Corporate Governance Report
- No agreement was able to be reached in negotiations with our liability insurance (so-called D & O insurance) carrier to obtain a lower premium if a deductible is arranged. We will therefore not arrange for
a deductible. A deductible would not improve the overall motivation and sense of responsibility of the members of the Management and Supervisory Boards. Both the Management and Supervisory Boards
work to the benefit of the enterprise.
(Point 3.8 of the Code)
- The Supervisory Board does not currently have a nominating committee.
A committee of this type will be formed in March 2008.
(Point 5.3.3 of the Code)
- The members of the Supervisory Board have in the past received and presently still receive fixed compensation, which does not contain any performance-related variable income components.
Their compensation is stated in the compensation report.
(Point 5.4.7 of the Code)
Shareholders
Our Financial Calendar, which is published in the Annual Report, in the Quarterly Reports and on our Internet website, informs our shareholders and other interested parties about major dates. At the Annual Shareholders Meeting, our shareholders are able to either exercise their voting rights in person or to have them exercised by a proxy of their choice or by an individual named by the Company who will be bound by their instructions.
Management Board
At its meeting on March 26, 2007, the Supervisory Board of Pfeiffer Vacuum Technology AG appointed Dr. Matthias Wiemer to the Management Board of the Company effective April 1, 2007.
Effective June 30, 2007, Chief Executive Officer and Chairman of the Management Board Wolfgang Dondorf left the Management Board at his own request after long years of successful service and entered retirement. The Supervisory Board appointed Manfred Bender the new Chief Executive Officer and Chairman of the Management Board.
The Management Board thus once again consists of two members: Diplom-Betriebswirt Manfred Bender (Chief Executive Officer and Chairman of the Management Board) and Diplom-Ingenieur Dr. Matthias Wiemer. These two members of the Management Board are responsible for the Company’s further development and strategy. Moreover, they are also highly involved in the Company’s day-to-day activities and bear operational responsibility.
The distribution of responsibilities within the Management Board is as follows:
The four-eyes principle applies: Major decisions are always made jointly. Personal expenditures, such as travel expenses, for example, must be approved by the other member of the Management Board. In addition to collaborating closely with one another and mutually informing one another on a daily basis, Management Board meetings are conducted every two weeks. Minutes of these meetings are kept, with a copy being provided to the Chairman of the Supervisory Board. No donations are made to political parties. Modest donations are made only to local facilities and institutions, with the focus on both educational as well as social and sports engagement.
The members of the Management Board work exclusively for Pfeiffer Vacuum. Manfred Bender has additionally held a seat on the supervisory board of Technotrans AG in Sassenberg, Germany, since 2006.
Supervisory Board
In accordance with statutory regulations and the Articles of Association and Bylaws of Pfeiffer Vacuum Technology AG, the Supervisory Board comprises a total of six individuals, with four members being elected by the shareholders and two members by the Company’s employees. The last elections to the Supervisory Board were conducted in the year 2006, which means that the term of office of all members of the Supervisory Board will end in 2011.
The Supervisory Board submits a slate of nominations for the election of shareholderrepresentative members of the Supervisory Board. In selecting the nominees, care is taken to assure that the Supervisory Board will at all times be composed of members who possess the requisite expertise, skills, abilities and professional experience, as well as sufficient independence. Both the international business activities of the corporate group as well as potential conflicts of interest are taken into consideration in this regard.
In 2007, the Supervisory Board comprised the following members:
- Dr. Michael Oltmanns (Chairman), Attorney at Law and Tax Advisor
- Götz Timmerbeil (Vice Chairman), Certified Public Accountant and Tax Advisor
- Michael J. Anderson, Investment Banker
- Wilfried Glaum, Business Administrator
- Helmut Bernhardt (Employee Representative), Development Engineer
- Manfred Gath (Employee Representative), Chairman of the Employee Council
Collaboration between the Management and Supervisory Boards
The Management and Supervisory Boards collaborate closely at quarterly meetings of the Supervisory Board, as well as at special meetings and in conference calls, if required. The Management Board reports to the Supervisory Board on the general position of the corporate group, including its risk position, through a monthly reporting system.
The Company has taken out liability insurance for the members of the Management and Supervisory Boards. No consultancy or other contracts for services or work were in force between members of the Supervisory Board and the Company during the period covered by this report. Should, in exceptional cases, a member of the Supervisory Board be active for the Company, for example as legal counsel, such activity must be approved by the Supervisory Board. Members of the Management and Supervisory Boards were not subject to any conflicts of interest, which must be disclosed to the Supervisory Board without delay.
