TheBoardof Directorsof GRENKELEASINGAGiscomprisedoffour membersandthesupervisoryboardiscomprisedof sixmembers.

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1 GRENKE Consolidated Group 11 Corporate Governance Report The GRENKE Consolidated Group is governed by a sense of responsibility. Therefore, an important part of our sense of identity is corporate governance that is effective and complies with the relevant laws and the requirements of the German Corporate Governance Code. The Board of Directors, the Supervisory Board, and executive employees, all identify with the principles of good corporate governance and compliance. They are committed to managing and monitoring the GRENKE Consolidated Group in a value-oriented and transparent manner. They are also aware of the special significance these principles hold with shareholder and capital providers on the capital market when making an assessment of the company. They also know that good corporate governance represents an important basis for maintaining and increasing confidence among present and future customers, employees and business partners. Transparent accounting and early reporting are essential to us for dealing with the public in a way that creates confidence. GRENKELEASING AG complies with the recommendations of the German Corporate Governance Code in the version dated June 18, 2009 and, since enforcement, in the amended version dated May 26, 2010 with few exceptions. The Board of Directors and the Supervisory Board have discussed their compliance with the Code in their meetings and have passed the declaration of compliance with the Code which has been duplicated at the end of this report. The declaration can also be found on the website of GRENKELEASING AG. Consolidated Group Management and Monitoring TheBoardof Directorsof GRENKELEASINGAGiscomprisedoffour membersandthesupervisoryboardiscomprisedof sixmembers. Supervisory Board During the fiscal year 2011, the Board of Directors provided the Supervisory Board with regular, detailed, and extensive information on the company s economic situation, the status of corporate planning, and current events. In this context, the status of refinancing and liquidity also remained a key focus. The Supervisory Board coordinated strategic development with the Board of Directors and discussed issues related to risk provisions, risk management, the internal control system and the internal audit system. Further responsibilities of the Supervisory Board include appointing and monitoring the members of the Board of Directors, reviewing and adopting the annual financial statements of GRENKELEASING AG, and reviewing and approving the consolidated financial statements of the company, while taking into consideration the auditors reports and the findings of the reviews by the Audit Committee (see Report by the Supervisory Board ). Another key activity is examining and approving company acquisitions. The Supervisory Board of GRENKELEASING AG has formed two committees in order to allow it to perform its duties efficiently. These committees have been given certain authorizations which are in line with the Supervisory Boards Rules of Procedure. The committees prepare the issues and resolutions which are relevant to them and which are then discussed by the Supervisory Board as a whole. The chairs of the committees report to the Supervisory Board, in its entirety, on the work accomplished in the committee meetings. Audit Committee The Audit Committee is comprised of three members who have specialized knowledge in the areas of accounting, corporate planning, risk management and compliance. The committee primarily deals with issues of external and internal accounting, the systems of corporate planning, and the company s risk management. It reviews and monitors the independence of the auditor in accordance with Article of the German Corporate Governance Code, determines the audit focus, and is responsible for and agrees on the fee with the auditor.

