STUTTGART - DaimlerChrysler AG aims to double in size over the next decade, chairman Jurgen Schrempp told shareholders here. The target translates into 7 percent growth per year.
'We will achieve this target, possibly not just through internal growth,' said Schrempp. 'This company will remain a prime mover in the (consolidation) process.'
He was speaking during D/C's first-ever annual meeting, which was attended by 20,000 shareholders.
The main themes of questioners, who were each given 10 minutes to speak, were the troubled Smart car project, executive pay and DaimlerChrysler's alleged involvement in land mine production. The company says it doesn't make land mines.
D/C unveiled a new performance-related pay plan for its 17-member management board and said it would persevere with the Smart car - at least for now.
The mood was generally supportive of management strategy, and several speakers welcomed the US board members sitting through the nine-hour meeting.
The company spent euro 8.9 million ($9.6 million) to stage the meeting at the Hanns-Martin Schleyer Hall near D/C's Unterturkheim factory. Shareholders filled the hall and eight overflow tents set up nearby. The financial news they heard was good.
DaimlerChrysler expects revenues to reach euro 153 billion in 2001, 16.2 percent higher than the euro 131.7 billion achieved in 1998.
Revenue rose 9 percent to euro 46.7 billion in the first four months of 1999. Schrempp said that operating profits did even better, though no figures were released.
Revenue for 1999 is expected to reach euro 140 billion due largely to a strong performance in North America and better-than-expected sales in Europe. That is up from earlier forecasts of euro 135 billion.
New pay plan
The new management board compensation system is aimed at harmonizing US and German pay levels and bonus plans that existed before the merger. US managers have traditionally earned much higher salaries than their German counterparts. The new structure includes a base income and three performance-related elements.
'The new method of remuneration is identical for all members of the board of management - irrespective of nationality and location,' said supervisory board chairman Hilmar Kopper.
The board includes 10 executives from the former Daimler-Benz and seven from the former Chrysler.
Kopper said the base salary is determined through annual comparisons with 15 international companies. An annual bonus is based on operating profits and may also take into account shareholder returns and revenue growth.
The third element is a three-year incentive based on executive performance against operating plans and competitor performance. After two years, this element will be based on synergy benefits achieved through the merger.
Share options will also be offered. Kopper said the board will present a new stock option plan to the annual general meeting in 2000.
The pay plan also includes about 100 further top company executives.
Kopper, chairman of Deutsche Bank, DaimlerChrysler's largest shareholder, rebuffed tough shareholder questions about excessive pay. He said D/C would not release information about individual board members' compensation. As a German company, he said US disclosure requirements do not apply.
In 1997, the total income, including bonuses, paid to Chrysler's top five executives exceeded that received by their 10 Daimler-Benz AG counterparts. Daimler-Benz's top 10 managers' income totaled around $11 million in 1997, excluding stock options.
Shareholders were skeptical about prospects for the radical Smart car. Schrempp said that DaimlerChrysler was prepared to make all the 'cost, marketing, price and management' changes needed to make Smart successful.
However he did not deny German press reports quoted by questioners which said that the project had only 3 to 6 months to improve - or it would be killed off.
A spokesman for Micro Compact Car, the D/C subsidiary that makes the Smart, said that 1999 sales of 80,000 units is the 'minimum defense line' for the car. The original target was 130,000 cars.
-Reuters News Service contributed