Audi 2009 Annual Report Download - page 241

238
Code amended in 2009
On August 5, 2009, the Federal Ministry of Justice announced a new version of the German Cor-
porate Governance Code dated on June 18, 2009. The Board of Management and Supervisory
Board of AUDI AG discussed the amendments at length during the past fiscal year and passed
the appropriate resolutions.
Implementation of the recommendations and suggestions
The deviations from the recommendations made in the Code in the version of June 6, 2008, as
declared by the Board of Management and Supervisory Board of AUDI AG, were unchanged dur-
ing the period up to the announcement of the new version of the Code on August 5, 2009. Ref-
erence is made here to the Corporate Governance section of the 2008 Annual Report.
Since the announcement of the version dated June 18, 2009, the recommendations in the Code
have been met with the following exceptions:
The recommendations of the German Corporate Governance Code with regard to an excess as
part of D&O insurance arrangements (Section 3.8, Para. 2, Sentence 2 of the Code), as well as
the demanding, relevant comparison parameters for variable remuneration components relating
to the remuneration of the Board of Management (Section 4.2.3, Para. 2, Sentence 2 of the Code)
and the exclusion of a subsequent change to the performance targets or comparison parameters
(Section 4.2.3, Para. 2, Sentence 3 of the Code), have been redefined. These recommendations
were not complied with at the time of submission of the Declaration of Compliance. The insurance
contract for D&O insurance has been modified effective January 1, 2010 in accordance with the
Code. On February 22, 2010, the Supervisory Board approved a new remuneration system for
the members of the Board of Management, adapting the appropriate regulations in accordance
with the Code in line with the recommendations of Section 4.2.3, Para. 2, Sentences 2 and 3.
There has not been any provision to date for a cap on the severance payments agreed when ne-
gotiating the contracts of the Board of Management (Section 4.2.3, Para. 3 and 4 of the Code),
as in the past this cap has been the subject of critical legal debate. In practice, new possibilities
have emerged that make it appear sensible to take account of the corresponding recommenda-
tion of the Code when renegotiating the contracts of the Board of Management. In addition, the
Supervisory Board has not formed a nominating committee (Section 5.3.3 of the Code). In its
opinion, such a committee would merely increase the number of committees without noticeably
improving the work done by the Supervisory Board. The elections to the Supervisory Board do
not take the form of elections of individuals (Section 5.4.3, Sentence 1 of the Code). Elections by
list are common practice in democratic elections.
Three departures are made from the suggestions in the Code:
The Annual General Meeting is not broadcast over the Internet (Section 2.3.4 of the Code) so as
not to infringe on the privacy rights of individual stockholders. For this reason, the provision for
absent stockholders to even be able to contact the Company’s voting proxy during the Annual
General Meeting (Section 2.3.3, Sentence 3, 2nd half of sentence of the Code) is superfluous.
AUDI AG has still not adopted the proposal in the Code that the long-term success of the com-
pany be taken into account when calculating the performance-based remuneration of the Super-
visory Board (Section 5.4.6, Para. 2, Sentence 2 of the Code). It will continue to follow the dis-
cussion in professional circles as to the specific form to be taken by such variable components
before changing its stance on this matter.
Particulars pursuant to Section 6.6 of the Code
No reportable acquisition or sales transactions were conducted during the past fiscal year.
Stock option plans and similar securities-based incentive arrangements
AUDI AG does not offer any such plans or incentive arrangements.
System of remuneration
The basic principles of the remuneration system for the members of the Board of Management are
outlined in the Notes to this Annual Report under “Details of the Supervisory Board and Board of
Management.” This information is also available on the Company’s website (www.audi.com/notes).
Declaration relating to the Code on the Internet
The joint declaration of the Board of Management and Supervisory Board of AUDI AG on the
recommendations of the German Corporate Governance Code was published on the Audi website
(www.audi.com/cgk-declaration) on November 23, 2009.
Corporate Governance