Germany to require CEOs to publish their salaries

18th May 2005, Comments 0 comments

18 May 2005, BERLIN - Germany's cabinet on Wednesday approved a bill which will require top corporate executives to publish their salaries and other benefits, Justice Minister Brigitte Zypries said.

18 May 2005

BERLIN - Germany's cabinet on Wednesday approved a bill which will require top corporate executives to publish their salaries and other benefits, Justice Minister Brigitte Zypries said.

Executive board members of companies with shares traded on stock exchanges will have to reveal their pay as part of annual corporate reports under the law which will come into force from 2006, said Zypries.

Companies will also have to publish any severance pay or pension benefits included in executive contracts as well as rights to use corporate-owned homes or staff such as personal secretaries.

"This is about creating transparency," said Zypries, who insisted the law's timing was not linked to North Rhine-Westphalia state elections this Sunday where Chancellor Gerhard Schroeder's Social Democrats are struggling to win back support of left-wing voters.

Any companies which fail to report executive pay face a maximum fine of EUR 50,000.

There has been widespread public anger over high salaries paid to CEOs in Germany amid continued unemployment of 12 percent with 4.9 million people jobless. German CEOs, however, earn far less than the hundreds of millions of dollars in salaries and benefits paid to some top US executives.

The bill, which is expected to win easy parliamentary approval, contains an 'opt-out clause' allowing shareholders to vote against publishing the salaries of their executives.

This must be approved by at least 75 percent of all shareholders and is valid for five years, Zypries said, adding: "It is to give shareholders control."

DPA

Subject: German news

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