2 12 GRENKE Consolidated Group The Audit Committee also prepares the decision by the Supervisory Board on the adoption of the annual financial statements and the approval of the consolidated financial statements. As part of the Supervisory Board s activities under the German Corporate Governance Code, the Audit Committee also deals with compliance issues. The Board of Directors regularly reports to the Audit Committee on the compliance situation in the company, including compliance with the German Banking Act (KWG). Personnel Committee (Executive Committee) The Personnel Committee is comprised of three members. In particular, this committee prepares the Supervisory Board decisions on personnel and makes proposals for concluding, amending, and terminating employment agreements with the members of the Board of Directors. Board of Directors The Board of Directors autonomously manages the GRENKE Consolidated Group and is responsible for the company's strategic orientation and compliance with the principles of corporate policy. In addition, it prepares the quarterly financial statements, the annual financial statements of GRENKELEASING AG, and the consolidated financial statements. The Board of Directors reports to the Supervisory Board regularly and comprehensively by way of reports and proposals on issues such as strategy and implementation, planning, business performance, the financial and earnings situation, the strategic and operational business risks, their respective management, and activities involving the company in its entirety. The Rules of Procedure of the Board of Directors contain a list of transactions requiring approval. Key decisions by the Board of Directors such as acquisitions and financial measures require the approval of the Supervisory Board. The Board of Directors and the Supervisory Board are liable to pay damages to the company in the event of culpable neglect. Remuneration Structure and Remuneration of the Board of Directors and the Supervisory Board Remuneration of the Board of Directors EUR Christ Grenke Dr. Hack Kindermann Gross salary 182, , , , , , Performance bonus 87, , , , , , Bonus* 60, , , , , , Phantom stocks , Pensions , , , costs 329, , , , ,776, ,082, *For fiscal year 2011, the bonus is reported according to principle of causation. The amount of EUR 0.00 previously reported for fiscal year 2010, wasreclassified accordingly. The principles of the remuneration system for the Board of Directors provide for a fixed, performance-unrelated basic annual salary and a variable performance-related component. Some members of the Board of Directors also receive phantom stocks. The structure of the remuneration system, including phantom stocks, is aimed at promoting the company s long-term success and creating incentives to only enter into risks that are easily controllable statistically and that involve appropriate remuneration for the respective risk. No incentive is provided for entering into inappropriate risks. Furthermore, the regulatory capital of GRENKELEASING AG is neither jeopardised by its remuneration practice, nor does this restrict the long-term retention of its equity.

3 GRENKE Consolidated Group 13 In the year under review, the remuneration paid to the members of the Board of Directors totalled EUR 1,776k (previous year: EUR 2,083k), of which EUR 931k (previous year: EUR 942k) was attributable to gross salaries and EUR 488k (previous year: EUR 403k) to performance bonuses. An annual pension premium of EUR 21k (previous year: EUR 21k) was also paid to an external provident fund for Dr. Uwe Hack. The criteria for the variable remuneration components are defined in advance each year. They are based on the increase in EBIT (earnings before interest and taxes) and the development of the key performance indicators forming part of the GRENKE balanced scorecard (BSC). The attainment of the EBIT growth target is measured at the end of each year. Failure to achieve the targets means that no payment is made. The relevant BSC criteria correspond to the key performance indicators for the Consolidated Group s longterm success, and hence the long-term growth in enterprise value. Among other things, this includes the development in the number of leases and the volume of new business. The attainment of the BSC criteria is measured at the end of each quarter. By way of signature dated June 29, 2010 and July 13, 2010, the Supervisory Board of GRENKELEASING AG concluded phantom stock agreements with Board of Directors members Dr. Uwe Hack and Mr. Gilles Christ. Under these agreements, Dr. Uwe Hack and Mr. Gilles Christ receive entitlements to payment equal to the increase in value of 30,000 and 15,000 shares in GRENKELEASING AG respectively in relation to a defined basic share price for fiscal years 2010, 2011 and The share price is the arithmetic mean of the XETRA closing prices on all trading days from December 1 to December 23 of the respective prior year. The basic share price for 2010 was EUR The basic share price for 2011 was EUR The maximum payment arising from this agreement is limited to EUR 600,000 or EUR 300,000 for the period of three years. Under the programme, Dr. Uwe Hack and Mr. Gilles Christ are required to invest the respective net amount paid plus a personal contribution of 25 percent of that amount in GRENKELEASING AG shares. A pro rata calculation was applied for Mr. Gilles Christ in fiscal year 2010, his first year of membership of the Board of Directors. As of December 31, 2011, the value of the phantom stock agreements granted for 2011 totalled EUR 0. For 2010, a total of EUR 374k was paid out based on the phantom stock agreements for Dr. Uwe Hack and Mr. Gilles Christ. GRENKELEASING AG has also taken out a directors and officers liability insurance policy for members of the Board of Directors. This prescribes a fixed deductible of 10 percent per claim for each member of the Board of Directors; however, this is limited to a maximum of one and a half times the annual fixed remuneration for all claims per year. No further benefits have been agreed with any members of the Board of Directors in connection with the termination of their appointment. Moreover, none of the members of the Board of Directors received benefits or corresponding commitments from third parties relating to their position as a member of the Board of Directors in the past fiscal year.

