Declaration of Conformity 2009 by the Executive Board and the Supervisory Board of Wacker Chemie AG
1. General Declaration Pursuant to § 161 German Stock Corporation Act
In December 2008, the Executive Board and the Supervisory Board of Wacker Chemie AG issued their last declaration of conformity pursuant to § 161 German Stock Corporation Act (AktG). Since that time, Wacker Chemie AG has complied with the recommendations of the German Corporate Governance Code (Code) in the version dated 6 June 2008 with the following exceptions and will comply with the recommendations of the Code in the version dated 18 June 2009 except as follows:
a) D&O Insurance - Deductible
The law and the articles of association set clear limits in regards to the Supervisory Board’s ability to exert influence on the business activities of a stock corporation. Pursuant to § 76 para. 1 of the German Stock Corporation Act, the Executive Board is responsible for independently managing the corporation. The Supervisory Board is instrumental in defining the main features of the corporate strategy. However, beyond this contribution, the Supervisory Board’s abilities are limited in terms of influencing the implementation of the corporate strategy or the operative business. The same applies to measures taken to avert damage or loss to the company. Since the Supervisory Board members receive a relatively low representation allowance when compared to the Executive Board members’ compensation, we do not deem the agreement of a deductible reasonable for members of the Supervisory Board.
In the future, D&O insurance taken out for the Group will include the deductible mandatory by law for members of the Executive Board. For practical reasons, the change will be effective as of 1 July 2010.
b) Corporate Governance Report
In 2008, the Executive Board and the Supervisory Board submitted a report on the corporation’s corporate governance in accordance with the provisions of § 161 German Stock Corporation Act. Since the recommendation of the Code regulated a report on corporate governance which partially varied in terms of content, the Executive Board and the Supervisory Board decided to execute a declaration solely in accordance with the legal provisions and to avoid duplications/repetitions, since these do not offer any additional value.
The Executive Board and the Supervisory Board have decided that, in the future, they will provide a report on corporate governance as an integral part of the declaration on corporate management which is required by § 289 lit. a German Commercial Code (HGB). This report shall contain comprehensive information on the company’s corporate governance in accordance with the legal provisions. The Executive Board and the Supervisory Board do not recognize any additional value in the duplication/repetition of statements on corporate governance beyond the legal provisions.
c) Review and Resolution Concerning the Structure of the Compensation System by the Full Supervisory Board
Since the last declaration of conformity was made, the Executive Committee has regularly discussed and decided on the structure of the compensation system, including the contractual components, because the Supervisory Board considered this procedure efficient. A report detailing the activities of the Supervisory Board committees, including the activities of the Executive Committee, was given regularly in the plenary meeting of the Supervisory Board. In the future, the compensation system for the Executive Board will be resolved and reviewed by the full Supervisory Board in accordance with the recommendation. This procedure shall take into account that the full Supervisory Board will be charged by mandatory law with setting the Executive Board members’ remuneration.
d) Severance Pay Cap
We will comply with this recommendation of the Code on new appointments to the Executive Board as well as the re-appointment of Executive Board members.
e) Information Regarding the Main Features of the Executive Board’s Compensation System Structure at the Annual Shareholder Meeting
Our annual report provides extensive information, including facts about the Executive Board’s compensation system, to our shareholders. Any additional reporting by the Chairman of the Supervisory Board to the Annual Shareholder Meeting would not provide any further information. Therefore, providing such additional information to the Annual Shareholder Meeting by the Chairman of the Supervisory Board is considered dispensable. Our shareholders’ right of access shall of course not be affected thereby.
f) Formation of a Nomination Committee within the Supervisory Board
The Supervisory Board is to establish a Nomination Committee which is exclusively composed of shareholder representatives and whose task it is to make recommendations to the Supervisory Board with regard to suitable candidates for proposal to the Annual Shareholder Meeting.
We do not comply with this recommendation because, in view of our shareholder structure, it is our opinion that the formation of such committee is not appropriate. Due to the majority situation, nominations to the Supervisory Board must be agreed with the majority shareholder in any case, so that an additional nomination committee would not contribute to an increase in efficiency.
g) Announcement of Proposed Candidates for the Chair of the Supervisory Board to the Shareholders
According to this recommendation, shareholders shall be informed of any candidates for the Supervisory Board chair, even though as a rule, the Supervisory Board has not yet been appointed. Under German law, the Supervisory Board chair must be elected by, and from among, the Supervisory Board members. There is no legal requirement to announce the candidates for the chair from among a group of not yet appointed 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.
Munich, December 12, 2009