Jürgen Heraeus is annoyed about high manager salaries in listed companies. The salaries are “often unacceptable”, the family entrepreneur recently told “ZEIT”. We look alike. From our point of view, especially large distances to the salaries of other executives are an anachronism – especially since modern bosses tirelessly preach team spirit. But will the salaries fall as hoped by the new shareholder rights law ARUG II, which the Bundestag is currently discussing? The rules will probably prescribe annual votes on the remuneration system, but these “say-on-pay” votes will remain non-binding. A paper tiger, huh?
Excessive salaries, excessive dividends?
This year’s HV season has shown that resistance to lavish manager salaries continues to grow. Investors from Lufthansa, ProSiebenSat1 and Zalando, for example, harshly criticized the company, putting Karl-Ludwig Kley, Werner Brandt and Cristina Stenbeck under pressure. Brandt even came under personal scrutiny: “Somehow I have the feeling that you were too loose with your payments,” said a shareholder representative.
The development indicates that the pressure on too generous controllers by ARUG II is increasing. At the same time, however, we see the danger of informal deals to the detriment of companies. After all, supervisory board members know that as long as the dividend is right, many shareholders keep still. Lush manager salaries could therefore trigger excessive dividends. We hope that supervisory board members will resist this temptation and orient themselves solely to the well-being of the company. That should mean a lot: CEO salaries and dividends – and in this way create scope for future investments and at the same time promote team spirit. This would, moreover, underpin inspectors that there is much to be said for indirect shareholder democracy. And little for even more investor power.