Mercedes 2009 Annual Report Download - page 172

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Section 161 of the German Stock Corporation Act (AktG) requires
the Board of Management and the Supervisory Board of a listed
stock corporation to declare each year that the recommendations
of the “German Corporate Governance Code Government Com-
mission” as published by the Federal Ministry of Justice in the
official section of the electronic Federal Gazette have been
and are being met or, if not, which recommendations have not
been or are not being applied, with reasons. The declaration is
to be made permanently accessible on the company’s website.
The German Corporate Governance Code (“Code”) contains rules
with varying binding effects. Apart from outlining aspects of the
current German Stock Corporation Act, it contains recommenda-
tions from which companies are permitted to deviate; if they do
so, however, they must disclose this fact each year. Pursuant to
Section 161 of the German Stock Corporation Act as amended by
the German Accounting Law Modernization Act of May 25, 2009,
reasons must be given for any deviations from the Code. The
Code also contains suggestions, which can be ignored without
giving rise to any disclosure requirement.
The Board of Management and the Supervisory Board of Daimler
AG have decided to disclose – and give reasons for – not only
deviations from the Code’s recommendations (see I.) but also –
without being legally obliged to do so – deviations from its
suggestions (see II.).
For the period from December 2008 until August 4, 2009, the
following declaration refers to the Code as amended on June 6,
2008. For the corporate governance practice of Daimler AG since
August 5, 2009, this declaration refers to the requirements of
the Code as amended on June 18, 2009 and published in the
electronic Federal Gazette on August 5, 2009.
The Board of Management and the Supervisory Board of Daimler
AG declare that in general both the recommendations and the
suggestions of the “German Corporate Governance Code Govern-
ment Commission” have been and are being met. The Board of
Management and the Supervisory Board also intend to follow the
recommendations and suggestions of the German Corporate
Governance Code in the future. The following recommendations
and suggestions are the only ones that have not been and are
not being applied:
I. Deviations from the recommendations of the German
Corporate Governance Code
1. Deductible with the D&O insurance (Code Clause 3.8,
Paragraph 2). The directors’ and officers’ liability insurance
(D&O insurance) obtained by Daimler AG excludes coverage for
intentional acts and omissions and for breaches of duty know-
ingly committed. As a result, the question of whether or not a
deductible is advisable arises only in the context of negligent
breaches of duty.
Previously, the D&O insurance of Daimler AG did not provide for a
deductible in cases of negligence by members of the Supervisory
Board. When the D&O insurance cover is renewed with effect as
of April 1, 2010, an appropriate deductible for members of the
Supervisory Board will be provided for.
In the past, the D&O insurance of Daimler AG already provided
for a deductible in cases of ordinary or gross negligence by
members of the Board of Management. When the D&O insurance
cover is renewed with effect as of April 1, 2010, this will be
adjusted to the new legal situation. The previous possibility of
making a deduction from the variable portion of the remuner-
ation of the member of the Board of Management concerned in
any cases of gross negligence will thus be obsolete.
2. Remuneration of the Supervisory Board (Code Clause
5.4.6, Paragraph 2, Sentence 1). The members of the Supervi-
sory Board of Daimler AG receive adequate remuneration that
contains fixed and function-related elements as well as attendance
fees. The Articles of Incorporation provide for a base annual fee
for each Member of the Supervisory Board. This base annual fee
increases in line with the respective area of responsibility if a
member exercises additional functions within the Supervisory
Board such as membership or the chair of a committee or the
Chair or Deputy Chair of the Supervisory Board. If a member of
the Supervisory Board exercises several of the aforementioned
functions, he or she is paid an annual fee solely for the function
exercised with the highest remuneration. We believe that a
function-related remuneration system is more appropriate for the
oversight role of Supervisory Board members than performance-
related remuneration because it eliminates any potential conflict-
ing interests with possible effects on performance criteria that
might arise from decisions of the Supervisory Board. The Super-
visory Board therefore does not receive performance-related
remuneration.
Declaration of Compliance with the
German Corporate Governance Code