Download Report

78
Annual Report 2014 of the HARTMANN GROUP | Additional Information
Report on Corporate Governance
In the Annual Report, the Board of
Management and Supervisory Board
of PAUL HARTMANN AG outline
the Company’s Corporate Governance,
even though the Company is not listed
on the stock exchange in the sense of
section 3 paragraph 2 of the German
Stock Corporation Act (AktG) and
as such the German Corporate
Governance Code does not apply to it.
Nevertheless, the Board of Management and Supervisory Board have
agreed to set out the Company’s
Corporate Governance. This, however,
does not occur in conjunction with a
declaration on the management of the
Company, as the decisive conditions
governing the submission of a
declaration of this nature as outlined
in section 289a of the German
Commercial Code (HGB) do not apply.
Management and control structure: Board of
Management and Supervisory Board
The Board of Management is the Group’s uppermost
executive body. It is duty-bound to act in line with the
interests of the Company, the statutory regulations and
the Statutes, and to seek to enduringly increase the
Company’s value.
The Supervisory Board is legally obliged to appoint
the members of the Board of Management. The Board
of Management of PAUL HARTMANN AG currently
consists of five members, one of whom is appointed
Chief Executive Officer. The names of the members of
the Board of Management are listed on page 73 of the
Annual Report. In business 2014, there were no changes
to the Board of Management of the Company.
With regard to diversity in the Board of Management, the Supervisory Board, as has been the case to
date, will make decisions on the compilation of the
Board of Management in line with objective criteria,
especially the suitability of the person in question for
the task at hand. Should it become legally necessary,
the Supervisory Board will address the specification of
targets relating to the inclusion of women in the Board
of Management. Neither the Supervisory Board nor the
Board of Management will tolerate the discrimination
of individual persons or groups or their harassment or
disadvantaging because of certain characteristics and
will especially not permit unequal treatment.
The Board of Management ensures compliance with
legal regulations and Company guidelines, and works
towards making certain that Group companies adhere to
them. Moreover, it makes sure there are appropriate risk
management and risk controlling structures in place in
the Company.
The functional responsibilities of the individual
members of the Board of Management and the matters
reserved for the full Management Board likewise result
from the rules of procedure and segmentation of
responsibilities for the Board of Management and the
required majority on the Management Board.
Annual Report 2014 of the HARTMANN GROUP | Additional Information
The Board of Management makes decisions regarding
the allocation of Company management functions in
line with objective criteria such as the suitability of the
person in question for the task at hand. Here, the Board
of Management also takes diversity into account, and
especially seeks to achieve an appropriate representation
of women. In recent years, it has demonstrated this with
several of its staffing decisions. Should there relevant
legal quotas be introduced, the Supervisory Board will
address setting targets on the inclusion of women in the
top two levels of management.
PAUL HARTMANN AG’s Supervisory Board has
12 members. Under the terms of the German Code
termination Act (MitbestG) it consists of equal numbers of
representatives of the shareholders and of the employees.
The names of the members of the Supervisory Board are
listed on page 73 of the Annual Report.
According to the Supervisory Board, the Board has
an appropriate and sufficient number of independent
members.
Between the Supervisory Board meetings, the
Chairman of the Supervisory Board is in permanent
contact with the Chief Executive Officer. Together, they
discuss strategy, planning, business trends, possible risks
and risk management, and compliance, as well as all
other events that are of crucial importance with regard
to assessing the situation and developments, and for
managing the Company.
Shareholder representatives are elected by the
Annual General Meeting. The last elections took place
at the AGM on May 3, 2013. There was a change to
the Supervisory Board effective July 1, 2014, when
Wolfgang Schwarz, a member representing the
employees, left the Board; in his place Joachim Bader
joined the Supervisory Board as a substitute member.
The legislative period for all members of the Supervisory
Board ends with the conclusion of the ordinary AGM
in 2018.
With regard to the composition of the Supervisory
Board the notes regarding diversity in the Board of
Management apply accordingly.
The members of the Supervisory Board are themselves responsible for completing any (further) training
required for the fulfillment of their duties. The Company
provides appropriate support for such measures. In the
year under review, in addition to the annual efficiency
audit meeting, the Supervisory Board also attended a
training session on compliance management in relation
to supervisory board activities.
The Supervisory Board has elected committees from
among its own ranks, whose members are balanced to
reflect the ratio of shareholder/employee representatives;
these committees fulfill certain functions instead of the
full Supervisory Board and in other cases prepare the
resolutions to be made by the Supervisory Board. The
chairpersons of the committees report regularly to the
Supervisory Board on the work conducted by the
committees.
