Michael Diekmann of Allianz follows in second and third place with 759,000 euros and Hans Dieter Pötsch of Volkswagen with 676,000 euros.The best-paid women on the DAX supervisory board were Michele Trogni and Dagmar Valcárel of Deutsche Bank and Birgit Steinborn of Siemens, each on 450,000 euros. The three women share 20th place in the overall salary rankings.
This is the result of the remuneration study published on Monday by the German Securities Protection Association (DSW), for which all listed companies in the Dax-40, M-Dax and S-Dax were examined.
Last year, the chairmen of the DAX supervisory board earned on average around 421,000 euros for their mandate.This is 7.5% more than the previous year.Deputies earn on average 276,000 euros,while ordinary members of the supervisory board of DAX companies earn 127,000 euros,almost a third of the chairmen. In recent years the position of the audit committee chair has become much more vital within committees. This position was paid on average 245,000 euros.
It is now common practice that supervisory board members – unlike board members – receive purely fixed remuneration. For the first time since the systematic inquiry began in 2006, no DAX company paid variable remuneration to supervisory board members. deutsche Bank and Porsche are the latest two companies to move to purely fixed remuneration, as recommended by the Corporate Governance Code.
If you add up the salaries of the supervisory board members of individual companies, Volkswagen is at the top of the table. The Wolfsburg-based car manufacturer granted its 20 supervisory boards a total of around 7.5 million euros,which is 42 percent more than in 2022. According to a VW spokesperson, this was the first increase in six years. followed by Deutsche Bank with approximately 7.4 million euros (+8.4%) and Mercedes-Benz with approximately 5.9 million euros (minus 9.1%).
Interview: Understanding DAX Supervisory Board Compensation Trends
interviewer: Welcome, Dr. Anna Schmidt, a leading expert in corporate governance and executive compensation.Thank you for joining us today to discuss the recent remuneration study by the German Securities Protection Association (DSW) regarding the DAX supervisory board roles.
Dr. Schmidt: Thank you for having me. It’s a critical topic that highlights the evolving landscape of executive compensation in Germany.
Interviewer: The study revealed that the average earnings for DAX supervisory board chairmen increased by 7.5% to approximately 421,000 euros. What does this growth say about the current corporate governance environment?
Dr. Schmidt: This increase reflects a broader industry trend underscoring the importance of strong governance structures, especially in the wake of recent global financial crises. companies recognize that having effectively compensated supervisory board chairs can enhance oversight and foster accountability.
Interviewer: Speaking of oversight, the study noted that for the first time, no DAX company paid variable remuneration to supervisory board members, opting instead for purely fixed salaries. What are the implications of this shift?
Dr. Schmidt: This shift is significant. Moving to purely fixed remuneration is a direct response to criticisms regarding excessive executive bonuses possibly impacting decision-making. It aligns with the Corporate Governance Code recommendations, aiming to ensure that board members focus on long-term sustainability rather than short-term gains. This could potentially lead to better governance practices and reduced risks for shareholders.
Interviewer: In terms of gender portrayal, the highest-paid women on the DAX boards, including Michele Trogni and Dagmar Valcárel of Deutsche Bank, earned 450,000 euros. How does this compare to the overall structure of pay among board members?
Dr. Schmidt: While it’s encouraging to see women reaching these significant remuneration levels, they still occupy the lower ranks relative to their male counterparts. With women occupying 20th place in the salary rankings, it highlights the ongoing gender pay gap in corporate leadership.This should prompt discussions on further initiatives to ensure equitable compensation practices across the board.
Interviewer: Volkswagen topped the list for total supervisory board compensation, with an allocated budget of around 7.5 million euros. What does this mean financially for the company and its shareholders?
Dr.Schmidt: This ample investment in supervisory board compensation could be seen as a commitment to robust governance. However,its implications depend on the company’s performance and governance outcomes. Shareholders may appreciate the investment if it leads to improved oversight and strategic direction, but they may also question the rationale behind such increases, especially considering the company’s recent challenges.Transparency in how these decisions are made will be vital.
Interviewer: Given the trends discussed, what practical advice would you offer companies trying to navigate the complexities of supervisory board compensation?
Dr. Schmidt: Companies should ensure that their compensation structures are transparent and align with long-term goals. Engaging in stakeholder consultations about remuneration packages can help build trust. Additionally, it’s crucial to maintain a balance between attracting qualified board members and ensuring that remuneration does not become disproportionate compared to the broader employee base.
Interviewer: Thank you, Dr. Schmidt, for your insights into the evolving landscape of DAX supervisory board compensation. Your expertise sheds light on significant trends that can affect both governance and corporate performance.
Dr. Schmidt: Thank you for the chance to discuss these important topics. I hope this encourages companies to adopt more equitable and transparent practices.
Conclusion: The remuneration study by the DSW highlights significant trends in executive compensation in Germany, reflecting changes in governance practices and gender representation in corporate leadership. As companies navigate these complexities, a focus on transparency and alignment with long-term goals will be crucial for fostering trust and accountability.