Declaration of Conformity 2008 - Wacker Chemie AG


Declaration of Conformity 2008

Wacker Chemie AG attaches great importance to the rules of proper Corporate Governance. With a few exceptions, we comply with the recommendations contained in Germany’s Corporate Governance Code. The exceptions are listed in the following declaration of conformity (issued December 11, 2008 by the Executive Board and Supervisory Board in accordance with Section 161 of the German Stock Corporation Act (AktG)):

Declaration of Conformity 2008 by the Executive Board and the Supervisory Board of Wacker Chemie AG

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

In December 2007, the Executive Board and the Supervisory Board of Wacker Chemie AG issued the last declaration of conformity pursuant to § 161 German Stock Corporation. Since that time, Wacker Chemie AG has complied with the recommendations of the German Corporate Governance Code (Code) as amended on June 14, 2007 with the following exceptions (not including lit. d) and will comply with the recommendations of the Code as amended on June 6, 2008, except as follows:

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 the 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 and resolution concerning the Executive Board’s compensation system structure by the full Supervisory Board
The structure of the Executive Board’s compensation system, including the essential contract components, is reviewed regularly and decided upon 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) Severance pay cap
With regard to new appointments to the Executive Board as well as the re-appointment of Executive Board members, we will comply with this recommendation of the Code.

e) 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.

f) 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 pre-determination which is also not provided for under German law. For these reasons, we do not comply with this recommendation.

g) 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 efficiency 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.

h) 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. The committee’s task 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 as we do not believe such a committee to be necessary.

Munich, December 11, 2008