Daimler board extends Dieter Zetsche’s contract for five years

Article by Christian A., on February 8, 2013

Daimler’s CEO Dieter Zetsche's contract will be extended by the board for five years, giving him the opportunity to fulfil his goals. A source said that on Feb. 21, Daimler's supervisory board will meet. On this day, they’re likely to extend Zetsche's contract to the end of 2018. The 59-year-old Zetsche took the reins seven years ago.

He worked to unwind the empire-building strategy of Juergen Schrempp, his predecessor. In his next term of office, Zetsche will need to beat BMW, which sold 220,000 more units. Zetsche aims to get back the sales lead and increase profitability after having failed to do so twice before. Analysts predict that Daimler's fourth-quarter earnings will have fallen by 14%, compared to a 22% increase at BMW and a 15% increase at Volkswagen.

Max Warburton, an analyst at Bernstein Research in Singapore, said that Daimler didn’t achieve much in the past few years. He also said that it would have become bankrupt if it wasn’t pulled out of Chrysler before the government rescued it in 2009. When Zetsche became the head, the company was undergoing expansion under the direction of Schrempp.

Among the factors that had an impact on Mercedes include a botched merger with Chrysler, a failed rescue of Mitsubishi Motors Corp. and its role as the German government's voice at European Aeronautic Defence & Space Co. Zetsche has agreed to exit EADS last December so Zetsche can focus more on his targets.

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