Daimler cuts Zetsche's pay as management bonuses are reduced
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Daimler extended Zetsche's contract as CEO and head of the Mercedes-Benz unit by three years last week. |
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FRANKFURT (Bloomberg) -- Daimler has cut CEO Dieter Zetsche's total pay by 5.8 percent as managers' bonuses were reduced after profit targets were scrapped.
Zetsche's compensation for 2012 totaled 8.15 million euros ($10.9 million) compared with 8.65 million euros a year earlier, Daimler said today in its annual report. The combined short-term annual bonus of all eight management-board members was scaled back 28 percent to 4.65 million euros.
Daimler postponed long-standing earnings goals for 2013 in October and initiated a cost-cutting program because of the auto-market slowdown in Europe and an aging model lineup at its Mercedes-Benz brand.
"It's clear that some targets were not reached" at Daimler, said Frank Biller, an analyst at Stuttgart-based LBBW. "It's easily comprehensible that the variable remuneration declined."
The company is the second German carmaker to announce a pay cut for top management for 2012. Volkswagen said on Feb. 22 that CEO Martin Winterkorn will receive 17 percent less compensation.
Contract extended
Zetsche's contract as group CEO and head of Mercedes-Benz was extended by three years to the end of 2016 on Feb. 21. Zetsche, 59, took over from Juergen Schrempp as CEO in 2006. Daimler also said that Andreas Renschler, its current head of the truck unit, will swap responsibilities with Wolfgang Bernhard, who runs production and purchasing at the Mercedes car division, as of April.
Zetsche's total remuneration comprised a base salary of 2 million euros, unchanged from a year earlier, a short-term bonus of 1.43 million euros, a medium-term bonus of the same amount, which depends on the performance of Daimler shares and which will be paid next year, and long-term variable compensation which includes stock options.
Renschler's compensation declined 3.2 percent to 3.29 million euros, and Bernhard's was cut 4.6 percent to 3.05 million euros. Chief Financial Officer Bodo Uebber's remuneration fell 3.8 percent to 3.54 million euros.
Daimler stock has gained 10 percent this year, valuing the carmaker at 48.7 billion euros.
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