German steel producer Mannesmann's management
remuneration heats up
For many decades, the general public showed no interest in
the level of management remuneration in German stock
corporations. This has changed. In the light of the Mannesmann
trial, which resumed in October 2006, management remuneration
has become a hot topic of legal debate. The German legislator,
national courts and even the public prosecutor have recently
felt called upon to comment on some of the legal issues
In Germany, the Stock Corporation Act (Aktiengesetz, or
AktG) prescribes a dual board system for stock corporations.
The management board (Vorstand) is responsible for the
operation of the company's business. The supervisory board
(Aufsichtsrat) supervises and advises the management
board. It is also explicitly assigned to appoint the members of
the management board and negotiate their remuneration and other
aspects of their service contracts.
Provisions in German law regarding the...