Millions through bonuses and severance pay – DAX salaries in comparison

Current analysis shows which DAX bosses receive the biggest payouts. CEOs of car companies in particular came out well. Retirement payments played a special role.

Munich – More and more companies listed in the important DAX stock exchange index are presenting savings programs. They often include plans for major job cuts. This is more of a problem in some companies than others – companies in the automotive sector, for example, are doing comparatively well. To find out which DAX bosses earn the most, the news agency Reuters current published research.

Mercedes boss in sorry position

The study authors refer to data from various companies’ compensation reports. Mercedes boss Ola Källenius is on the list with 12.74 million euros first place among the highest income earners. In 2023, the Swede overtook Deutsche Börse boss Theodor Weimer. He earned 10.60 million euros and finished just ahead of Belén Garijo, who leads Merck. Garijo has an annual salary of 10.53 million euros. These three are the only DAX bosses with a salary of more than ten million euros.

There, that’s what was reported Reuters, for top earners it’s less about a fixed salary and more about bonus payments. They receive this whenever they reach certain pre-set goals. Källenius and Weimer, for example, received high long-term bonuses last year. In the case of Källenius, the fixed basic salary is supplemented by a different payment in the form of an annual bonus, which is always received at the end of the financial year. On top of that, he receives compensation “in the form of a 4-year plan in conjunction with stock ownership guidelines”.

Bonus payments weigh heavily on DAX board members

Other DAX companies also have similar models, although it is possible in a modified form. Reuters “proportionately reduced” contributions wherever earnings reports deviated from the “normal presentation”. Among the top six DAX earners were three executives from the automotive industry, including Källenius. Porsche-Boss Oliver Blume and Oliver Zipse from BMW. Auto companies would make huge profits during the coronavirus pandemic because they didn’t have to offer discounts due to parts shortages.

At BMW, ESG criteria also play a role when it comes to calculating bonuses. In addition to permanent compensation, there is the achievement of financial and non-financial goals. Depending on how the managers achieved these goals, there is a reduction or increase in bonuses. And at Porsche, the group calculates how well the boss achieved the relevant annual goals. Depending on the level of achievement of the goal, there were higher or lower bonuses.

Stock plans as the gold standard

The analysts have identified Adidas boss Björn Gulden as a “secret front runner”. Although he was “only” in fifth place with a payment of 9.18 million euros, he received 11,900 shares of Adidas for switching from smaller competitor Puma. In the six-month evaluation, Adidas shares have grown in value – from less than 167 euros (October 2023) to 196 euros (April 2024). The new employer spent about 3.88 million euros on this, including taxes.

20 of the 40 directors received compensation of at least six million euros. For comparison: in 2022 there were 14. Twelve members of the board had to reduce their remuneration, 28 received the same amount as the previous year of 2022 or even more. Martin Daum from Daimler-Truck doubled his pay to 6.92 million euros through huge annual bonuses. Like Källenius, Daum also receives a fixed base salary, variable compensation and stock-based compensation in a “4-year plan approach”. Therefore, he is obliged to invest a fixed part of his personal wealth in the shares of Daimler Truck Holding AG.

Brutal charges may exceed compensation

The analysis showed that the severance pay of former managers often exceeds the compensation of their successors. For example, he mentions Herbert Diess, who will be appointed in 2022 VWthe boss resigned – he received 12.81 million euros in 2023, which even exceeds the payment of Källenius. Bill Anderson, CEO of Bayer, also received a lower salary than Werner Baumann, who retired early in May 2023.

German corporate giants are still not catching up to America’s situation. Tim Cook, the boss of Apple, recently received a payment of 94 million euros, Microsoft paid the CEO the same 52 million euros. “If you look at the absolute levels of payment, the mark of ten million euros continues to show itself as the absolute limit here in Germany,” he quoted. Daily news Marc Tüngler from the German Securities and Exchange Commission DSW in Düsseldorf. The public will accept nothing more.

DAX boards receive on average 38 times more than average. This was the conclusion reached by a study of investor advocates together with experts from the Technical University of Munich. They examined how the 40 largest listed companies paid their board members. “As CEO of the DAX group, you earned an average of 5.1 million euros in the financial year 2022. As a simple board member, an average of 2.9 million euros,” explained research author Gunther Friedl. According to the authors of the study, the gap between DAX board members and ordinary employees is narrowing.

And material from Reuters