The discussion about good corporate governance has brought attention to a topic that has for a long time been neglected.
What should an appropriate compensation system for the management board and the supervisory board look like?
There is general agreement that compensation must be guided by the financial condition of the company. According to the recommendations of the German Corporate Governance Code, variable compensation should “also” relate to long-term corporate success. Since long-term corporate success is the ultimate goal of shareholders, this requirement is certainly advisable. The system of valued-based compensation presented in this document implements the suggestions of the German Corporate Governance Code and turns them into specific recommendations for action in daily coprorate management.
The research will soon be available in English.
