Chancellor Angela Merkel wants to strengthen shareholder oversight of executive compensation at listed companies before Germany’s Sept. 22 elections, according to Ronald Pofalla, her chief of staff.
Merkel’s Christian Democrat-led coalition intends to pass the legislation before parliament breaks for its summer recess on June 28, Pofalla said in a speech in Berlin today. “We will approve this bill in Cabinet within the next few weeks,” he said. The proposal so far doesn’t include a pay cap.
Debate in Germany gathered pace after Swiss voters on March 4 backed pay limits including a binding annual shareholder vote on executive compensation at listed companies and a ban on big payouts for new hires and for managers when they leave. German opposition parties hailed the Swiss referendum, increasing pressure on Merkel to act.
Merkel’s Christian Democrats and the Free Democratic Party, her junior coalition partner, agreed on March 21 to seek legislation that would give shareholder meetings of listed German companies the “mandatory task” of making binding pay recommendations to the supervisory board, according to a government statement at the time.
Pofalla didn’t provide more specifics on the proposal.