Corporate Governance

Generali Deutschland Holding is committed to a good and responsible Corporate Governance. The essential elements of the German Corporate Governance Code are implemented by Generali Deutschland Holding. Generali Deutschland Holding complies with the rules of the Ethical Code of the international Generali Group referring to correctness, honesty, impartiality and professionalism.

In compliance with section 3.10 of the German Corporate Governance Code, the Board of Management and the Supervisory Board report every year about the reliable and efficient governance of the company, including its organization, business philosophy and guiding principles as well as the internal and external mechanisms of controlling and monitoring.

Generali Deutschland Holding is listed in the prime standard segment of Deutsche Börse. The prime standard represents the highest degree of transparency for companies listed on the stock exchange and goes beyond the minimum legal requirements of the official market and the regulated market.

To safeguard this high standard, Corporate Governance is also under the continuous scrutiny of the Supervisory Board. Pursuant to the Articles of Association and the internal rules of the company's bodies, important transactions have to be approved by the Supervisory Board. The Supervisory Board's monitoring activities are described in detail in the report by the Supervisory Board to the General Meeting (see p. 12 ff. of the Group Report 2009). in compliance with section 171 of the German Companies Act (AktG).

Corporate Governance is ensured by additional organization measures, such as keeping a list of persons having insider information, the Group's compliance system, the Group-wide Ethical Code as well as the pertinent Codes of Conduct of the Group companies.

Material information on our Corporate Governance is provided to our shareholders on the Internet at www.generali-deutschland.de in the “Investor Relations” section. This information includes the financial calendar, annual and interim reports, ad-hoc announcements, the corporate governance statement in compliance with section 289a HGB, information about directors' dealings and the latest and previous versions of the declaration of compliance of Generali Deutschland and of the German Corporate Governance Code.

In line with their statutory obligation defined in section 161 AktG, the Board of Management and the Supervisory Board publish an annual declaration stating to what extent Generali Deutschland complies with the recommendations of the German Corporate Governance Code. That declaration of compliance was last renewed on November 24, 2009.

Statement in respect of deviations from the recommendations of the German Corporate Governance Code

Generali Deutschland complies with most of the recommendations and suggestions of the Corporate Governance Code. To the extent the declaration of compliance indicates deviations from the Code's recommendations, Generali Deutschland follows the applicable legal standards. The deviations refer to the following recommendations:

The notification documents convening a General Meeting are not sent by electronic means (deviation from section 2.3.2 of the Code). Generali Deutschland regularly publishes the documents convening a General Meeting on its website and makes them available to shareholders and other interested persons for download. Considering the consequences of not duly convening a General Meeting, however, the Board of Management and the Supervisory Board are of the opinion that the risks involved in generally sending these documents by electronic means are too big.

The D&O insurance taken out by the company for the Supervisory Board does not have a deductible (deviation from section 3.8 of the Code). Considering the responsibility and motivation of the members of the Supervisory Board in performing their tasks, Generali Deutschland is of the opinion that a deductible is not necessary.

Generali Deutschland does not have a stock-option plan of its own (deviation from sections 4.2.3 and 7.1.3 of the Code). The remuneration of the Board of Management is composed of an element not related to performance and a performance-related element. Furthermore a stock-option plan of the international Generali Group exists for selected executives of the Group. The plan is described on 189 of the Group Report 2009. The granting of the options is subject to the achievement of the targets of the Italian plan and also to the mandatory achievement of a target exclusively referring to the performance of the German Group. Generali Deutschland does not consider a stock-option plan of its own to be necessary in addition to these remuneration elements.

The total remuneration of the members of the Board of Management is not disclosed on an individualized basis in the Notes to the Consolidated Financial Statements (deviation from sections 4.2.4 and 4.2.5 of the Code). Besides, the Ordinary General Meeting of May 18, 2006 resolved in compliance with section 314 para. 2 sent. 2 HGB not to publish the information to be provided in compliance with section 314 para. 1 no. 6 letter a) sent. 5-9 HGB on the remuneration of the Board of Management. For privacy reasons, the company does not provide detailed figures and instead refers to the collective figures disclosed in the Group Report 2009 (see details below and the information provided on p. 192 f.), on the Internet and in the General Meeting. The structure of the remuneration with its performance-related elements and elements not related to performance is also explained in these information sources.

