German executive pay remains opaque

Germany’s top companies are still too secretive about how much their senior executives earn, the country’s leading investors’ association complained on Thursday.

Despite legal changes in 2005 that forced listed companies to publish executives’ earnings on an individual basis, many companies still use loopholes – for instance over pension and other entitlements – to hide “the real costs to shareholders of executive boards”, according to Ulrich Hocker, director of the DSW investors’ association.

Speaking at the launch of a DSW report on 2006 executive pay in listed companies, he said “details of what companies actually pay their top executives” were still missing from many annual reports.

The study showed that Josef Ackermann, Deutsche Bank chief executive, was the best paid among DAX companies, earning €13.2m ($17.8m) last year – €9.4m in salary payments and €3.8m in stock options. He earned €11.9m in 2005.

Average earnings for executive board members in the 30 DAX companies were €1.9m, compared with €1.7m in 2005, a rise of 11.7 per cent. In France a comparable figure for the largest 40 companies in 2006 was €2.3m, while average executive earnings for the FTSE100 in the UK were €1.7m, according to the DSW.

The 2006 financial year was the first time listed companies were obliged to publish the extra executive pay data. The rule changes towards greater transparency followed public disquiet over high executive salaries and company efforts to disguise them.

Top earners• Josef Ackermann, Deutsche Bank €13.2m• Wolfgang Reitzle, Linde €7.4m• Dieter Zetsche, DaimlerChrysler €7.2m• Harry Roels, RWE €6.9m• Hans-Joachim Körber, Metro €4.7mIncludes salary and value of stock optionsSource: DSW German Investors’ Association

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