In accordance with the stipulation of section 107
paragraph 3 item 3 in conjunction with section 87 of
the German Stock Corporation Act (AktG) the Board of
Directors Committee has the duty, among other things,
to prepare the decisions to be taken by the Supervisory
Board regarding the appointment and recall of members
of the Board of Management and contractual matters
concerning them, as well as ensuring the long-term
succession planning for the Board of Management
within the legal and regulatory framework.
The Audit Committee is responsible for monitoring
the accounting procedures, the efficacy of the system of
internal controls, the risk management and internal audit
systems, external auditing, and compliance. This also
includes ascertaining the requisite independence of the
auditor and examining any additional services performed
by him, determining the focal points of the audit, and
agreeing on the fee. The Chairperson of the Audit
Committee holds the requisite qualifications to discharge
this duty.
79
80
Annual Report 2014 of the HARTMANN GROUP | Additional Information
The Supervisory Board has, moreover, set up a
ominations Committee. This consists exclusively of
N
representatives of the shareholders. Its sole task is to
propose suitable candidates to the Supervisory Board as
representatives of the shareholders on the Supervisory
Board for the latter’s proposals for candidates in
elections at the Annual General Meeting.
For legal reasons there is also an Arbitration
Committee (a Permanent Committee in accordance
with section 27 paragraph 3 of the MitbestG).
In accordance with the Statutes, only such persons
as are not older than 75 at the time of election are
eligible for election as shareholder representatives. The
last elections of shareholder representatives on the
Supervisory Board were held at the Annual General
Meeting on May 3, 2013 as individual elections. The
Supervisory Board had previously informed the AGM
that, in the event of his reelection, the current Chairman
of the Supervisory Board would once again stand for
this office.
The Board of Management and Supervisory Board
of PAUL HARTMANN AG are constantly aware of the
full responsibility they bear for their actions. PAUL
HARTMANN AG’s directors & officers insurance (D&O
insurance) for the Supervisory Board does not require
cost-sharing on the part of its members, with the
exception of a liability reimbursement for claims in the
USA. The Supervisory Board is convinced that costsharing would not increase the motivation and sense of
responsibility of its members. In contrast, the contracts
of members of the Board of Management envisage
cost-sharing in line with section 93 paragraph 2 clause 3
of the AktG.
The Supervisory Board’s Rules of Procedure contain
an extensive catalog of transactions requiring its
approval, thereby supporting the Supervisory Board’s
stricter monitoring and control duties. Moreover, these
Rules of Procedure stipulate an upper age limit for
members of the Board of Management.
Management and Supervisory Board
Remuneration
The remuneration of the Board of Management, after
considering any remuneration from Group companies, is
determined by the full Supervisory Board on the basis of
an assessment of performance by the Board of Directors
Committee. Members of the Board of Management are
remunerated in accordance with their functions and
performance, the economic situation, the development
and future prospects of the HARTMANN GROUP, as well
as the customary amount of compensation in comparison
with similar companies. The Supervisory Board also
includes the remuneration structure applied elsewhere in
the Company in its deliberations. There is no guarantee
of payment in the case of a premature termination of
Board of Management membership, even if the termi
nation results from a change of control.
The basic guidelines for Board of Management
remuneration are explained in the annual financial
statements and were disclosed in greater detail at the
Annual General Meeting.
The overall remuneration is composed of a fixed and
a variable component. The fixed components and those
based on an assessment basis of several years entail
upper limits in terms of the amount. The further variable
remuneration components, which are based on a oneyear assessment basis, limit the claim by members of the
Board of Management by including an upper limit for
the target value; the variable elements accord less
importance to an “assessment basis of several years”.
Since PAUL HARTMANN AG shares are only traded in
the Entry Standard of the Open Market at the Frankfurt
Stock Exchange and liquidity in the equity is comparatively low, the share price cannot be used as a general
basis for assessing remuneration components such as
these.
Annual Report 2014 of the HARTMANN GROUP | Additional Information
Overall remuneration of the Board of Management
is outlined in the Notes to the Consolidated Annual
Financial Statements (Konzernanhang) of the unabbre
viated German version of this Report presented on
page 140. The supplementary sections to the German
Commercial Code introduced on August 3, 2005 with
the Act on Disclosure of Board of Management Remune
ration, according to which individual disclosure shall be
made of Board of Management remuneration, apply
only to publicly listed companies and thus not to PAUL
HARTMANN AG. The Company desists from publishing
any further information. This is not only out of respect
for the privacy of members of the Board of Management, but also because no noteworthy additional
information of relevance to the capital market can be
derived from the statements outlined there.