Neither is there an individualized disclosure of the remuneration of the members of the Supervisory Board or of the payments made to them on the basis of other business relationships with the company or with Group companies (deviation from section 5.4.6 of the Code). The structure of the remuneration of the Supervisory Board is disclosed in the Articles of Association and in the Group Report 2009 (see details below and the information on p. 192 f.). The collective amount paid as remuneration is also indicated in the Group Report 2009 (see p. 192 f.).

Generali Deutschland does not have a nomination committee, exclusively composed of shareholder representatives, which proposes suitable candidates to the Supervisory Board for recommendation to the General Meeting (deviation from section 5.3.3 of the Code). Since the shareholder representatives in Generali Deutschland's Supervisory Board closely communicate with each other in any case, establishing such a committee appears to be unnecessary.

There is no age limit for members of the Supervisory Board (deviation from section 5.4.1 of the Code). The members of the Supervisory Board of Generali Deutschland are elected because of their qualification and experience. The company wishes to appoint highly qualified and experienced members to the Supervisory Board, regardless of age limits.

There is no limitation, beyond the limitation provided for by law, of the number of mandates held in the Supervisory Boards of listed non-Group companies (deviation from section 5.4.5 of the Code). It often is useful when members of the Supervisory Board can bring in their experience from non-Group companies. For the time being, Generali Deutschland regards the statutory provision under section 100 para. 2 of the Companies Act as being sufficient.

The Report by the Supervisory Board does not provide information about the attendance at meetings of the Supervisory Board (deviation from section 5.4.7 of the Code). Until today the efficiency of the Supervisory Board's activities has not been affected by the non-attendance of members. Therefore the disclosure of such information is not regarded as necessary.

Basic structure of the remuneration of members of the Board of Management and of the Supervisory Board

The following statements on the remuneration of the Board of Management and the Supervisory Board are also an integrated part of the Management Report.

Remuneration of the Board of Management

In the business year 2009 numerous amendments were introduced by legislation and by the regulatory authorities with regard to the remuneration of the members of the Board of Management. As a listed enterprise and reinsurance company, Generali Deutschland Holding AG comes under the full scope of application in particular of the Act on the Adequacy of the Remuneration of Members of the Board of Management (VorstAG) of August 5, 2009. In addition, the company is also subject to the regulatory rules which were last amended by means of the circular letter R 23/2009 on the requirements regarding remuneration systems in the insurance field from the Federal Regulatory Office for Financial Services (BaFin) of December 21, 2009.

The Supervisory Board has intensively dealt with the new legal provisions and amended its internal rules by determining that resolutions on the remuneration of the members of the Board of Management are now be taken by the full Supervisory Board and that the Committee for Matters of the Managing Board only has a preparatory function. In the only case since the coming into force of the VorstAG where an employment contract with a member of the Board of Management had to be revised, the objectives of this Act were already fully taken into account. With the aim to provide further long-term incentives of conduct in addition to the targets which as a whole had already been oriented at a sustainable corporate development, the possibility was introduced, in particular, to pay out part of the variable remuneration with a time delay on the basis of a multi-year assessment. Previously the employment contracts had provided for the payment of the variable remuneration immediately in the subsequent year. The existing employment contracts will also be amended accordingly at their forthcoming renewals.

When defining new targets regarding the variable remuneration of the members of the Board of Management the new rules will, of course, be respected. The targets for the year 2009, however, had already been agreed as binding when the VorstAG came into force and therefore an adjustment of these targets was not possible.

For the business year 2009, the remuneration of the members of the Board of Management of Generali Deutschland is thus, as a matter of principle, composed of two elements, i.e. a fixed annual salary and an annual performance bonus. The fixed annual salary also includes remuneration in kind and perquisites, such as the use of a company car and the payment of telecommunication costs by the company.

The performance bonus is based on targets which are newly defined every year. 80 percent of these targets are operating targets of the Generali Deutschland Group and 20 percent are other individually defined performance yardsticks. The performance bonus determined in advance becomes payable on the basis of a target-achievement ratio determined by the Supervisory Board after the close of the business year.

Assuming that the present members of the Board of Management of Generali Deutschland reach all their performance targets, the various remuneration elements would represent the following shares of their remuneration for the business year 2009:

  • Fixed annual salary: about 38 percent
  • Add. fixed amount: about 18 percent
    (without pension entitlement)
  • Performance bonus: about 44 percent

Beyond this – and as already explained above – Generali Deutschland does not have a share-based remuneration plan of its own. Instead, the Board of Management and selected executives of Generali Deutschland are included in the stock-option plan of the international Generali Group. The requirement for granting the options is not only the achievement of targets of the international Generali Group but, in addition, that a target exclusively referring to the success of the Generali Deutschland Group has to be reached.

