The supervisory boards of listed companies will in future be required to set upper limits for the salaries of their managers. This provision is part of a comprehensive legislative package with which the Bundestag has implemented the European Directive on shareholder rights. The Supervisory Board therefore only has the choice whether there is an upper limit for the entire Executive Board or whether the remuneration of each individual Executive Board member is capped.
So far, the Supervisory Board has been able to limit executive salaries on a voluntary basis. After the new regulation, which was inserted by the black-red coalition only at the last moment in the legislative package, he is obliged in the future to do so. At the same time, the shareholders' meeting is granted the right to reduce this upper limit once more.
The deputy SPD faction leader Eva Högl said that inappropriately high executive salaries endangered the people's trust in the social market economy. If Dax board members on average earned 52 times their employees, that would be incomprehensible.
Opposition criticizes the new regulation
The opposition rejected the law of the grand coalition closed. The AFD was in favor of having the Annual General Meeting decide on the remuneration of the Management Board instead of the Supervisory Board. Left and Greens campaigned for a legal restriction on executive salaries. The FDP, however, rejected the criticism of the remuneration and lamented a general distrust of the economy.
In addition to the remuneration of the Management Board, the Shareholder Rights Directive also aims to improve investors' information and their voice. In addition, transparency requirements for institutional investors, asset managers and voting advisors are enshrined in the German Stock Corporation Act.