4 14 GRENKE Consolidated Group Remuneration of the Supervisory Board Basic remuneration Audit Personnel Variable Travel Name Function 2011 Committee Committee remuneration expenses 2011* 2010* EUR Prof. Dr. Lipp Chairman 11, , , , Witt Deputy Chairman 7, , , , Münch Member 7, , , , Dr. Nass (until May 11, 2010) Member ,00 6, Schulte (from May 11, 2010) Member 7, , , , Staudt Member 7, , , , Dr. Sträter (until May 11, 2010) Member , Prof. Dr. Wörn (from May 11, 2010) Member 7, , , , , , , , , , , , * Fixed remuneration (basic remuneration, Audit and Personnel Committee), variable remuneration and travel expenses In fiscal year 2011, the members of the Supervisory Board received a total of EUR 108k (previous year: EUR 79k) including travel expenses in remuneration for their work. The remuneration for each individual member can be seen in the table above. The remuneration of the members of the Supervisory Board is regulated in the Articles of Incorporation of GRENKELEASING AG and determined by the Annual General Meeting. In accordance with the new version of the Articles of Incorporation based on the resolution by the Annual General Meeting on May 11, 2010, the members of the Supervisory Board receive fixed remuneration of EUR 7,500 for each full year on the Board, except for the Chairman who receives EUR 11,250, plus EUR 600 for each committee membership and EUR 900 for each committee chaired. If members are only on the Supervisory Board for part of a fiscal year, the basic remuneration and the remuneration for committee memberships and chairmanships are calculated on a pro rata basis. The members of the Supervisory Board also receive a variable component if a dividend in excess of EUR 0.20 per share is paid to shareholders. In this case, the fixed remuneration is increased by one-half of the percentage by which the dividend per share exceeds the amount of EUR 0.20; however, the variable component may not exceed 100 percent of the fixed remuneration. GRENKELEASING AG has also taken out a directors and officers liability insurance policy for members of the Supervisory Board. This prescribes a fixed deductible of 10 percent per claim claim for each member of the Supervisory Board; however, this is limited to a maximum of one and a half times the annual fixed remuneration for all claims per year. The company also reimburses the members of the Supervisory Board for their cash expenses and VAT insofar as they are entitled to invoice the tax separately and actually do so.

5 GRENKE Consolidated Group 15 Accounting, Audits of Financial Statements and Financial Reporting Consolidated Group accounting for the fiscal year from January 1 to December 31, 2011 was conducted in accordance with the rules and regulations of International Financial Reporting Standards as adopted in the European Union. In preparing the consolidated financial statements and the group management report, the company was also subject to and applied the provisions of German commercial law under Section 315a (1) HGB. The consolidated financial statements were audited in accordance with the rules and regulations of Section 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the IDW (IDW PS 200). The Audit Committee ensures the independence of the auditor and proposes an auditor to be elected by the Annual General Meeting. The auditor is elected by the Annual General Meeting in accordance with the statutory provisions. Transparency and Reporting to Shareholders GRENKE uses the Internet in order to promptly, equally, and thoroughly report to shareholders, capital market participants, and the media. All ad hoc disclosures and press releases, annual and quarterly reports and notifications in accordance with Section 15 of the German Securities Trading Act are published in German and English. The declarations of compliance with the German Corporate Governance Code are available on GRENKE s website ( Shareholders can use the internet to find information on the GRENKE Consolidated Group and its management and organisational structure. Notifications by the company are published in the electronic Federal Gazette (Bundesanzeiger). Shareholders can also watch the report by the Board of Directors and the general debate during the Annual General Meeting on the Internet. Proxies appointed by the company can be entrusted to exercise voting rights, even in absentia. The dates of regular financial reporting are shown in the financial calendar and on GRENKE s website. GRENKE shares are reported on in detail in the Investor Relations GRENKELEASING share section. Controlling and Risk Management The purpose of GRENKE Consolidated Group