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Metro Group : annual report 2010 : BuSineSS → CoRPoRate GoVeRnanCe RePoRt tracts, care shall be taken to ensure that payments made to a member of the management Board on premature termination of his contract without serious cause do not exceed the value of two years’ termination, including ancillary benefits (severance payment cap), and compensate no more than the remaining term of the contract. Provisions of this kind were not included in the new employment contract with mr Joël saveuse in 2010. the reason for this is the relatively short term of office and the corresponding short term of the contract. By resolution of the supervisory Board of 5 may 2010, mr saveuse was appointed as a member of the management Board for a period of approximately another two years. like the appointment, the employment contract to be concluded will expire in april 2013. the short term of the contract term provides sufficient protection to the Company from inappropriate severance payments; therefore, the supervisory Board does not regard it as necessary to insist on the inclusion of a severance payment cap in the contract as defined in the Code.” the may 2010 declaration pursuant to § 161 of the German stock Corporation act was issued against the backdrop of a decision by the supervisory Board that was related to an individual case. in a regular meeting in december 2010 – that is without special cause – the management Board and the supervisory Board of metRo aG discussed the implementation of the Code’s recommendations. the organs issued a declaration of compliance pursuant to § 161 of the German stock Corporation act and reiterated once again that in one case in may 2010 a provision on a severance payment cap was not included in an employment contract. Furthermore, the declaration revealed that a new recommendation of the German Corporate Governance Code that came into force in July 2010 had been adopted by the supervisory Board in october and that the management Board and the supervisory Board do not intend to deviate from the Code’s recommendations in future: “the management Board and the supervisory Board of metRo aG declare that the recommendations of the Government Commission on the German Corporate Governance Code published by the Federal ministry of Justice in the official section of the electronic Federal Gazette in the re spec t- → p. 060 ive applicable version have been complied with during the last twelve months and, in particular, since the issue of the last declaration of compliance on 5 may 2010, barring the following exceptions: 1. severance payment cap on 5 may 2010, the supervisory Board of metRo aG decided to deviate in one case from the recommendations in subsection 4.2.3, Paragraph 4 of the German Corporate Governance Code. according to these recommendations, in concluding management Board contracts, care shall be taken to ensure that payments made to a member of the management Board on premature termination of his contract without serious cause do not exceed the value of two years’ termination, including ancillary benefits (severance payment cap), and compensate no more than the remaining term of the contract. Provisions of this kind were not included in the new employment contract with mr Joël saveuse in 2010. the reason for this is the relatively short term of office and the corresponding short term of the contract. By resolution of the supervisory Board of 5 may 2010, mr saveuse was appointed as a member of the management Board for a period of approximately another two years. like the appointment, the newly concluded employment contract will expire in april 2013. the short term of the contract term provides sufficient protection to the Company from inappropriate severance payments; therefore, the supervisory Board did not regard it as necessary to insist on the inclusion of a severance payment cap in the contract as defined in the Code. 2. objectives regarding the composition of the supervisory Board the new recommendation of the Government Commission on the German Corporate Governance Code, whereby the supervisory Board is supposed to formulate concrete objectives regarding its composition (subsection 5.4.1 of the Code), was published in the electronic Federal Gazette on 2 July 2010. the implementation of the recommendation required an initial consultation by a committee; thereupon, the plenary supervisory Board made a resolution regarding the formulation of objectives in october 2010. as a result of this chrono-
Metro Group : annual report 2010 : BuSineSS → CoRPoRate GoVeRnanCe RePoRt logical sequence, the new recommendation was not formally complied with during the period from 2 July 2010 to 27 october 2010. the management Board and the supervisory Board intend to comply with the recommendations of the Government Commission in its version of 26 may 2010 without exception in future.” Both declarations of compliance issued in the reporting year have been made permanently accessible to shareholders on the website www.metrogroup.de. Suggestions of the German Corporate Governance Code the declarations of compliance issued by the management Board and the supervisory Board of metRo aG, in accordance with the law, are directed only at the recommendations of the German Corporate Governance Code. in addition to the recommendations, the Code contains suggestions that a company can, but does not have to address. metRo aG follows the vast majority of suggestions laid down in the German Corporate Governance Code. in the financial year 2010, there were only two points that were not fully implemented: 1. subsection 2.3.4 of the Code calls for enabling shareholders to follow the annual General meeting via modern communication media such as the internet. as in previous years, metRo aG broadcast only the speech by the Chairman of the management Board in the financial year 2010. Further proceedings from the annual General meeting were not broadcast over the internet. this practice will be continued in 2011. 2. subsection 3.6 of the Code applies to co-determined supervisory boards. it calls for representatives of shareholders and employees to separately prepare supervisory board meetings and, if necessary, with members of the management board. members of metRo aG’s supervisory Board hold joint preparatory meetings. However, this is done as needed and not before every supervisory Board meeting. Corporate management practices → p. 061 the German Corporate Governance Code emphasises the management and supervisory Boards’ obligation to ensure the Company’s continued existence and sustainable value creation in accordance with the principles of the social market economy. in the exercise of this responsibility, the management Board of metRo aG has gone beyond legal requirements and developed and established guidelines and standards within the Company. the issues of compliance, risk management and sustainability are of particular importance to metRo GRoUP’s sustained value creation. Compliance: organisation and content further developed Within the framework of the efficiency and value-enhancing programme shape 2012 that was launched in 2009, metRo GRoUP is centralising business areas that are key to the Group’s financial management and supervision. since the beginning, compliance has been one of these. a Groupwide compliance organisation has been established. during this process, the content of metRo GRoUP’s compliance programme was further organised and developed. this has taken place not only with a view to metRo GRoUP’s international character and complexity. in addition, the increasing regulatory requirements affecting metRo aG as the listed holding company of metRo GRoUP have been addressed. metRo GRoUP’s compliance system aims to sustainably prevent regulatory infringements within the Company or least hinder such infringements. in organisational terms, this results in a clear delineation vis-à-vis the internal audit department. metRo GRoUP primarily prevents risks by systematically identifying behavioural risks, establishing the necessary organisational structures and rigorously monitoring and controlling these risks through the responsible metRo GRoUP divisions. in organisational terms, the responsible management teams and all employees at the management companies of metRo GRoUP’s sales divisions and all national subsidiaries can draw on the support and advice of Compliance officers. the Chief Compliance officer reports directly to the Chairman of the management Board of metRo aG, dr eckhard Cordes.
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