DAX30 companies amass €2bn pension reserves for former directors
GERMANY - Former directors cost DAX30 companies an average of €7m in pension reserve payments annually, figures from the Hans-Böckler-Stiftung have shown.
The foundation, closely allied with the country's labour union umbrella group (DGB), also estimated that companies such as Commerzbank, Allianz and Deutsche Bank had already accumulated an average of €67m in pension reserves, meaning total reserves came to approximately €2bn last year.
Industrial giant ThyssenKrupp and Deutsche Bank were at the top of the survey, making pension reserve payments of €24.4m and €19.8m, respectively, in 2009.
Additionally, both companies had already put aside more than €170m to pay to former board members during their retirement.
Overall, eight companies had accumulated more than €100m in reserves, with car maker Daimler having more than €190m.
Despite reforms in Germany to increase the retirement age to 67, half of the companies allowed board members to draw their pension from 60, with only 25% enforcing the 65 retirement limit.
However, Heinz Evers, who was responsible for compiling the data, pointed out that even board members were feeling the pressure of an aging population.
He said performance-related pension promises, seen as unreasonably high, were being "driven back down to a normal rate".
Evers added that, given the size already reached for board members' pension payments, it was sensible that renumeration committees increasingly ask "the fundamental question of the entitlement and reasoning" behind such large pay deals.