Annual Report 2007 - Muehlhan AG

ManageMent divisions share Group ManaGeMent report Group Consolidated FinanCial stateMents
With regard to Section 3 of the Code:
Collaboration between the
Executive Board and Supervisory Board
under Section 3.8, the dCGK recommends that a reasonable
deductible be provided in liability insurance policies
that a company takes out for the members of its Executive
board and Supervisory board (so-called directors and
officers liability insurance policies – d&o).
in principle, Muehlhan aG is not of the opinion that the
motivation and responsibility with which the members of
the Executive board and Supervisory board perform their
tasks can be further improved by a deductible of this kind.
the current d&o insurance contracts currently taken out
by Muehlhan aG therefore do not provide for any deductible.
for the reasons stated, no change is planned.
With regard to Section 4 of the Code:
Executive Board
in Section 4.2.2 clause 1, the dCGK articulates the recommendation
that the Supervisory board plenum is to provide
advice with respect to the structure of the compensation
system for the Executive board and regularly review the
contracts at the recommendation of the executive committee
that deals with the Executive board contracts.
the Supervisory board of Muehlhan aG consists of three
members. the formation of executive committees is therefore
not necessary. at the company, it is the responsibility
of all board members to deal with the Executive board
contracts. all members of the Supervisory board will
provide advice regarding the compensation system for the
Executive board, and will review it regularly.
Notwithstanding Section 4.2.5 of the dCGK, Muehlhan
does not include a separate compensation report within
the Corporate Governance report. the total compensation
for the Executive board is included in the figures in
the annual financial statements. the company views
the Executive board as a management team, and an individual
disclosure of the amounts would not have any value
as additional relevant information for the reader. in the
company’s opinion, the compilation of a separate compensation
report is unnecessary.
With regard to Section 5 of the Code:
Supervisory Board and Executive Board
based on the composition of the Supervisory board already
mentioned, the formation of committees provided for
in Section 5.3.1 is deemed unnecessary. this also applies
to the formation of an audit committee as recommended
in Section 5.3.2, as well as the formation of a nomination
committee as provided for in Section 5.3.3.
all members of the Supervisory board have the necessary
knowledge and experience in the application of accounting
principles and internal audit processes, and perform the
tasks intended for the audit committee and the nomination
committee collaboratively. the chairman of the Supervisory
board issues the audit mandate pursuant to the
resolution by the Supervisory board, and sets forth the
areas of emphasis for the audit in coordination with the
other members after detailed discussion in a meeting in
advance, and finalizes the fee agreement with the auditor.
in accordance with the remarks above, Section 5.2 clause
2 also does not apply when dealing with the Executive
board contracts.
in addition, in Section 5.4.1 the dCGK recommends that
age limits be determined for members of the Supervisory
board. Muehlhan aG view such a determination as a limitation
on the right of the shareholders to select the members
of the Supervisory board in a self-determined manner and
on the basis of the knowledge, abilities and technical skills
required. Muehlhan aG’s articles of incorporation therefore
include no such age limit.
accordingly, and notwithstanding the corresponding
recommendation by the German Corporate Governance
Code in Section 5.1.2, Muehlhan sets no age limit for
members of the Executive board, because this would
place a blanket limitation on the Supervisory board
with respect to its selection of suitable members of the
Executive board.
Hamburg, 27 March 2008
for the Supervisory board
dr Wulf-dieter H. Greverath
for the Executive board
dr andreas C. Krüger
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