Discussion Paper of the Institute for Organisational Economics 12/2016

Übereinstimmung von Entsprechenserklärungen und Erklärungsentsprechen bei Abfindungen
Ute Schottmüller-Einwag
December 2016



Congruity between Declarations of Conformity and Actual Conformity Regarding Severance Payments

This study examines the congruity between the actual conformity and the declaration of conformity regarding recommendation 4.2.3 para 4 sentence 1 German Corporate Governance Code (GCGC) from 2010 until 2014. Therefore all declarations of conformity as well as all severance payments publicised in annual reports in case of premature termination of the appointment of a member of the management board of a corporation listed in the DAX have been researched, the relations of the severance payments have been identified and compared to the cap recommended by the GCGC. In 57 % of all cases, in which the corporations had declared conformity, the cap was exceeded, when negotiating severance payments. Furthermore it has been analysed whether corporations listed in the DAX that had exceeded the recommended cap disclosed this in their following declaration of conformity in the section regarding the past. No corporation disclosed its past exceedance in the following declaration of conformity. During the period examined the cap recommended by the GCGC has not developed a binding effect on the majority of cases of premature termination.