On June 18, 2009, the Bundestag passed a law that places limits on the salaries paid to senior executives and makes them more accountable for their actions. The law is expected to encourage companies to focus on long-term strategies and performance instead of short-term gain, and also aims to increase the transparency of executive compensation.
Key details
The main details of the new law are as follows:
* Supervisory boards will be given more power to reduce executive salaries and to establish penalties if top executives are found guilty of negligence. Supervisory board members will also be subject to penalties if it is found that they have approved excessive salaries for management.
* In some exceptional cases, the supervisory board will be entitled to cap the variable pay of board members.
See full Article.
Posts
