WWW.ICGG.BIZ issue 01/2008 INSIGHT corporate governance germany Essential: Information, Analysis and Opinion for Investment Professionals, Advisers and Academics CONTENTS 02 COMPANIES 15 CAMPUS Telekom dividend cuts into the flesh Profit participation already the norm 03 BUHLMANN´S CORNER 16 CAPITAL NEWS Holdings: Buying & Selling in December 05 CORINNA RIEWE Corporate Governance in Poland 17 DIRECTORS´DEALINGS 08 ACTIONS CORNER 19 INSIGHT SHAREHOLDER ID 10 POLITICS Shareholding structures in DAX, MDAX and Media storm about managers’ pay TECDAX 12 FRANK SCHÄFFLER 38 READING SUGGESTIONS Risk Limitation turns into Investment Limitation 13 PEOPLE 39 INDEXES OF COMPANIES Francioni renewed AND PERSONS 01 INSIGHT corporate Governance Germany companies Telekom dividend cuts into the flesh Deutsche Telekom wants to raise the dividend for 2007 from €0.72 to 0.78, or altogether 3.1 to 3.4 billion euros. This amount of distribution could, say analysts, exceed the annual surplus. Jürgen Kurz, spokesman for shareholder association Deutsche Schutzvereinigung für Wertpapierbesitz (DSW), sees a threat of loss of substance here: “The firm also has to earn the dividend.” The dividend increase will primarily benefit major shareholders like the government, Kreditanstalt für Wiederaufbau (KfW) and financial investor Blackstone, continued the DSW’s criticism. Conergy follows the sun Siemens boss goes to SEC In mid December, Hamburg solar specialist Conergy had to issue its se- Siemens boss Peter Löscher travelled cond profit warning within a few weeks. Losses before interest and taxes with compliance officer Peter Solms- in the current year would amount to some 150 to 200 million euros, ad- sen and Supervisory Board chair mitted CEO Dieter Ammer. Now he is pulling the ripcord and getting out Gerhard Cromme before Christmas of such activities as biomass and solar-thermal. To make the operational business more transparent, he is additionally bringing the three divisions to the US, where they had talks of Components, Sales & Systems and Projects under a new holding struc- with SEC representatives about the ture. In November a capital increase and concomitant new line of credit consequences of the corruption from the banks had cushioned the group’s financial situation. affair. Löscher has since taking office grouped the company structure into the three divisions of Health, Energy and Industry, tightened up the board, changed several managers and estab- Swiss Life comes into AWD lished new compliance rules. Despite these measures, Siemens fears a fine Swiss life-assurer Swiss Life wants to buy into German financial consul- in the billions from the US authorities tant AWD for €1.16 billion. The Swiss bid, announced for January 2008, and wants to continue talks with the amounts to €30 per share and contains a premium of 36 percent over the SEC in the new year: “It was a good weighted average quotation for the last three months. Against this back- talk and a basis for further direct dia- ground, AWD’s CEO Carsten Maschmeyer announced he would lower his holding from 30 percent, initially to ten. The AWD boss denied, however, logue,” said a Siemens spokesman. that he would withdraw completely, giving assurances he would stay on as CEO for another five years. ISSUE 01/2008 02 INSIGHT corporate Governance Germany companies BUHLMANN´S CORNER The envy debate in the festive goodwill season 2007 is over, and our managers are still with us for not to say inevitable, that they should save the si- 2008 – in a good mood, let’s hope. Yet there was tuation with regard to executive salaries. Standing after all one thing this CORNER of ours had, with in for Supervisory Board members to take on this all due respect, to take up: our President Koehler tough job is something they may very well feel scribbled it into all of our letters to Santa at the called on to do. After all, they’ve shown you can start of the Christmas season. govern a people in peace for five decades without any fuss about the salaries of Chancellors, male or German managers (what, female. only German ones?) ought to show a bit of humility The voices crying in the wilderness of Corporate – not least because of the Governance have after all been refuted: if AGM people’s will and our Federal attendance were bigger and if there were more President’s good advice. Ob- to-the-point debate there in the interests of inves- viously he wouldn’t be Presi- tors, then it might still be possible to listen to those dent if he didn’t know how hecklers. But the actual fact that nary a sharehol- to be right – giving him all der really bothers about their own interests or their