Prosecution Appeals Mannesmann Verdict
July 23, 2004
Prosecutors have taken the appeal to the Federal Court of Justice, the country's highest criminal court, a spokeswoman said on Friday. They had called for prison terms for several of the defendants, including Deutsche Bank CEO Josef Ackermann, who had been accused of approving unreasonable severance packages for Mannesmann top executives as a member of the company's board of trustees.
On Thursday, Düsseldorf District Court Judge Brigitte Koppenhöfer had ruled that the defendants, which also included former Mannesmann CEO Klaus Esser and the former head of German trade union IG Metall, Klaus Zwickel, were not quilty of the charges.
The Mannesmann board had approved 111.5 million deutsche marks ($71 million) in bonuses to management board members during the multi-billion-euro takeover of Mannesmann by British mobile phone giant Vodafone in 2000. Esser alone got more than €15 million.
Calls for more transparency
The verdict also provoked German politicians to consider changes in the law to prevent similar cases in the future.
Members of the neoliberal Free Democratic Party (FDP) called for more transparency in Germany's stock corporation and criminal law.
"The spongy criteria of what constitutes a breach of trust have to be defined more clearly," Rainer Funke, the party's legal expert in parliament, told the Berliner Zeitung newspaper. He added that the law should also clarify what constitutes an "adequate compensation" for top executives.
But German Justice Minister Brigitte Zypries (photo) said she didn't support proposals to establish legal limits for top salaries.
"The constitution prohibits us from determining what people can earn in private business," she said in an interview with German public radio broadcaster Deutschlandfunk. "I also wouldn't write into law how much a skilled worker can earn."
But Zypries agreed that a need for more transparency existed. One possibility to deal with the issue could be a voluntary requirement for companies to link salaries to the overall wage development at the firm.
Strengthening shareholders' rights
The Social Democratic (SPD) minister also said she planned on strengthening shareholders' rights to sue companies.
"Our goal is to allow a minority of shareholders to take the company to court to assert their claims," she said. "If top executives get too much money, shareholders can say, 'This is money that the company will lose,'" reducing profits and dividends as a result.
The non-guilty verdict had provoked several politicians to express their outrage over manager compensations.
"Just because it obviously cannot be avenged in court, the self-service at Mannesmann still cannot be morally justified and is simply obscene," said Wolfgang Thierse (SPD), the president of the German parliament.