Declaration of Conformity 2006 - Wacker Chemie AG


Declaration of Conformity 2006

Declaration of Conformity 2006 by the Executive Board and the Supervisory Board of Wacker Chemie AG

1. General Declaration pursuant to § 161 German Stock Corporation Act

We declare that we complied in 2006 and will comply in 2007 with the recommendations of the “Government Commission on German Corporate Governance Code,” effective at the time of this declaration and as issued and published by the Federal Ministry of Justice in the offi cial section of the electronic Federal Gazette except for the following.

2. Exceptions

a) D&O Insurance – Deductible
D&O insurance / policy effected for the corporation’s board members or employees acting as a management body does not include a deductible for the individual.

b) Corporate Governance Report
A report on the corporation’s corporate governance by the Executive Board and the Supervisory Board shall be included in the annual report. This report shall also include an explanation of any deviation from the recommendations of the Code. Such report is regulated by § 161 German Stock Corporation Act which partially varies from the Code in regards to content. The Executive Board and Supervisory Board have decided to execute a declaration solely in accordance with the legal provisions. To that effect, we depart from the recommendations of the Code in regards to content and form of the Corporate Governance Report.

c) Regular review of the Executive Board’s compensation system structure by the full Supervisory Board

The structure of the Executive Board’s compensation system is reviewed regularly by the Executive Committee. A report detailing the activities of the Supervisory Board committees, including the activities of the Executive Committee, is given regularly in the plenary meeting of the Supervisory Board. If and to the extent that the recommendation of the Code goes beyond the aforementioned reporting, we do not comply.

d) Information regarding the main features of the Executive Board’s compensation system at the Annual Shareholder Meeting
Our annual report includes extensive information, including facts about the Executive Board’s compensation system for our shareholders. We regard any further proactive measures as unnecessary.

e) Announcement of proposed candidates for the chair of the Supervisory Board to the shareholders
This recommendation states that shareholders are to be informed of any candidates for the Supervisory Board chair, even though the Supervisory Board usually still has to be appointed. Under German law, the Supervisory Board chair is to be chosen by, and from among, the Supervisory Board members. There is currently no legal requirement to announce the candidates for the chair from among a group of as-yet unappointed Supervisory Board members. Furthermore, this would, above all, result in a de facto predetermination which is also not provided for under German law. For these reasons, we do not comply with this recommendation.

f) Transfer of Executive Board members to the Supervisory Board, taking the chair of the Supervisory Board or the chair of committees
In our opinion, it may very well make sense for former members of the Executive Board to join the Supervisory Board and also to chair the Supervisory Board or various specific committees. In fact, the knowledge of former Executive Board members about the company increases the effi ciency of control exercised by the Supervisory Board. We do not see any disadvantage in a Supervisory Board which, in accordance with the Code, is well-balanced with respect to its members. As we do not agree with this recommendation we do not comply with it.

g) Publication of interim reports
In 2006, the first two quarterly reports were not publicly posted within the 45 days recommended by the German Corporate Governance Code. However, this recommendation was met as of Q3 2006 and will be complied with throughout 2007.