Financial exchange group Deutsche Börse has introduced a cap on the total remuneration of its executive board members. The company said the decision to introduce the cap was taking at its supervisory board meeting this week and was part of the continuing development of its executive board remuneration system.
The annual remuneration of the executive board, including fixed and variable compensation components as well as pensions, is to be limited to EUR 9.5 million. Deutsche Börse said the cap would become effective for the executive board remuneration from this year.
The company said that the supervisory board began work on the executive board remuneration following Deutsche Börse’s last AGM in May. The changes were developed following intensive discussions, the company said, involving external remuneration experts on the supervisory board and on the board’s personnel committee. The revised executive board remuneration system is consistent with accepted standard market practice and meets the requirements of key stakeholders Deutsche Börse said.
Joachim Faber, chairman of the supervisory board of Deutsche Börse said: “In the interest of our shareholders, we want to continue to offer the Deutsche Börse executive board competitive incentives for good performance and sustained business success, while at the same time preventing possible and unwanted extremes. This is achieved with the cap in the adjusted remuneration model.”
Separately Deutsche Börse has recently announced that it is prepared to pay fines in order to settle an investigation by the Frankfurt Public Prosecutor into insider trading allegations against its chief executive Carsten Kengeter.
The company said it agreed to pay fines of €5 million and €5.5 million under separate proceedings in relation to the alleged insider trading in December 2015 and of an alleged failure to publish an ad hoc announcement in January 2016.
Deutsche Börse said, however, it did not accept the public prosecutor’s view concerning the accusations raised. The company said the executive and supervisory boards of Deutsche Börse instructed external experts to assess the course of events and had analysed the results of this assessment. The company said that this review did not find any elements indicating a violation of the respective capital markets rules at Deutsche Börse.
The company said the decision to accept the fines was made for the purpose of protecting the overriding interests of the company indicating that the investigation proceedings had become a distraction to the management of the company.
Faber said: “We did not take this decision lightly. It has been one of the most difficult decisions I have faced together with my colleagues of Deutsche Börse AG’s supervisory board. By making this decision, we have established the prerequisites for the closure of the proceedings. Now, it is incumbent upon the Local Court (Amtsgericht) to rule on this. Subsequently, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) and the Hessian exchange supervisory authority will carry out their reliability assessments. Only afterwards will the Supervisory Board of Deutsche Börse AG be addressing the subject of the contract renewal with Carsten Kengeter.”
A Reuters report this week suggested that Kengeter could be losing board support with the insider trading investigation having dragged on since February and after he faced criticism for the failure of a proposed merger deal with the London Stock Exchange.