German-Listed Companies Should Cap Executive Pay: Panel

German-listed companies should limit pay and bonuses for top executives, according to a panel set up by the government in 2001 to promote transparency for investors.

“The recommendations are primarily intended to increase transparency and to make the information already available today easier to compare, without impacting on the systems of management-board remuneration,” the Corporate Governance Code Commission said in a statement today on how its rules for corporations should be amended.

When defining compensation structures, supervisory boards should take into account the relationship between what executive board members and senior managers make, as well as the pay of the company’s staff, the commission said. The panel didn’t say it would set a limit on what executive should be allowed to earn, leaving that to company boards.

Disputes in Germany over whether there should be a limit on what executives earn heated up when Martin Winterkorn, Volkswagen AG (VOW)’s chief executive officer, had his 2011 compensation set at 17.5 million euros ($23.7 million), an 87 percent increase from the year before. Including his 11 million- euro bonus, he was the best-paid CEO among DAX Index companies.

The panel also proposed amending rules to say an extraordinary shareholder meeting should be called if a company becomes the target of an acquisition bid. Corporations are required under German law to disclose any deviation from the corporate-governance code.

The panel -- with members including Commerzbank AG Chairman Klaus-Peter Mueller, Clifford Chance LLP partner Daniela Weber- Rey and economics professor Beatrice Weder di Mauro -- will take comments to today’s proposals until mid-March and deliberate on how to change the current code at a meeting in May.

To contact the reporter on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@Bloomberg.net.