Mercedes 2008 Annual Report Download - page 120

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General conditions
Daimler AG is a stock corporation with its domicile in Germany.
The legal framework for corporate governance therefore derives
from German law, in particular the Stock Corporation Act, the
Codetermination Act and legislation concerning capital markets,
as well as from the Articles of Incorporation of Daimler AG.
As our shares are also listed on the New York Stock Exchange,
we are obliged to adhere to the capital-market legislation and
listing requirements applicable in the United States. A description
of the differences between Daimler’s corporate governance
principles and those applicable to US companies under NYSE
corporate governance listing standards can be seen on our
website at www.daimler.com/corpgov_e.
Daimler’s corporate bodies
Shareholders and the Annual Meeting. The company’s sha-
reholders exercise their rights and cast their votes in the Annual
Meeting. Each share in Daimler AG entitles its owner to one vote.
There are no Daimler shares with multiple voting rights, no prefer-
red stock, and no maximum voting rights.
Various important decisions can only be made by the Annual Mee-
ting. These include the decision on the appropriation of distri-
butable profits, the ratification of the actions of the members of
the Board of Management and the Supervisory Board, the elec-
tion of the external auditors and the election of members of the
Supervisory Board representing the shareholders. The Annual
Meeting also makes other decisions, especially on amendments to
the Articles of Incorporation, capital measures, and the approval
of certain intercompany agreements.
The influence of the Annual Meeting on the management of the
company is limited by law, however. The Annual Meeting can only
make management decisions if it is requested to do so by the
Board of Management.
Separation of corporate management and supervision.
Daimler AG is obliged by the German Stock Corporation Act to
apply a dual management system featuring the strict separation
of the two boards responsible for managing and supervising the
company (two-tier board). With this system, the company’s Board
of Management is responsible for the executive functions, while
the Supervisory Board monitors the Board of Management. No
person may be a member of the two boards at the same time.
Supervisory Board. In accordance with the German Codetermi-
nation Act, the Supervisory Board of Daimler AG comprises
20 members. Half of them are elected by the shareholders at the
Annual Meeting. The other half comprises members who are
elected by the company’s employees who work in Germany.
The members representing the shareholders and the members
representing the employees are equally obliged by law to act in
the company’s best interests. The Supervisory Board has also
decided that more than half of the members of the Supervisory
Board representing the shareholders are to be independent in
order to ensure that the Board of Management is advised and
monitored independently. The Supervisory Board of Daimler AG
fulfills this criterion in its present composition.
The Supervisory Board monitors and advises the Board of Mana-
gement in its management of the company. It has given itself
a set of rules of procedure, has retained the right of approval for
transactions of fundamental importance, and has explicitly for-
mulated the Board of Management’s duties of information and
reporting. The Supervisory Board’s duties also include appoint-
ing and recalling members of the Board of Management, as well
as deciding on their individual remuneration, whereby setting
the details of the remuneration of the Board of Management’s
members is delegated to the Presidential Committee. The
competence to pass resolutions on the structure of the Board of
Management’s remuneration system and the key contractual
elements was returned from the Audit Committee to the plenum
of the Supervisory Board due to changes in the German
Corporate Governance Code that were made in the summer of
2008. The Supervisory Board also reviews the individual and
consolidated annual financial statements and reports to the
Annual Meeting on the results of its review.
Corporate Governance Report