Upon retirement, the members of the Board of Management of Generali Deutschland are entitled to receive life-long retirement pay. The amount of the annual retirement pay corresponds to a specific percentage of the basic annual salary. For every completed year of service until retirement the amount increases up to a maximum limit. As a general rule, any additional income from self-employed and employed activities has to be set off against the retirement income. Upon death, any surviving spouse and dependants are entitled to receive a certain percentage of the retirement pay of the member of the Board of Management.

More details on the stock-option plan and the individual remuneration elements are disclosed in the Notes on of the Group Report 2009 on p. 189 and 192 f. respectively.

Remuneration of the Supervisory Board

Similar to the remuneration of the Board of Management, the remuneration for the members of the Supervisory Board is composed of fixed and variable elements. On the one hand, the members of the Supervisory Board receive a fixed annual remuneration of € 5,000 in addition to compensation for their cash outlay. The Chairman of the Supervisory Board receives twice that sum, the Deputy Chairman one and a half times that amount. As a performance-related remuneration element, the Articles of Association provide for the following: each member of the Supervisory Board receives every year an amount of € 1,000 for each percentage of dividend distributed to the shareholders exceeding 4 percent of the share capital, the maximum limit however being a dividend of 34 percent. The Chairman of the Supervisory Board receives twice that sum, the Deputy Chairman one and a half times that amount.

As resolved at the General Meeting of May 19, 2009, the members of the committees of the Supervisory Board receive, for each committee membership, an annual remuneration in addition to the remuneration indicated above amounting to half the above-mentioned fixed and variable remuneration. The Chairman of the committee concerned receives twice that amount, the Deputy Chairman one and a half times that sum. Previously, the reference for the remuneration of committee members had been the total fixed remuneration of a member of the Supervisory Board.

The information on the structure of the remuneration of the Supervisory Board is disclosed in the Articles of Association. Information on the amounts of the remuneration paid to the Supervisory Board is indicated in the Notes of the Group Report 2009 on p. 192 f.

Directors' Dealings

In the business year 2009 there were no security transactions which would have to be declared in compliance with section 15a para. 1 sent. 5 of the Securities Trading Act (WpHG) or section 6.6 of the German Corporate Governance Code.

Compliance system

The companies of the Generali Deutschland Group conduct their business activities in a responsible manner and in compliance with legal provisions. A sustainable compliance in the Generali Deutschland Group creates trust on the part of the capital market and customers. Therefore the Board of Management of Generali Deutschland maintains binding compliance programmes for all companies of the Generali Deutschland Group. These guidelines support employees in their task of fulfilling increasingly demanding legal requirements.

For that purpose, the Generali Deutschland Group has adopted the Ethical Code of the international Generali Group. With the Ethical Code, the Generali Deutschland Group gives itself a general guideline for its relationships with customers, shareholders, employees, contractual partners as well as public institutions and the press. In this context, the Ethical Code is committed to essential principles such as correctness, honesty, impartiality and professionalism.

The framework provided by the Ethical Code is defined in more detail by the Code of Conduct of Generali Deutschland. The Code of Conduct comprises specific rules of conduct for the employees, in particular with regard to issues such as confidentiality, accepting and giving gifts or other grants, contract assignment, business transactions with employees, the four-eye principle and conflicts of interest. This strengthens the trust of customers, partners, employees and the general public in a fair and ethical conduct of the company and of all employees.

To implement these rules of conduct, regular training is provided across the Group. In addition, so-called compliance officers have been appointed in all major Group companies. They are the contacts in all compliance issues and report regularly to the responsible management bodies. Beyond this, the Group companies have appointed two external lawyers as ombuds-persons, which the employees can contact regarding suspected infringements of compliance rules and who will keep the identity of the persons providing the information as strictly confidential.

In addition to these general rules of conduct, a Group-wide programme has been established to provide for the observance of anti-trust rules by indicating precise guidelines for all employees of the Generali Deutschland Group. On the basis of a Group-wide network of compliance officers and by regular training courses for employees in sensitive areas it is ensured that the guidelines are implemented equally across the Group and that infringements of anti-trust law are avoided. Furthermore the Board of Management of Generali Deutschland, in cooperation with the compliance officer, makes certain that the rules of the Securities Trading Act are observed in the Generali Deutschland Group by distributing state-of-the-art guidelines for security compliance across the Group.

Generali Group