ThyssenKrupp board takes pay cut to appease shareholders | Business| Economy and finance news from a German perspective | DW | 18.01.2013
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ThyssenKrupp board takes pay cut to appease shareholders

ThyssenKrupp board members have said they will waive half of their salaries after massive losses at the German steel group in 2012. Managers are eager to salvage the firm's image in the face of a shareholder rebellion.

ThyssenKrupp's 20 board members had agreed to forego half of their pay for 2012, the German steelmaker's supervisory board chief Gerhard Cromme told shareholders at the firm's annual meeting on Friday.

"This gesture is intended as a sign of our dismay and our solidarity with you, our shareholders," he said, after announcing a record loss of 4.7 billion euros ($6.3 billion) for the business year, ended September 2012.

Shareholder frustration was running high at the general meeting in Bochum, Germany. The supervisory board had already announced in December that investors would not be paid a dividend as a result of the losses.

In 2012, ThyssenKrupp was forced to write down 5 billion euros on two new steel mills in Brazil and the United States on the back of massive cost overruns and falling global steel demand.

In addition, Germany's biggest steel conglomerate is embroiled in a series of scandals, including price-fixing in the rail track steel market as well as charges of corruption in several of its projects.

Path of renewal

On Friday, ThyssenKrupp Chief Executive Heinrich Hiesinger admitted the steelmaker's corporate culture had been marked by blind loyalty to old networks, which concealed major mistakes. He vowed to clear up all violations of compliance rules and to draw necessary consequences.

At the same time, Hiesinger outlined a change in corporate culture with clear rules to which everyone would have to conform if he or she wanted to continue working at ThyssenKrupp.

Regarding the steel group's performance, the CEO said restructuring ThyssenKrupp's business portfolio - away from steelmaking to more technology-based operations - would still last several years.

Existing steel activities must become more profitable, he said, adding that the group had no plans to shed more of its steel business after divesting its stainless steel division in 2012.

uhe/ipj (AFP, dapd, Reuters)