Daimler cut the compensation of CEO Dieter Zetsche despite record-breaking profit in 2011

Article by Christian Andrei, on February 23, 2012

Daimler posted a record-breaking profit in 2011 but nevertheless, it has cut the compensation of CEO Dieter Zetsche. In an annual report last Wednesday, Daimler’s remuneration for 2010 amounts to 8.69 million euros while in 2011, he got 8.65 million euros ($11.5 million), including fixed salary, bonuses and long-term stock options.

This information was taken from the annual report that Daimler released last Wednesday. The base salary of Zetsche increased from 1.53 million euros to 2.01 million euros. The compensation may rise if Daimler’s performance in the next few years improves. Daimler will receive a 2.04 million-euro bonus next year. Zetsche may get a lower or higher amount depending on how its stock performs compared to other automakers.

After four years, a 2.57 million-euro stock-option program will be disbursed according to how Daimler’s earnings and shares perform. In 2011, Daimler, the world's biggest maker of heavy-duty vehicles, posted a record net income of 6.03 billion euros in 2011 -- 29% higher than the previous year. In 2011, Mercedes-Benz cars reported sales of 1.26 million units, falling behind Audi with 1.3 million and BMW with 1.38 million in overall luxury-car sales.

With this result, Zetsche became confident that it will be able to take back the No. 1 spot from its two rivals. In February 2010, Daimler extended Zetsche's contract by three years. It is set to expire at the end of next year.

After Zetsche, the next highest-paid board member is Chief Financial Officer Bodo Uebber, who has a total compensation of 3.68 million euros, lower than the 3.69 million euros he received for 2010. The pay for the entire management board increased to 28 million euros in 2011 compared to the 25 million euros the previous year. The board was expanded to seven members in 2011 with the addition of Christine Hohmann-Dennhardt who supervises legal and compliance matters.

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