Mercedes 2002 Annual Report Download - page 160

make a percentage deduction from the variable portion of the
remuneration of the member of the Board of Management
concerned. In terms of its economic result, this is the same as
a deductible. In the view of DaimlerChrysler AG this rule
enables individual cases to be judged more fairly on their mer-
its than the blanket approach of the Code.
2. Clause 4.3.5 (Approval of side line activities) 1
Clause 4.3.5 of the Code states that Members of the Board of
Management may only take on side line activities, in particular
Supervisory Board mandates outside the enterprise, with the
approval of the Supervisory Board.
For reasons of practicality relating to the way in which the
Supervisory Board works, such consent is granted not by the
whole Board but by the Chairman of the Supervisory Board.
For the same reason, such approval is required only in cases
where the additional activity is a paid position (but not, for
example, for honorary positions on advisory boards or boards
of governors). The Presidential Committee will be informed
about the decisions of the Chairman of the Supervisory Board
accordingly.
3. Clause 5.4.5 (Compensation of the Supervisory Board) 1
Clause 5.4.5, para. 2 of the Code states that members of the
Supervisory Board shall receive performance-related as well as
fixed compensation.
It is intended to decide about a proposal for the appropriate
amendment of the articles of association in order to award a
performance-related pay element to the members of the
Supervisory Board at a later point of time.
Clause 5.4.5, para. 3 of the Code states that payments
made by the enterprise to members of the Supervisory Board
or advantages granted for services provided individually,
in particular advisory or agency services, shall be listed sepa-
rately in the Notes to the Consolidated Financial Statements.
The company plans to list such information separately from
fiscal 2004. The shareholder representatives on the Super-
visory Board will be up for re-election in 2004. For this reason
it seems appropriate to start the separate listing from this
point in time, and, until then, to present a summarized account
of the payments or benefits granted to all members of the
Supervisory Board.
4. Clause 7.1.4 (List of third-party companies) 1
Clause 7.1.4 of the Code requires the company to publish a
list of third -party companies stating, i. a. the operating results
for the last financial year.
The company has decided not to publish the operating results
of these companies for the past financial year, firstly because
the control mechanisms of DaimlerChrysler AG are geared
not to legal entities but to business units, whose results are
shown by way of the segmental reporting, and secondly
because such disclosure of results does not provide any
meaningful information as the accounting principles on which
they are based vary from country to country. Finally, showing
individual year-end statements separately without precisely
defining which subsidiaries are included in the consolidated
accounts could be very misleading.
II. Suggestions
There is no obligation to provide any explanation for deviations
from suggestions.
The Board of Management and the Supervisory Board of
DaimlerChrysler AG declare that the suggestions of the
“German Corporate Governance Code Government Commission”,
published on November 26, 2002 by the Federal Ministry of
Justice in the official section of the electronic Federal Gazette,
are being met. The following suggestions are the only ones
not being applied:
1. Clause 2.3.3 (Proxy voting at the Annual Meeting) 1
Clause 2.3.3 of the Code requires the Board of Management to
appoint a representative to ensure that the shareholders’
voting right is exercised in accordance with the shareholders’
instructions; this representative should also be contactable
during the Annual Meeting.
154 |Corporate Governance