Zalando is introducing an upper limit for the remuneration of its board members.
At the general meeting on Wednesday, the shareholders of the fashion trading platform voted for a new remuneration system for the board members, which provides for a maximum remuneration of 15.75 million euros for the CEOs and 10.5 million euros for board members for all new contracts per financial year.
Bastian Benrath
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This includes both the fixed salary and variable remuneration components such as stock options and all bonuses - the calculation is based on the inflow calculation provided for in the German Corporate Governance Code, as a Zalando spokesman for the FAZ said.
This means that remuneration such as the 53.3 million euros that Rubin Ritter, co-chairman of the board of directors, who retired at the Annual General Meeting, received last year will no longer be possible in the future.
However, existing contracts remain unaffected by the new regulation.
This means that the two remaining co-CEOs David Schneider and Robert Gentz can get even more money this year, mainly through stock options.
They will only be subject to the upper limit once their contracts, which currently run until 2023, are renegotiated.
As the first new board member, the recently appointed HR manager Astrid Arndt is subject to the cap, which for her is 10.5 million euros.
Top earnings only at your own risk
Zalando points out that the maximum remuneration can only be achieved if the board members themselves are very risk-oriented and choose a high proportion of stock options instead of shares when structuring their performance-related remuneration. You determine the ratio of your own choice.
In addition, the value of the goods sold via the Zalando platform (the gross volume of goods or GMV) must be well above the company forecast, the share price must continue to rise significantly and agreed social and ecological goals (ESG) must be achieved.
When setting the upper limit, the company continued to say that the salaries of comparable companies in Dax and M-Dax were customary in the market.
In addition, the height should support the "founding mindset", so to speak, the founder mentality of the board members.
Nevertheless, Zalando cuts off a large part of their previously possible remuneration for its Management Board members - because Schneider and Gentz also received remuneration of around 40.5 million euros each last year, given the company's very good economic development.
The reason is a change in the law
The reason for the upper limit is a new law, the so-called ARUG II. With it, Germany implemented the EU Shareholder Rights Directive into national law.
It stipulates that supervisory boards of large companies must set an upper limit for executive board salaries in the future, which they can choose freely.
As a result, Zalando was obliged to introduce a lid, but could have raised it.
The shareholders have also been given the right to reduce the maximum remuneration that a Management Board receives under the new system.
Such a downgrading vote at the Annual General Meeting is binding, and there has been a long struggle about it.
As expected, Zalando's general meeting also elected the CEO of the delivery company Delivery Hero, Niklas Östberg, to the supervisory board.
Cristina Stenbeck, the former head of the Swedish investor Kinnevik, was confirmed as chairman of the supervisory board.
This was one of Zalando's big donors from an early age.
In February, however, Kinnevik announced that it would sever the connection and distribute the stake to its shareholders.
On his farewell, his colleagues in the former top trio also paid tribute to the outgoing CEO Ritter.
“The IPO was really your work,” said Schneider.
Gentz added that Ritter would remain "one of the most-called people" after his departure.
Ritter himself said that he was now looking forward to "what life outside of Zalando has to offer".