Declaration of Compliance
Declaration of compliance with the German Corporate Governance Code in accordance with Section 161 of the AktG
The German Corporate Governance Code contains recommendations and proposals for managing and monitoring German listed companies in relation to shareholders and the Annual General Meeting (AGM), the Executive Board and the Supervisory Board, transparency, accounting and auditing. The German Stock Corporation Act requires the Executive Board and the Supervisory Board of listed companies to disclose each year the recommendations of the German Corporate Governance Code which the company has not followed or is not following, and to explain the reasons for non-compliance (i.e. there is a duty to comply or explain).
The Executive Board and the Supervisory Board identify with the duty as outlined in the German Corporate Governance Code to uphold the principles of a social market economy and maintain the substance of the company as a going concern and its ability to generate value in a sustainable fashion (company interest) and to further promote responsible and transparent management and governance of the company.
In accordance with Section 161 AktG, the Executive Board and the Supervisory Board of Wacker Neuson SE declare that the company complied with and continues to comply with the recommendations issued by the German Corporate Governance Code Commission published by the German Federal Ministry of Justice (BMJ) in the official section of the Federal Gazette as amended on May 26, 2010 or on May 15, 2012 (as of the effective dates respectively), with the exceptions listed and explained in more detail below:
- 1. Section 3.8, para. 2: The company’s directors’ and officers’ (D&O) liability insurance policy for its Supervisory Board has been concluded without a deductible. The company is of the opinion that a deductible would not improve the sense of motivation and responsibility with which the Supervisory Board members perform their duties. D&O insurance safeguards the company against substantial internal risks and – only as a secondary function – protects the assets of members of its executive bodies. Hence it is the company’s intention to refrain from introducing a deductible on Supervisory Board members until further notice.
- 2. Section 4.2.3, para. 6: The AGM is not informed separately about the main terms of and changes to the remuneration system for Executive Board members as this information is already disclosed in the Group Management Report, which is available to all shareholders.
- 3. Sections 4.2.4, 4.2.5, 5.4.6, para. 3 and 7.1.3: The AGM has decided not to publish the income of each individual Executive Board member in the notes to the Annual and Consolidated Financial Statements. In line with this, the corporate governance report does not include an individualized remuneration report. Nor does it contain specific information about share-based incentive systems for the Executive Board (which the company does not have in any case).
Similarly, the income of individual Supervisory Board members shall not be published. Remuneration is clearly regulated in the company’s Articles of Incorporation. The Executive Board and Supervisory Board are of the view that these Articles coupled with other mandatory legal disclosures provide investors and the public with sufficient information in this area.
- 4. Section 5.3.3: The Supervisory Board has not formed a nomination committee. The size of the Supervisory Board (four shareholder representatives) does not warrant a dedicated committee for proposing the shareholders’ Supervisory Board candidates.
- 5. Section 5.4.1: When submitting its election proposals to the Annual General Meeting regarding the election of the shareholder representatives, the Supervisory Board shall take into account the statutory requirements and recommendations of the German Corporate Governance Code in relation to the personal requirements to be met by Supervisory Board members.
Here the focus is placed – irrespective of nationality and gender – on the specialist and personal competence of potential candidates, paying special attention to the company-specific situation. Within the scope of evaluating competence, the Supervisory Board shall also factor in the company’s international involvement, potential conflicts of interest, the number of independent members of the Supervisory Board, the age limit stipulated for members of the Supervisory Board and the principle of diversity. In the Supervisory Board’s view, it is not necessary to specify concrete aims at this point in time, which means that the objective of the Supervisory Body and the implementation status are not published in the corporate governance report either.
The statutory retirement age for Supervisory Board members is 75. To ensure the greatest possible transparency in advance, the company draws attention to the fact that one of the Supervisory Board members, who is a shareholder representative, will turn 75 during his term of office.
- 6. Sections 5.4.2 and 5.3.2: The following situation is noted, which is also described in the Group Management Report: A pool agreement is in place between some of the shareholders of the Wacker and Neunteufel families. The parties to this pool agreement collectively hold about 63 percent of the shares of Wacker Neuson SE and can thus jointly (but not individually, i.e. individual members of the pool agreement acting in isolation) control the company. In accordance with the provisions of the pool agreement, each party to the pool agreement must exercise its right to vote and submit proposals at the Annual General Meeting such that two Supervisory Board members nominated as shareholders’ representatives by the Wacker family and two by the Neunteufel family are always elected.
The shareholders’ Supervisory Board members thus elected are, however, not bound in any way to the directions of individual, several or all of the parties to the pool agreement and any and all decisions they make within the Supervisory Board shall be made exclusively in the company’s interests. Even though the shareholders’ Supervisory Board members always enjoy the special trust of the parties to the pool agreement appointing them, they are not, in the Supervisory Board’s view, in any personal or business relationship with a controlling shareholder, which could lead to a fundamental conflict of interest. In the view of the Supervisory Board, the shareholder representatives in the Supervisory Board, including the chairman of the Audit Board, are therefore to be considered independent. The Supervisory Board is thus composed of a sufficient (in its opinion) number of independent members. Due to the existing legal uncertainties with respect to the limits of interpretation of the term "independence", extended in the German Corporate Governance Code as amended on May 15, 2012, a deviation is nonetheless declared as a precautionary measure.
- 7. Section 5.4.3., sent. 3: So that the Supervisory Board can continue to vote impartially for its chairperson, the proposed candidates will not be announced in advance.
- 8. Section 5.4.6, para. 2, sent. 2: The qualification of this provision of the German Corporate Governance Code as a recommendation was implemented with its revised version and the coming into effect of this revised version on June 15, 2012 and thus after the company’s last Annual General Meeting.
Along with a fixed remuneration, the Supervisory Board members shall be paid a variable remuneration which depends exclusively on the success of the relevant fiscal year.
The Executive Board and the Supervisory Board are of the view that the remuneration regulation, which was only adjusted at the last Annual General Meeting, is still appropriate and reflects the Supervisory Board’s tasks and functions and therefore are refraining from proposing another change at the Annual General Meeting.
- 9. Section 6.6, sent. 1: Share ownership by individual members of the executive bodies exceeding one percent of shares issued by the company has not been and will not be stated in the corporate governance report. The Executive Board is of the view that protecting personal and family privacy takes priority here.
Munich, February 13, 2013
Wacker Neuson SE
Executive and Supervisory Boards
This declaration of compliance will be revised annually. Wacker Construction Equipment AG will make outdated declarations available on its website for a period of at least five years.
Declaration of compliance 2013 - PDF 40 KB
Declaration of compliance 2012 - PDF 28 KB
Declaration of compliance 2011 - PDF 30 KB
Declaration of compliance 2010 - PDF 48 KB
Declaration of compliance 2009 - PDF 52 KB
Declaration of compliance 2008 - PDF 337 KB
Declaration of compliance 2007 - PDF 337 KB