Compensation report
The compensation paid to members of the Management and Supervisory Boards is detailed in the following section.
Compensation paid to members of the Management Board The compensation paid to members of the Management Board is thoroughly discussed in detail and then adopted by the Management Board Committee of the Supervisory Board. This compensation consists of a fixed element and a variable element, as well as nonmonetary compensation (company car, accident insurance). The variable element is basically contingent upon the group’s sales, operating profit or loss and after-tax income.
Manfred Bender has received a pension commitment in the amount of 20 % of his last fixed salary element. In addition, pension commitments have also been made to former members of the Management Board. The net pension expenses for the year attributable to former members of the Management Board was k € 20. In 2007 no pension expenses were recorded for Manfred Bender. A total contribution in the amount of k € 17 has been made to Pfeiffer Vacuum Trust e. V.
A total net advance payment to Pfeiffer Vacuum Trust e. V. in the amount of k € 142 exists for current and former members of the Management Board, of which k € 137 is predominantly attributable to former members of the Management Board. A total of k € 99 was disbursed as current pensions in 2007.
Compensation paid to members of the Supervisory The members of the Supervisory Board receive fixed compensation, which is stipulated by the Annual Shareholders Meeting.
The Statement of Income records compensation in the amount of k € 45 for the year 2007 for Dr. Michael Oltmanns, as the Chairman of the Supervisory Board, while Supervisory Board compensation in the amount of k € 30 was incurred for Götz Timmerbeil as the Vice Chairman. Expense of k € 15 each was recorded for the further members of the Supervisory Board, Michael Anderson, Helmut Bernhardt, Manfred Gath and Wilfried Glaum, for the fiscal year. The total expense for compensation paid to members of the Supervisory Board thus amounted to k 135 € (2006: k 141 €).
Negative statement No further payments in addition to the above-indicated compensation elements were paid to members of the Management or Supervisory Boards during the year covered by this report. In particular, no stock options were granted, no loan entitlements were established and no guaranty commitments were issued. Nor do any special agreements exist in connection with the termination of the activities of members of the Management or Supervisory Boards.
Transparency
Our corporate communications work strives to provide all target audiences with the same information at the same time. Private investors, too, can utilize the Internet to inform themselves on a timely basis about current developments within the corporate group. All ad-hoc corporate news releases issued by Pfeiffer Vacuum Technology AG are made available to its shareholders on the Company’s website. Pursuant to § 15a of the German Securities Trading Act (“Wertpapierhandelsgesetz”), the members of the Management and Supervisory Boards must disclose purchases and sales of Pfeiffer Vacuum shares. We publish this information on the Internet under “Investor Relations/Corporate Governance.”
Beginning in 2007, all publicly traded European corporations are mandated to present their consolidated financial statements on the basis of International Financial Reporting Standards (IFRS). With a view to assuring the most efficient possible means of disseminating information, the Management Board of Pfeiffer Vacuum had decided to change the Company’s accounting principles to IFRS for fiscal 2006, and thus one year earlier than required. This has and will continue to assure that the financial position of the Pfeiffer Vacuum Group will be able to be compared at any time with other (publicly traded) companies in Europe.
Since the u.s. Securities and Exchange Commission (SEC) now also accepts financial statements presented in IFRS, without any further reconciliation to u.s. Generally Accepted Accounting Principles (u.s. GAAP), the delisting and the termination of reporting obligations under the u.s. Securities Exchange Act (deregistration) do not pose any obstacle to a high level of transparency. Trading on the nyse was ended on October 4, 2007. The main reason for this decision consisted of the low trading volumes on the nyse. In addition, the high costs of the reporting obligations in connection with the listing were another key consideration in this move.
Accounting and auditing
Shareholders and other interested parties are informed about the Company’s position through its Annual Report and Quarterly Reports. All reports are simultaneously made available to interested parties in the German and English languages on our Internet website. In addition, all press releases and ad-hoc corporate news releases are also published on the Internet site.
It was agreed with the independent auditor that the Chairman of the Audit Committee will be informed without delay with respect to any grounds for exclusion or prejudice which may arise during the course of the audit should they fail to be eliminated without delay. The independent auditor is tasked with also reporting without delay any and all observations and events that are material to the responsibilities of the Supervisory Board which may be determined in connection with the audit of the financial statements. Moreover, the independent auditor must also inform the Supervisory Board and/or include a notation in the audit report should he or she identify facts in connection with the audit of the financial statements that cannot be reconciled with the Statement of Compliance submitted by the Management and Supervisory Boards pursuant to § 161 of the German Stock Corporation Act (“AktG”).