The remuneration of the Supervisory Board is
appropriate in relation to the duties of its members and
the condition of the Company. It consists of a fixed and
a variable component as well as a component related
to the long-term success of the company, plus the
attendance fees. A bonus is granted for members of the
Audit Committee and/or Board of Directors Committee.
The particular responsibility and extra workload borne by
the Chairman and Deputy Chairman of the Supervisory
Board and the Chairman of the Audit Committee and
Board of Directors Committee are remunerated separately
in the form of a bonus. In the event of a Supervisory
Board member chairing more than one committee, the
highest single sum shall apply.
In business 2014, the Supervisory Board convened
for six meetings; in addition, the Audit Committee
convened three times and the Board of Directors
Committee four times, and the Nomination Committee
once; the Permanent Committee did not convene in the
year under review. No member of the Supervisory Board
participated in less than half the meetings of the whole
Supervisory Board or its committees of which he or she
is a member.
Supervisory Board remuneration for the financial
year 2014 is made up, in accordance with the provisions
of our Statutes (excluding VAT and withholding tax) as
follows:
– The Chairman of the Supervisory Board received for his
membership of the Supervisory Board, Audit Committee,
and Board of Directors Committee a fixed emolument
of EUR 33,000, and variable remuneration of EUR
36,000, plus remuneration of EUR 7,425 relating to
the long-term success of the Company. EUR 27,000
was paid for attending all the Supervisory Board
meetings, EUR 4,500 was paid for attending the
meetings of the Audit Committee, and EUR 12,000
was paid for taking part in meetings of the Board of
Directors Committee.
– The Deputy Chairman of the Supervisory Board
received for his membership of the Supervisory Board,
Audit Committee and Board of Directors Committee
a fixed emolument of EUR 22,000, and variable
remuneration of EUR 24,000, plus remuneration of
EUR 4,950 relating to the long-term success of the
Company. Attendance money totaled EUR 18,000
(Supervisory Board), EUR 4,500 (Audit Committee) and
EUR 6,000 (Board of Directors Committee).
– The Chairman of the Audit Committee received a fixed
emolument of EUR 22,000, and variable remuneration
of EUR 24,000, plus remuneration of EUR 4,950
relating to the long-term success of the Company.
Attendance money totaled EUR 18,000 (Supervisory
Board), EUR 9,000 (Audit Committee) and EUR 6,000
(Board of Directors Committee).
– The remaining member of the Audit Committee
received a fixed emolument of EUR 8,500 and variable
remuneration of EUR 12,000, plus remuneration of
EUR 2,475 relating to the long-term success of the
Company. Attendance money totaled EUR 9,000
(Supervisory Board), and EUR 4,500 (Audit Committee).
81
82
Annual Report 2014 of the HARTMANN GROUP | Additional Information
– The fixed emolument for the additional member of the
Board of Directors Committee in office until the middle
of the year was EUR 4,250, and for his successor EUR
6,678; both members received variable remuneration
of EUR 18,000 and remuneration of EUR 3,713
relating to the long-term success of the Company.
Together, attendance money totaled EUR 15,000
(Supervisory Board) and EUR 6,000 (Board of Directors
Committee).
– The remaining members of the Supervisory Board each
received a fixed emolument of EUR 6,000, and variable
remuneration of EUR 12,000, plus remuneration of
EUR 2,475 relating to the long-term success of the
Company, insofar as their membership lasted the
entire business year. Those who were members of
the Supervisory Board for only part of the business
year received a corresponding fixed and variable
remuneration on a pro-rated basis as well as
remuneration relating to the long-term success of
the Company. Attendance money for full Supervisory
Board meetings for these members totaled EUR
54,000, of which four Supervisory Board members
each received EUR 9,000, two members each received
EUR 7,500, and one member received EUR 3,000.
Thus in accordance with the provisions of the
Statutes, total emoluments for the Supervisory Board
come to EUR 560,528; of this figure, EUR 135,428 was
paid for fixed emoluments, EUR 192,000 for variable
remuneration, EUR 39,600 for remuneration relating
to the long-term success of the Company, and EUR
193,500 for attendance money.
The employee representatives on the Supervisory
Board state that a notable part of their Supervisory
Board remuneration is donated to the Hans Böckler
Stiftung.
