Porsche 2006 Annual Report Download - page 30

28 Corporate Governance Report
and supervisory board members shall be reported if
these directly or indirectly exceed 1 percent of the
shares issued by the company. If the entire holdings
of all members of the executive board and supervisory
board exceed one percent of the shares issued by
the company, these should be reported separately
for the executive board and supervisory board. This
information should be contained in the Corporate
Governance Report.” (No. 6.6 German Corporate
Governance Code).
All ordinary shares are owned by the Porsche and
Piëch families; the share ratios are published by
Porsche AG as required by the German Securities
Trading Act (WpHG).
Notifications of purchases and sales of Porsche
preference shares by members of the Executive or
Supervisory Boards are published in accordance
with §15a WpHG to the extent that this is provided
for by § 15a WpHG. Publication in any other form of
the shares or related financial instruments held by
members of these bodies has not taken place so
far and is not envisaged in the future.
“The consolidated financial statements should be
publicly accessible within 90 days of the end of
the fiscal year; interim reports should be publicly
accessible within 45 days of the end of the reporting
period.” (No. 7.1.2 German Corporate Governance
Code).
Porsche has established a publication cycle corre-
sponding to its non-standard fiscal year, which
guarantees the company optimum publicity. We do
not consider a deviation from this practice to be
appropriate.
“In order to permit independent advice to and super-
vision of the executive board by the supervisory board,
the supervisory board should have what it regards
as a sufficient number of independent members.
A member of the supervisory board is regarded as
independent if he/she has no business or personal
relationship with the company or its executive board
that could lead to a conflict of interests.”
(No. 5.4.2 German Corporate Governance Code).
This recommendation does not allow for the special
character of Porsche AG’s shareholder structure.
There have been and still are many and varied
relationships with holders of ordinary shares 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-owners. We see no conflict of
interests here.
“Shareholders and third parties are mainly supplied
with information by the consolidated financial state-
ments. They are to be informed during the fiscal year
by means of interim reports.” (German Corporate
Governance Code amended June 12, 2006).
The company always publishes the legally required
interim report and interim announcements. However,
Porsche rejects quarterly reporting on principle; the
reasons have been explained in detail in the past.
“The total compensation of each member of the
executive board is to be disclosed by name, divided
into non-performance-related, performance-related
and long-term incentive components, unless decided
otherwise by the General Meeting by three-quarters
majority.” (No. 4.2.4 German Corporate Gover-
nance Code).
“Disclosure should be made in a compensation report
which as part of the corporate governance report
describes the compensation system for executive
board members in a generally understandable way.
The presentation of the concrete form of a stock
option plan or comparable schemes for components
with a long-term incentive effect and risk character
shall include the value thereof. (…) In the case of
pension plans, the allocation to accrued pension
liabilities or pension funds is to be stated each year.
The main substance of severance awards for exe-
cutive board members shall be disclosed if in legal
terms the awards differ not insignificantly from the
awards granted to employees. The compensation
report shall also include information on the nature
of the fringe benefits provided by the company.”
(No. 4.2.5 German Corporate Governance Code).
We show the salaries of the members of the Exe-
cutive Board subdivided into fixed and performance-
related components. Porsche AG does not operate
a stock option scheme. We do not comply with the
recommendation of the Code to show the payments
to board members individually. In our opinion, the