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Linde AG follows the German Corporate Governance Code presented by the Government Commission on the German Corporate Governance Code and as amended from time to time. In March 2017, the Executive Board and Supervisory Board of Linde AG issued a declaration of compliance with the recommendations of the German Corporate Governance Code as amended on 5 May 2015 in accordance with § 161 of the German Stock Corporation Act (AktG) and made this declaration permanently available to the public on the Linde website.
Amendments to the German Corporate Governance Code were adopted on 7 February 2017. These amendments came into force upon their publication in the official section of the German Federal Gazette on 24 April 2017. The Executive Board and Supervisory Board of Linde AG studied the requirements of the German Corporate Governance Code as amended on 7 February 2017 in detail before issuing the following declaration of compliance in March 2018.
“The Executive Board and the Supervisory Board of Linde AG declare in accordance with § 161 of the German Stock Corporation Law:
All the recommendations of the ‘Government Commission on the German Corporate Governance Code’ as amended on 7 February 2017 have been complied with since publication of the last declaration of compliance and will be complied with in future – except for the following exception.
Clause 4.2.3 para 2 sentence 6
In accordance with clause 4.2.3 para 2 sentence 6 of the German Corporate Governance Code the Executive Board members’ remuneration in total and as to its variable components should be capped at a given maximum amount. Employment contracts with Executive Board members do not include a ceiling for the Executive Board members’ total remuneration; variable components are capped as is described below.
The components of the variable cash emoluments are limited in terms of amounts. The Long Term Incentive Plan which provides for remuneration in the form of options to purchase shares (performance shares) and bonus shares linked to personal investment (matching shares) has a cap in terms of amounts at the time of the granting of option rights and matching shares rights. However, the value of the performance shares and matching shares after a multi-year qualifying period is not limited in terms of amounts. An additional cap like that was not deemed appropriate. In such a case, the synchronisation of interests of shareholders and Executive Board members to be achieved by share-based remuneration would be disrupted, which in our opinion would not be in the shareholders’ interest.”
The current declaration of compliance and past declarations of compliance with the German Corporate Governance Code are available here.