Audi 2013 Annual Report Download - page 207

CORPORATE GOVERNANCE REPORT
CORPORATE GOVERNANCE
MANAGEMENT REPORT
204
A
CORPORATE GOVERNANCE
/ GERMAN CORPORATE GOVERNANCE CODE IN 2013
On June 10, 2013, the Federal Ministry of Justice announced a
new version of the German Corporate Governance Code dated
May 13, 2013, in the official section of the German Federal
Gazette. The Board of Management and Supervisory Board of
AUDI AG also discussed at length the recommendations and
suggestions in the Code during the past fiscal year and passed
the appropriate resolutions.
/ IMPLEMENTATION OF THE RECOMMENDATIONS
AND SUGGESTIONS
The recommendations of the Code in the version dated May 15,
2012 were largely adhered to up until the announcement of the
version dated June 10, 2013. The Supervisory Board and Board
of Management declared deviations to Section 5.1.2, Para. 2,
Sentence 3 of the Code, Section 5.4.1, Para. 2, Sentence 1 of
the Code (age limit applicable for Board of Management and
Supervisory Board members), Section 5.3.2, Sentence 3 of the
Code (independence of the Audit Committee Chairman), Sec-
tion 5.3.3 of the Code (nominating committee), Section 5.4.1,
Paras. 4 to 6 of the Code (disclosures in proposals for election),
Section 5.4.2, Sentence 3 of the Code (no more than two former
Board of Management members to sit on the Supervisory Board),
Section 5.4.3, Sentence 1 of the Code (Supervisory Board elec-
tions in the form of election of individuals), Section 5.4.6, Para. 2,
Sentence 2 of the Code (performance bases for Supervisory Board
remuneration) and Section 5.5.3, Sentence 1 of the Code (report
to the Annual General Meeting on conflicts of interest arising
and how they have been dealt with).
Over the course of 2013, the Board of Management and Super-
visory Board dealt on two occasions with the Declaration of
Conformity pursuant to Section 161 of the German Stock
Corporation Act (AktG). On May 15, 2013, both corporate bodies
declared that elections to the Supervisory Board (Section 5.4.3,
Sentence 1 of the Code) would be held as elections of individuals
as of that date. The new approach was necessitated by changes
in application. On November 28, 2013, the Board of Manage-
ment and Supervisory Board routinely determined the content
of their Declaration of Conformity pursuant to Section 161 of
the German Stock Corporation Act (AktG).
Since the publication of the new version of the Code on June 10,
2013, its recommendations have been adhered to with the
following deviations:
The recommendation pursuant to Section 4.2.2, Para. 2, Sen-
tence 3 of the Code on the ratio between the remuneration paid
to the Board of Management and that paid to senior manage-
ment and the staff as a whole was a new addition. At its meet-
ing on November 28, 2013, the Supervisory Board considered
the issues and determined that the new recommendation would
be observed as of this date. Purely as a precautionary measure,
a deviation was declared for the prior period, as it is not clear
from the rules to what extent the recommendations in question
require regulations and considerations from the Supervisory
Board if no decisions are made on the Board of Management’s
remuneration.
The remuneration structure for the members of the Board of
Management does not involve any caps either overall or with
regard to its variable components (Section 4.2.3, Para. 2, Sen-
tence 6 of the Code). The Supervisory Board believes that the
recommended upper limits for the remuneration of the Board
of Management are, in principle, reasonable both overall and
with regard to the variable components, and will calculate and
apply them accordingly. A deviation is declared until such time
as the limits are in place.
There is no age limit applicable to members of the Company’s
corporate bodies (Section 5.1.2, Para. 2, Sentence 3 of the
Code, and Section 5.4.1, Para. 2, Sentence 1 of the Code). The
ability to manage a company successfully or to monitor the
actions of the Board of Management in the capacity of a Super-
visory Board member in the requisite form does not cease to
exist upon reaching a certain age. Furthermore, imposing an
age limit could constitute a form of discrimination.
In accordance with one of the Code’s recommendations, the
Chairman of the Audit Committee should be independent
(Section 5.3.2, Sentence 3 of the Code). It is possible that the
fact that the Chairman of the Audit Committee sits on the
Board of Management of Volkswagen AG, Wolfsburg, and of
CORPORATE GOVERNANCE REPORT