ABSTRACT
In Germany, the topic of compensation and associated benefits and perquisites has traditionally been regarded as a confidential personnel issue. This was particularly the case for senior management and top executive compensation packages. Over the past 15 years, this has changed at an increasing rate. The reasons for this include not only the further internationalization of German companies, but also, more importantly, the changes to the German market itself. The consensus within the German economy continues to be that success depends on a prosperous and expanding world economy ( Jacobi et al., 1998, p. 193). Developments relating to the creation of the Single European Market and European integration in a wider sense have resulted in a concentration of capital in which German companies have been instrumental. Take-overs, mergers and the creation of multinational corporations in Germany (e.g. DaimlerChrysler, Deutsche Bank, Allianz, Deutsche Telekom, Deutsche Post, to name just a few) have created even larger, globally active interlinked companies. The global reach of such companies is also seen, for example, through their ambition to be listed on the New York Stock Exchange. In addition, the traditional backbone of the German economy, the ‘Mittelstand’, with some 3 million enterprises, has expanded 103internationally. 1 This greater interaction beyond the national boundaries has resulted in fiercer exposure to market and capital competition. This has directly fuelled corporate governance discussions and developments for corporations both in Germany and abroad. In addition, overall shareholder expectations from the globally active institutional investor community have been influential in a change towards greater transparency.
