Annual Report 2009/10 Excellence in Retailing - Douglas Holding

All five retailing divisions combine this lifestyle philosophy and implement the mutual
corporate objectives: quality and service leadership, sustained value-oriented growth
and securing a leading market position – even in countries where the DOUGLAS Group
has not yet achieved a key market position.
To secure further value-oriented growth, each and every planned investment is examined
to determine whether it contributes to the sustained increase of the business value.
Added value is then created, when a return is generated that is above the costs of capital.
Corporate management and controls
The responsibility for the DOUGLAS Group’s management underlies three members of
the Executive Board of DOUGLAS HOLDING AG as well as three division directors, who
are responsible for the operating subsidiaries. The Executive Board reports regularly to
the Supervisory Board, which is composed of an equal number of representatives of the
shareholders and employees for a total of 16 members.
The remuneration of the Executive Board is resolved by the Supervisory Board and the
remuneration of the Supervisory Board is determined by the Annual Shareholders’ Meeting.
Such remuneration contains a fixed as well as a variable, performance-based component.
The variable remuneration component of all Executive Board members (except for
the Human Resources Director) is oriented on the DOUGLAS Group’s earnings from normal
business activities – less a ten percent virtual return on shareholders’ Group equity.
Fifty percent of the variable component for the Human Resources Director depends on the
earnings from normal business activities and the other 50 percent on individually agreed
target arrangements. The remuneration structure is aligned towards a sustainable business
performance. The variable remuneration components are not based on the earnings
of the fiscal year, but are weighted by the earnings over the past three fiscal years. And
the variable component is limited, because it cannot exceed a clearly defined percentage
rate of the base salary. The variable components for the Division Directors are determined
in a similar manner as the earnings of the individual divisions. There are no stock option
programs. Further details concerning the remuneration paid to the Executive and Supervisory
Boards can be found in the Corporate Governance report on pages 6 to 7 and in the
Notes accompanying the consolidated financial statements.
In the 2009/10 fiscal year, the Executive and Supervisory Boards of DOUGLAS HOLDING
AG again demonstrated full compliance with the recommendations and proposals of the
most recent version of the German Corporate Governance Code (DCGK) except for three exceptions.
The declaration of conformity pursuant to Section 161 of the German Stock Corporation
Law (AktG) has been published on the DOUGLAS HOLDING AG’s internet homepage.
Corporate controlling and strategies
As a retailer, it is very important to meet the needs of the customer and maintain a
close partnership with our suppliers. With its attractive specialty retail stores and online
shopping, the DOUGLAS Group offers modern and diverse shopping alternatives. This is
also held in high esteem by the industry, which is an important and reliable partner for
the DOUGLAS Group for the placement of products.
True to the principle of the DOUGLAS Group “as much decentralization as possible, as
much centralization as necessary”, decisions should be made as close to customers as pos-
Management Report
Key results
Business activities and operating environment
Net assets, financial position and result of operations
DOUGLAS HOLDING AG
Subsequent events
Control system and success factors
Opportunities and risks situation
Statutory disclosures
Forecast and overall assessment
6-7
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