10 The German Times – Business April 2019

BIG MONEY Highest-earning CEOs of 2018 in New lease on life he notion that a CEO’s salary may Tgrossly outweigh the average work- er’s pay has long been under scrutiny on A initiative is calling for the expropriation of private housing companies. both sides of the Atlantic. Most notable A crazy idea or a necessary step? in the United States is the case of Weight Watchers International, which has the highest CEO to average worker pay ratio, according to a report by USA Today. take warm showers for over a They are calling on Berlin’s These rights cover a wide spec- city’s budget is certainly not Weight Watchers CEO Mindy Grossman BY TONG-JIN SMITH month, you decide not to pay municipal government to pass trum of homes for low-income a sustainable solution. Then earns 5,908 times more than the compa- the full rent – in accordance a law in accordance with Article to middle-class families that again, neither is expropriation. ny’s average employee, leaving her with magine you live in Berlin, with German law. In return, 15 of the Basic Law, Germany’s are currently being pushed out After all, re-municipalizing Ber- an annual compensation of $33.4 million. one of Europe’s most your landlord sends you a warn- constitution, that would allow of the market. Instead of being lin’s water supply in 2013 did What’s more, she only ranks 21st among Ivibrant cities. You really ing. Then the elevator stops for the expropriation of private stumped by rapidly rising rents not reduce costs for consum- America’s highest-earning CEOs of 2018. love your apartment and your working and doesn’t get fixed housing companies that own and property prices, the city ers. It seems that urban devel- Among Germany’s highest-earning neighborhood. It’s affordable, for six months. more than 3,000 apartments could make use of these rights opment requires new players CEOs, Stefan Heidenreich of the people are nice, parks and You feel sorry for your new in the city. In return, the com- – as it once did. “Back in the that are not driven by capi- is ranked first with a converted annual grocery stores are just around neighbor who had to carry panies would be compensated 1990s, the city created several tal gains, but rather by social income of $26.54 million, according to a the corner. In a matter of min- everything up the stairs and at below-market prices, and development areas: Spandauer responsibility. “Trusts and study by the consulting firm HKP. Although utes, public transportation gets who pays a lot more rent than the newly municipalized apart- Wasserstadt, Eldenaer Straße, other organizations dedicated it’s a lot of money, Heidenreich’s salary is you to the center of town, with you do for pretty much the ments would be managed by Rummelsburger Bucht. But to public welfare are impor- still less than America’s 25th-highest paid all its cultural and commercial same apartment. And when a public board on which the after 1996, these were aborted tant catalysts for collaborative, CEO, Josh Sapan, who makes $29.6 mil- offerings. Commuting to work you finally read in the news- majority of decision-makers before being finished – with the affordable and inclusive living,” lion for heading AMC Networks. Hock E. is a snap. Why would you ever paper that Deutsche Wohnen would be tenants and citizens. exception of Adlershof – with- says Markus Eltges, director Tan of Broadcom is ranked first in the US move? increased its annual profits by Critics warn that such a solu- out ever evaluating the experi- of the Federal Institute for with an annual income of $103.2 million, Enter your new landlord, a whopping 11 percent due to tion would focus only on pro- ence and mistakes,” von Einem Research on Building, Urban almost four times that of Heidenreich. Deutsche Wohnen, a commer- an increase in rental income, tecting existing rental units noted recently in Der Tagesspie- Affairs and Spatial Develop- Shareholder representatives take a cial property company that you go from being worried to and not on investing in much- gel. “Since then, the city govern- ment (BBSR). “They follow a critical view of high salaries. “Any salary owns 167,000 units across Ger- annoyed to downright angry needed new housing projects. ment has lost its courage – and concept with social and cul- greater than €10 million is extremely dif- many – 164,300 residential and – a feeling many tenants of In addition to speculation and its memory. Today, these special tural goals. Rate of return is not ficult to square from a social perspective. 2,700 commercial. Your apart- Deutsche Wohnen units share. a massive population influx, a rights have largely been forgot- central. The many models and This should be avoided,” warns Marc Tün- ment is one of roughly 116,000 And they are not alone. major cause for Berlin’s rents ten, although they are still appli- initiatives that strengthen civil gler, managing director of the Deutsche units Deutsche Wohnen has Several tenant initiatives have doubling over the past decade cable.” society enrich what is happen- Schutzvereinigung für Wertpapierbesitz, acquired in and around Berlin, If applied, the city could ing on the housing market and a German shareholders association. A making it the largest provider legally bind project develop- co-create neighborhoods.” salary exceeding this benchmark should of rental apartments in the area. ARTICLE 15 [SOCIALIZATION] OF GERMANY’S BASIC LAW ers, private investors, housing But if they want the city to require more than a few justifications. At first, you don’t think much Land, natural resources, and means of production may for the societies and co-operatives to a implement measures to once “The supervisory board must ensure