Annual Report 2007 - Muehlhan AG

10
Compensation structure of the
Executive Board and Supervisory Board
the Executive board can be measured with regard to
compensation as well using the shared objectives. all
three members receive fixed and annually recurrent variable
compensation components. Non-recurring variable
compensation components are not scheduled. in addition,
along with the bonus plan described, the Supervisory
board can also issue virtual stock options in the context of
a phantom share program as an additional incentive for the
Executive board. Corresponding options were allocated by
the Supervisory board both to the Executive board and to
executive management personnel for the entire Muehlhan
Group most recently in the 2006 fiscal year. in doing so,
the beneficiary is granted a claim against the company for
a cash payment, the existence of which is dependent upon
reaching particular performance targets, and which is to
place the beneficiary in a financial position as if he or she
had acquired a share of the company at the issue price
and resold the share at the market price as of the date of
exercise.
the options on these so-called phantom shares can be
exercised only if the share of the company has experienced
an increase in value of at least 10% per year from the date
of allocation. for each share tranche allotted to him or her,
the beneficiary is bound to a staggered waiting period
which is two years for a third of the allocated options, three
years for another third, and four years for the final third.
Corresponding to the usual provisions, the members of
the Supervisory board receive a combination of fixed
super visory board compensation and a variable portion.
declaration oF conForMity
our management and the Supervisory board of Muehlhan
aG deal regularly with matters of good company management.
therefore, it is only logical for the company to orient
itself to the recommendations of the “administrative
Committee for the German Corporate Governance Code”,
referred to as dCGK below, to the extent that doing so is
reasonable given the size and structure of the company.
Muehlhan has already complied with the Code and its
material recommendations in the past. the company is
also currently in compliance with the requirements of the
current version of the Code dated 14 June 2007.
to the extent that individual recommendations from the
current version of the dCGK were not followed, or were
followed only to a limited extent, or if the company deviated
from them in another manner, or will deviate from them in
the future, the Executive board and Supervisory board
provide justification as follows:
With regard to Section 2 of the Code:
Invitation to the Annual General Meeting;
transmission by electronic means
in paragraph 2.3.2, the dCGK recommends transmission
of the invitation documents for the annual General Meeting
by electronic means, provided that the consent requirement
necessary for doing so was met.
When convening the annual General Meeting, Muehlhan
limits itself to the manner prescribed by statute for economic
and organizational reasons. the reports and documents
required by law for the annual General Meeting are normally
made available for inspection by the shareholders from
the date the annual General Meeting is announced, and
sent to a shareholder upon request, but not electronically,
because the consent requirement pursuant to § 30b paragraph
3 of the Securities trading act is not met. in addition,
the documents will be published on the company’s website
together with the agenda, provided that doing so is not
contrary to legitimate interests of the company, its shareholders
or third parties. all documents can be accessed
by the shareholders there.