the more right to say things representation shows that most of them rely on like that. Our Chancellor, al- “others” to do so and that someone or other will ready down in history as the pay. first woman to hold the office, was quick to second him – the presidential call definitely ought to be Such an experienced government might, then, at taken seriously. Admittedly, she was talking only to long last stand up for improvement. No dramatic her Party Congress, but very much in the style of change is necessary, indeed. Experienced observers her pre-predecessor Helmut Kohl, who she was re- will certainly very soon be pointing out that agents ally addressing was the whole of Germany, all the and operators would really be the optimum for way from right to left. the blind shareholders and would, behind Chinese walls of silence, then solve this Germanic problem Advent is, after all, a happy time. In the first place, with the managers too. because there are fewer AGMs (even IKB has mo- ved its first still-legal date out of this period and Ultimately, the managers would then (indirectly) into the end of its business year), which cuts down themselves be paying those who define their remu- the stress a good deal. Second, because there’s al- neration. And the bothersome shareholders would ways some fun situation or other turning up. For be less of a nuisance. Would anyone be unhappy, instance, it was amusing to see which (codetermi- then? SGL had the idea, President Koehler spoke ning) trade unionists and Works Council members, out, Merkel acted and Riskmetrics guarantees this instead of stabbing their poor persecuted mana- too. And the silent majority of shareholders went gers in the back, backed them and their income on saying nothing. positions up. But let’s not just wallow in the mire of the eternal “opposition” in the company world, but get down to some solutions! Hans-Martin Buhlmann is the founder of proxy- Given the historically established (?) intelligence of voting agency VIP Vereinigung Institutionelle the Berlin government, it’s really almost obvious, Privatanleger e.V. (www.vip-cg.com). ISSUE 01/2008 03 INSIGHT corporate Governance Germany companies Continental swallows VDO Drägerwerk changes its legal form Tyremaker Continental is to be allowed to take over Siemens automoti- ve supplier division VDO without further requirements being imposed. The change in form of Drägerwerk AG This was decided by the European Commission in early December 2007. decided in May 2007 was entered in the Conti boss Manfred Wennemer welcomed the decision: “We believe we commercial register on 14 December 2007. can have integration largely completed within the next twelve months.” The company name now becomes Dräger- By 2010 synergies to the tune of at least 170 million should be achieved. werk AG & Co. KGaA. The group hopes the Conti will pay €11.4 billion to Munich for VDO. Employee representati- change will help it gain more financial and ves see 7,000 of the 50,000 VDO jobs as in danger. operational room for manoeuvre. 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The services described in this advertisement are provided by Deutsche Bank AG or by its subsidiaries and/or affi liates in accordance with appropriate local legislation and regulation. © Copyright Deutsche Bank 2007. 170x150_NewMark_InsightCG_Glob.indd 1 29.11.2007 10:43:54 Uhr ISSUE 01/2008 04 INSIGHT corporate Governance Germany companies ANALYSIS Corporate Governance in Poland n the Transparency Directive (2004/109/EC) ad- lated market. And in Poland disclosure must always opted in 2004, the EU set itself the objective of be made in Polish. There is no provision allowing is- Iadvancing both the transparency and informati- suers with headquarters abroad to make disclosures on levels of listed companies and the unification of in English only. European capital-market law, while simplifying the latter by introducing the “country-of-origin princip- As in Germany, before disclosure of insider informa- le.” Its conversion into na- tion, in Poland too both the stock-exchange regula- tional law, intended to be tor and the exchange must be informed in advance. completed by 21 January Here, a compulsory twenty-minute lead time is man- 2007, has however come datorily required by an implementing order of the about fully in only ten of relevant ministry. Parallel-listed issuers must accor- the 27 EU Member States. dingly provide both for reliable, always-available Po- In eight of them it has been lish translators and for careful coordination between partly transposed, but in the investor-relations employees working in Germa- nine not at all.