced considerably,
as this had increased substantially due to the dividend increases of previous years,
particularly in comparison with many companies on the DAX. This move also redressed
the imbalance between the fixed and variable components somewhat. The
remuneration for the Chairman of the Supervisory Board was increased slightly in
relation to the basic remuneration for the Supervisory Board, due to the greater
amount of time and greater responsibility associated with this position. This move is
in line with the recommendation by the Code that allowances should be made for the
responsibility assumed and scope of the duties performed by the respective member
of the Supervisory Board, and that in particular the Chairmanship of the Supervisory
Board should be taken into consideration. The Chairman of the Supervisory
Board now receives two and a half times the basic remuneration for the Supervisory
Board while his two Deputies each receive one and a half times this amount. Members
of the Executive and Audit Committees also receive additional compensation for
their work in these committees. More information on the remuneration of our Supervisory
Board members can be found here, as well as on
our website, www.Beiersdorf.com.
In its current version, the German Corporate Governance Code recommends individualized
breakdowns of Executive Board and Supervisory Board remuneration.
To protect our Executive and Supervisory Board members’ rights of privacy, we have
decided – along with other major listed corporations – to report the Executive and
Supervisory Boards’ remuneration as a total amount, in accordance with the
statutory provisions. In our opinion, this adequately addresses the public’s and
our shareholders’ information requirements with regard to the extent of the
Company’s remuneration obligations towards its executive bodies.
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