Amid an ongoing debate on the topic, Germany's conservative Christian Democrats have joined with their Social Democratic coalition partners to propose a mechanism to cap the escalating pay for top managers.
Conservatives have joined the outcry over pay disparities
“An essential part of the social market economy is that pay must represent the true value of performance,” wrote CDU financial expert Otto Bernhardt in a position paper cited by German business newspaper Handelsblatt.
The debate comes in the wake of an uproar over the paycheck of Porsche CEO Wendelin Wiedeking. In the past fiscal year the head of the luxury carmaker took home some 60 million euros ($93 million) – more than a thousand times the average salary of an auto industry worker. According to recent reports, Wiedeking could take home 100 million euros for the current fiscal year.
Decrying "blatant disparities"
The SPD laid out its own proposals several weeks ago, but the CDU is now setting forth its own ideas on how to limit manager pay. According to the CDU plan, the complete supervisory board should get decision-making powers over individual pay in a manager's contract. Moreover, executives would have a longer waiting period before they could exercise stock options.
Porsche's Wiedeking: 100 million things to smile about
According to Handelsblatt, the CDU is joining the SPD in trying to ratchet back the increases in German managers' pay, which it considers to be excessive.
"Blatant disparities and overly-high remuneration, despite apparent poor performance, should not be excused with references to the power of the free market,” the paper said. The CDU also wanted its proposals to apply to state-dominated institutions.
Porsche CEO gets more
The news of Wiedeking's coming windfall set off yet another debate among German politicians. Left party leader Oskar Lafontaine accused the governing grand coalition of being “incapable of putting an end to managers' brazen self-serving.”
"It's much too intertwined with the top managers,” Lafontaine told the Berliner Zeitung on Tuesday, July 29 .