Porsche 2004 Annual Report Download - page 25

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There have been and still are many and varied relationships with hold-
ers of common stock that are members of the Porsche and Piëch
families. Members of both families sit on the Supervisory Board of
Porsche AG and undertake supervisory functions as co-proprietors.
No conflict of interests is identifiable as a result of this.
“Shareholders and third parties are primarily supplied with
information by the Consolidated Financial Statements. They are to
be informed during the fiscal year by means of interim reports.”
The company issues interim reports. However, Porsche rejects
quarterly reporting for reasons of principle that have already been
explained in detail.
“Payments to members of the Executive Board are to be
shown in the Notes to the Consolidated Financial Statements, sub-
divided according to fixed, performance-related and long-term
incentive components. The figures are to be individualized.”
We show the salaries of members of the Executive Board subdivided
according to fixed and performance-related components. Porsche
AG does not operate a share option scheme. It has not complied
with the regulation in the code requiring payments to board members
to be shown individually, and will not do so in future provided that
this regulation remains non-mandatory. In our opinion the associated
disadvantages – particularly the inevitable leveling up of board mem-
bers’ salaries and the invasion of the individuals’ right to privacy –
outweigh the advantages to investors of such a practice. The latter
are, in any case, unaware of the criteria and scales on which differ-
ences between board members’ salaries are based. It should be
noted that the new law calling for the publication of the salaries of
members of the Executive Board, which comes into force in 2006,
permits the stockholders’ general meeting to decide, by a three-
quarters majority of the capital with voting rights that is represented
at the meeting, not to publish the salaries of individual members of
the Executive Board.
“Members of the Supervisory Board are to be elected
individually.”
In view of our specific stockholders’ structure, we regard this
recommendation as unreasonable in normal circumstances.
“Payments to the members of the Supervisory Board shall
also be shown in the Corporate Governance Report, individualized
and subdivided according to constituent elements.”
We show payments to the Supervisory Board in the Notes to the
Annual Report as a single sum. We have not so far stated the sums
paid to individuals, nor will we do so in future, because we see
no additional advantage for investors in this in view of the level of
payments involved and the requirements stated in the statutes.
“Payments made to members of the Supervisory Board or
benefits granted to them in respect of personal services rendered,
in particular advisory or negotiating services, are also to be shown
individually and separately in the Notes on the Consolidated
Financial Statement.”
The ability to access the expertise of individual members of the
families that are stockholders in the company on specific subjects
represents a particular advantage for Porsche AG. This cooperation
takes place on terms that are customary in this business sector and
which are also complied with in the event of comparable business
arrangements being undertaken with third parties. The recommen-
dation is inappropriate for the character of a family-owned business
and for this reason has not so far been complied with and will not
be complied with in the future.
Dr. Ing. h.c. F. Porsche Aktiengesellschaft
Supervisory Board and Executive Board