Shareholder relations
Shareholders exercise their decision-making and con
trolling rights at the General Meeting held annually, at
which every share is accorded one vote. They have the
opportunity to exercise their voting rights themselves or
appoint a proxy. PAUL HARTMANN AG supports its
shareholders in the exercise of the voting rights by
offering them a voting rights proxy, who can also be
reached during the General Meeting.
Shareholders receive the necessary documentation
for the General Meeting directly from the Company.
Moreover, the annual report of the HARTMANN GROUP
and the annual financial statements of PAUL HARTMANN
AG, the invitation, the agenda for and other documents
connected with the Annual General Meeting are made
easily available to shareholders on the HARTMANN
website.
However, in individual cases we reserve the right to
take advantage of any simplifications of the German
Stock Corporation Act (AktG) with regard to invitations
to Annual General Meetings and holding such meetings,
and to furnish our shareholders directly with certain
documents, e.g., individual corporate contracts and the
associated reports. We shall continue to do this in the
future, in particular when the publication of such
documents beyond the scope of our shareholders
could have an adverse effect on the interests of the
Company.
Given our shareholder structure and the regular
presence at our shareholder meetings of over 80% of
the share capital, we currently see no distinct benefit
from broadcasting the General Meeting by modern
communications media given the associated costs;
neither do we consider, given these conditions, the
option of an absentee ballot to be necessary. For this
reason, we deliberately refrained from including such
options in the Statutes.
PAUL HARTMANN AG has not in the past prepared
any interim reports in the sense of section 40 of the
Stock Exchange Act as the Company is not a publicly
listed company in the sense of section 3 paragraph 2 of
the German Stock Corporation Act (AktG). Furthermore,
the regulations on producing six-monthly financial
Annual Report 2014 of the HARTMANN GROUP | Additional Information
reports pursuant to section 37w paragraph 1, clause 1
of the German Securities Trading Act (WpHG) and the
publication of quarterly financial reports or interim
disclosures by the Management pursuant to section 37x
paragraphs 1 and 3 of the WpHG are applicable to
publicly listed companies only, and as such not to PAUL
HARTMANN AG.
Ever since its shares have been listed in the Entry
Standard of the Frankfurt Stock Exchange, PAUL
HARTMANN AG has prepared and published six-monthly
financial reports in accordance with the regulations for
this segment. Furthermore, it prepares and publishes
interim reports in the form of shareholders’ letters,
which, like the six-monthly financial reports, are also
accessible by third parties on the Company’s website.
Ever since its shares were first included in the Entry
Standard on the Open Market of the Frankfurt Stock
Exchange, the Company has been subject to the
regulations governing ad-hoc reporting for that
segment.
Audit of annual financial statements
On May 16, 2014, the PAUL HARTMANN AG General
Meeting appointed PricewaterhouseCoopers Aktien
gesellschaft Wirtschaftsprüfungsgesellschaft in Stuttgart
to audit the annual financial statements and consolidated
annual financial statements for business 2014. As a first
step, the Audit Committee verified whether the auditors
displayed the necessary impartiality. The Audit Committee was in receipt of the auditor’s report recommended
by the German Corporate Governance Code. After the
election, the Audit Committee recommended to the
Supervisory Board that the latter award the auditing
commission accordingly. This included a recommen
dation with regard to setting a fee. The Audit Committee
decided on the focus of the audit, called in the auditor
for consultation about the annual financial statements
and consolidated annual financial statements, and
instructed him to report on the basic findings of this
audit. The consolidated financial statements are drawn
up taking into consideration the relevant international
accounting principles.
German Corporate Governance Code
In view of the continuous, very formal emendations
made to advance the Code, and the ensuing work
involved in accommodating them, not to mention the
increasing subsequent legal risks, the Board of Management and the Supervisory Board desist from a voluntary
declaration in keeping with section 161 of the German
Stock Corporation Act (AktG) relating to deviations
from the standards outlined in the German Corporate
Governance Code, as well as from a voluntary report
about the status of the implementation of the
recommendations and suggestions in said Code.
These standards and issuing a declaration in com
pliance with section 161 of AktG are legally binding only
for publicly listed stock corporations and for companies
that have exclusively issued securities other than shares
for trading in an organized market, and of which the
shares issued, at the companies’ own instigation, are
only traded on a multilateral trading system. PAUL
HARTMANN AG does not come into these categories.
Regardless of this, the Company still envisages
adhering to the contents of the previous Corporate
Governance Code and reporting accordingly.
Heidenheim, March 19, 2015
The Board of Management and the Supervisory Board
83