The engine manufacturer Deutz surprisingly exchanges its CEO.

Frank Hiller will be recalled with immediate effect, the Cologne S-Dax company announced on Saturday evening.

The board of directors decided unanimously.

There is no further word of farewell to Hiller in the engine manufacturer's statement.

Jonas Jansen

Business correspondent in Düsseldorf.

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CFO Sebastian C. Schulte will take his place. The 43-year-old manager only joined the company last spring, which was founded in 1864 and primarily builds diesel engines for construction machinery, tractors and boats.

Schulte used to be part of the Germany Eight and competed at the Olympics, now he's taking over the helm at Deutz.

Previously, there had been speculation as to whether the chairman of the supervisory board, Bernd Bohr, would have to give up his position.

However, the former automotive board member at Bosch is only retiring from the post of chairman of the supervisory board, and the former Audi board member Dietmar Voggenreiter is taking his place.

A dispute had broken out between the board of directors and the supervisory board over the past few weeks about how to deal with the Second Management Positions Act, FüPoG II for short, which came into force last summer.

This stipulates that listed and co-determined companies with more than three board members must appoint a woman to the board at the earliest opportunity.

Deutz has four board members, all of whom are men.

Two of them, along with Schulte and Markus Müller, board member for development, have not even been on board for a year.

Four men, no woman

The fact that these same men were appointed to the top of the engine manufacturer, whose around 4,500 employees are traditionally predominantly male because of the products they manufacture, had caused some internal discussion.

Simply increasing the board of directors with a woman does not go down well in a company with around 1.6 billion euros in sales, especially since there was only a major austerity round in 2020, during which around 1000 jobs were cut.

"The supervisory board has also decided to appoint a woman to the board of directors again," the company said in a statement on Saturday evening.

A corresponding process has already been set up.

Until then, Schulte will assume the duties of CFO on an interim basis.

Bohr, 65 years old and at the top of the controller since 2019, was previously counted out by some media.

Apparently, however, the relationship of trust in the company was also shattered beyond the dispute about the missing woman on the board.

Bohr has now prevailed, although he has given up 40,000 euros by stepping into the second rank, which is the basic remuneration for supervisory board members at the engine manufacturer, the chairman gets double that.

But he stays on board, unlike the 55-year-old Hiller.

How much will the severance pay be?

His contract was only extended by the Supervisory Board for a further five years until 2026 at the beginning of 2021.

It is still unclear how much severance pay the ousted CEO is entitled to upon his departure.

Of course, the new compensation system, which was approved by the shareholders at the 2021 Annual General Meeting, also contains malus and clawback rules that allow the Supervisory Board to withhold bonuses in the event of "serious violations to be detailed by the company", such as contractual obligations.

However, this is likely to be difficult to enforce, even if the engine manufacturer's meeting between the supervisory board and the board of directors on Saturday was said to be heated up according to information from the FAZ.

The normal case is the "termination without notice for good cause", according to § 626 BGB, whereby there is normally the remaining remuneration as severance pay.

At Deutz, however, a limit of two years has been set.

According to the remuneration report, the maximum remuneration for the CEO is 2.8 million euros per year.

However, more than half of the remuneration does not consist of the basic salary, but of performance-based factors such as the development of sales and earnings and the sustainability goals achieved.