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Siemens Probes Top Labor Representative Over Salary Boost

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Oct. 10 (Bloomberg) -- Siemens AG, Europe’s largest engineering company, is investigating whether its highest-ranking employee representative received an improper salary increase when he took the post.

As part of an inquiry into whether works council head Lothar Adler’s contract can be extended beyond the mandatory retirement age, Siemens is also evaluating historical “employment law issues,” the Munich-based company said in a statement. Sueddeutsche Zeitung yesterday reported that Adler received a 100,000 euro ($135,150) wage increase when he became works council head in 2008.

“A decision over an extension of Mr Adler’s contract has not yet been made,” Siemens said in the e-mailed statement. “In the course of the internal investigation, everyone is being spoken to who was involved in the decision and who has had responsibility in the meantime.”

In the past four months, management changes include finance head Joe Kaeser replacing Peter Loescher as chief executive officer, and the departure of Brigitte Ederer, the personnel chief. Chief Technology Officer Klaus Helmrich has now also assumed responsibility for personnel issues.

Siegfried Russwurm, who now heads the industry division, which has about 19 billion euros in annual revenue, was in charge of personnel matters in 2008 when Adler, a member of the IG Metall metalworkers union, became works council chairman.

Former Siemens board member Johannes Feldmayer was convicted by a German court that same year for authorizing payments intended to help cultivate an “employer friendly” labor group at the company. Feldmeyer was tried over payments of more than 30 million euros of Siemens funds to the AUB Association of Independent Employees from 2001 through 2006, alongside Wilhelm Schelsky, the head of AUB. Schelsky’s conviction was later partly overturned.

Adler didn’t immediately respond to an e-mailed request for comment from Bloomberg News. Russwurm wasn’t available to comment, Siemens said in an e-mail.

To contact the reporter on this story: Alex Webb in Munich at awebb25@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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