The new salary caps for CEOs leave room for excess. Which supervisory boards are keeping a sense of proportion, why mega-salaries are a high business risk.
In future, supervisory boards will have to define upper limits for the salaries of their board members. Some have already done so, others are content for the time being to state the best achievable sum in the annual report. But it is already clear: The range among the Dax companies will be wide.
At the lower end of the scale, according to a Handelsblatt analysis, is the Deutsche Wohnen supervisory board around Matthias Hünlein, which wants to pay the CEO (currently: Michael Zahn) a maximum of 3.8 million euros. SAP boss Christian Klein, on the other hand, can hope for up to 34.5 million euros. According to the analysis, nine other group bosses also stand to receive double-digit salaries.
This means that in many places there will still be room for salary excesses in the future, which will weaken confidence in the social market economy. In addition, there are sound business reasons against lavish total compensation:
Weakened team spirit. Flat hierarchies, diverse teams and personal initiative are supposed to make companies faster and more innovative. If supervisory boards nevertheless pay as if everything depended on the boss, they counteract the supposed paradigm shift – and promote egoism instead of team spirit. We are convinced: high pay gaps in boards, teams and companies are anachronistic and endanger the digital transformation.
Short-term thinking. The Corona crisis has once again shown that board members hardly bear any entrepreneurial risks: Some supervisory boards have compensated for impending salary losses with special compensation. And later legal claims are usually covered by D&O insurance (as was the case with ex-VW boss Winterkorn). The problem is that anyone who can count on being well provided for after just a few years is thinking in the short term – not in an entrepreneurial way.
Extrinsic motivation. A typical argument of supervisory board members is: If you want to have the best, you have to offer top salaries. If you’ll pardon the expression, that’s too simple. Because those who pay the most do not automatically attract the best, but possibly precisely the wrong ones – namely those who are driven by money and not intrinsically motivated. They then pant after the “bonus” carrot instead of keeping an eye on the big picture.