s risk management system is the systematic identification, assessment, documentation and disclosure of risks posed to the parent company and subsidiaries. It is designed to enable employees and management to address risks responsibly and make the most of the opportunities that present themselves. The GRENKELEASING AG risk management system is being continually expanded and is operated using a risk management tool on the intranet of the GRENKE Consolidated Group. Since the 2009 Annual Tax Act came into effect, leasing companies must also comply with the Minimum Requirements for Risk Management [Mindestanforderungen an das Risikomanagement (MaRisk)] published by Deutsche Bundesbank and the German Federal Office for Supervision of Financial Services. The appropriate risk management and controlling processes demanded by MaRisk for the key types of risks counterparty, market price, liquidity and operational risks have been implemented in the GRENKE Consolidated Group. The functionality of the risk management system and the results of its measures are reviewed by the internal audit department. The internal audit department reports directly to the Board of Directors. The details of the risk management system are given in the management report.

6 16 GRENKE Consolidated Group Declaration of compliance with the German Corporate Governance Code (DCGK) by the Board of Directors and Supervisory Board in accordance with Section 161 AktG The Board of Directors and Supervisory Board of GRENKELEASING AG issued the following declaration of compliance on May 3, 2011: The Board of Directors and Supervisory Board of GRENKELEASING AG declare in accordance with Section 161 of the German Stock Corporation Act that since issuing its last declaration of compliance on April 26, 2010, the recommendations of the Government Commission on the German Corporate Governance Code initially in the version dated June 18, 2009 and, since it became applicable, the amended version dated May 26, 2010 have been complied with and will also be complied with in future with the following exceptions: The currently applicable version of the company s articles of incorporation provides neither for the option of a postal vote for the shareholders nor for a corresponding authorisation of the Board of Directors. The company does not currently intend to provide for postal voting before and during the Annual General Meeting in addition to voting using proxies bound by instructions. Introducing the option of a postal vote entails legal risks and also additional administrative expense and does not provide any significant added value as compared to voting using proxies bound by instructions, as is practised by the company. For this reason, the recommendations in Articles and of the DCGK in relation to holding a postal vote are not followed. In deviation from the recommendation in accordance with Article of the DCGK, the Board of Directors agreements with incumbent members of the Board of Directors do not provide for a maximum severance payment. The reason for this is that some Board of Directors agreements were concluded before the recommendation in question was included in the German Corporate Governance Code and consequently enjoy the right of continuance. However, a maximum severance payment also has not been agreed for newly concluded Board of Directors agreements, as the Board of Directors agreements are regularly concluded for the length of the appointment period only and are not subject to ordinary termination. Therefore, early termination of the Board of Directors agreement without an important reason is possible only by mutual agreement. In the related negotiations, the Supervisory Board aims to take into account the recommendation in Article of the DCGK. Both in the composition of the Board of Directors and in proposals for the election of members of the Supervisory Board, the recommendations under Articles and of the DCGK stipulate that attention should be paid to a specifiable age limit and to diversity, among other things. The company does not comply with either of these proposals, as in the company s opinion neither of the two criteria is a suitable deciding factor for appointing members of the Board of Directors or for electing members of the Supervisory Board. Rather, while taking account of the other aspects to which attention must be paid, the knowledge, skills and experience required in the respective area of business or responsibility should be key, in the opinion of the company, to selecting suitable candidates. Baden-Baden, Germany, May 3, 2011 GRENKELEASING AG The Supervisory Board The Board of Directors