that about your new landlord. After purpose of socialization be transferred to public ownership number of terms, which would more make housing abun- the salaries of the management board all, the building you live in has or other forms of public enterprise by a law that determines ensure good quality architec- dant and affordable, it would are appropriate; it’s a big issue.” Tüngler changed hands before. But then the nature and extent of compensation. ture, proper facilities as well as behoove Berliners to join the also called for a radical simplification of you start to notice things: when affordable rents and real estate protests and sign the petition the system. GT you receive your annual service prices. “In particular, all of this to have exploitative landlords bill, it’s far less transparent than formed across the city to force has been a backlog in construc- can be done in a more detailed expropriated. Let’s hope things the ones you got from your old large private housing companies tion, especially of rental and way and with more legal cer- improve once BlackRock, MFS landlord. And everything is a to better maintain their prop- public housing units. And both tainty than via terms that are and other institutional inves- 1 lot more expensive. You start to erties and to charge affordable developers and city officials written into master plans or tors that hold large shares of STEFAN F. HEIDENREICH wonder if you can still afford to rent. But one initiative has share the blame. But is expro- building permits,” writes von Deutsche Wohnen can no Company Beiersdorf live there in the future. gone a step further: Deutsche priation of commercial housing Einem. Meanwhile, as municipal longer push for rent increases Annual compensation €23.45 million And when the old heater in Wohnen & Co. Enteignen companies the answer? administrators have yet to take and higher returns on their Company revenue €7.23 billion your apartment breaks down (Expropriate Deutsche Wohnen Not according to urban econ- action, anger prevails among investment. just before Christmas, it takes & Co.) is demanding the (re-) omist Eberhard von Einem, Berliners, who are asking: “Who days before someone responds municipalization of rental units who points to a variety of spe- owns the city?” Tong-Jin Smith is a freelance and weeks before it’s replaced. owned by large housing compa- cial rights the city holds that are Haphazardly buying back journalist and lecturer at the Since you end up freezing in nies such as Deutsche Wohnen, designed to prevent speculation apartments once privatized in Free University of Berlin and the Dekra School of Media. 2 your apartment and cannot and LEG Immobilien. and provide affordable housing. an attempt to consolidate the OLIVER BÄTE IMAGO/CHRISTIAN MANG Company Annual compensation €10.33 million Company revenue €130.5 billion 3 BILL MCDERMOTT Company SAP Annual compensation €9.97 million Company revenue €24.7 billion 4 STEFAN F. HEIDENREICH Company Annual compensation €9.6 million Company revenue €83 billion 5 BERND SCHEIFELE Company HeidelbergCement Annual compensation €9.43 million Company revenue €18.1 billion 6 DIETER ZETSCHE Our house, in the middle of our street: Tens of thousands of Berliners have signed a petition to expropriate the biggest commercial property companies. Company Daimler Annual compensation €8.26 million Company revenue €167.4 billion ermany’s Federal In the case of these large- Administrative Court Keepers scale events, the police are Gin Leipzig recently usually obliged to have a pres- issued a significant and surpris- Who should pay for security at pro soccer games? ence in front of the stadium, 7 ing ruling: The state should be inside the stadium, in the city FRANK APPEL permitted to bill professional and at the main train station. Company soccer clubs and the German Police officers perform such Annual compensation €8.19 million Soccer League (DFL) for the the Bremen police deployed Bremen was the first federal ditionally responsible for tasks as picking up drunken Company revenue €61.55 billion costs associated with police 969 officers, who together tal- state to enact a correspond- security in public spaces or fans and defusing violence. operations at high-risk games, lied 9,537 working hours at a ing state law, which has now whether it can share the costs Usually between 200 and 250 (i.e. large commercial events total cost of €425,718. survived a court challenge. If with commercial enterprises. officers are assigned for a regu- with more than 5,000 visitors). That same year, the Baden- more cities follow with similar The matter has been defini- lar league game not deemed to The original dispute began Württemberg Court of Audit legislation, the Bremen ruling tively settled with regard to be high-risk. 8 with a €425,000 invoice the city estimated the annual aggre- could end up having profound keeping the peace in the sta- According to a survey con- KASPER RORSTED of Bremen sent to the DFL four gate cost of police operations effects on the way the big dium during the event, but ducted by Infratest Dimap in Company years ago to cover the costs of for soccer games in Germany’s business of live soccer is con- who is responsible for secu- March 2019, 90 percent of the Annual compensation €8.16 million policing at a Bundesliga match Bundesliga, its second division ducted in Germany. rity before and after the match, German population is in favor Company revenue €21.9 billion between Bremen and Hamburg. and its three lower leagues, at The larger question is that is, when most of the riots of passing the additional costs For the game on April 19, 2015, €119 million. whether the state is uncon- actually take place? on to the clubs. GT