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Business

Germany Obliges Executives to Reveal Pay

As one of the last major projects of the current administration under Chancellor Gerhard Schröder ahead of the likely general election in the fall, the Bundestag passed a law that will oblige the heads of around 1,000 listed companies to publish the exact amount of their annual salaries. The law, which has yet to get through the upper house of parliament, the Bundesrat, next week, was drawn up after top companies such as car makers, BMW, DaimlerChrysler and Porsche refused to make public the contents of their chief executives' pay-packets voluntarily. The draft law was approved by both the ruling Red-Green coalition of Social Democrat (SPD) and Green parties, as well as the opposition CDU and CSU Christian Union parties. The law is also expected to be approved by the majority of the Bundesrat. But the full effects are unlikely to be felt immediately, since companies will only be compelled to publish full details of their management salaries in their 2006 annual reports, which are published in spring of 2007. Executive pay will be published in full, including fixed and performance-related components. Companies that do not comply face fines of up to 50,000 euros ($60,500) per board member.

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