Siemens 2007 Annual Report Download - page 86

86 Corporate Governance Report
active on the other. Supervisory Board members have independent decision-making
authority and are legally prohibited from following the direction or instruction of
any affi liated party. Moreover, Supervisory Board members may not enter into
advisory, service or certain other contracts with Siemens, unless approved by the
Supervisory Board.
Committees
In contrast to the NYSE Standards, which require the creation of several specifi ed
board committees, composed of independent directors and operating pursuant to
written charters that set forth their tasks and responsibilities, the Supervisory Board
of Siemens AG has combined the functions of a nominating, compensation and cor-
porate governance committee substantially in the Chairman’s Committee and has
delegated the remaining functions to the Nominating Committee. Both the Audit
Committee and the Chairman’s Committee have written bylaws – adopted by the
Supervisory Board based on the NYSE Standards – addressing their respective pur-
poses and responsibilities.
The Audit Committee of Siemens AG is subject to the standards of the SOA and the
Securities Exchange Act of 1934, as applicable to a foreign private issuer, and per-
forms – in cooperation with the recently established Compliance Committee –
functions similar to those of an audit committee subject to the full NYSE Standards.
Nevertheless, German law precludes certain responsibilities from being delegated to
a committee, such as the selection of the independent auditors, who are required by
German law to be elected at the shareholders’ meeting.
In addition, the Supervisory Board of Siemens AG has an Ownership Rights Com-
mittee and a Mediation Committee, the latter of which is required by German law.
Neither of these two committees is required under the NYSE Standards.
Shareholder approval of equity compensation plans; stock repurchases
The NYSE Standards generally require U.S. domestic companies listed on the NYSE
to obtain shareholder approval of all equity compensation plans (including stock
option plans) and any material revisions to them. Similarly, our adoption of stock
option plans and any material revisions thereto require the approval by our share-
holders insofar as any issuance of shares and/or stock options under authorized or
contingent capital authorizations requires shareholder approval (which approval
requires consideration of the key elements of the applicable option plan or relevant
modifi cations). The 2001 Siemens Stock Option Plan, for example, under which no
further options can be issued after December 2006, was approved in 2001 by our
shareholders. Similarly, under German law, share buybacks generally require the
prior authorization by shareholders. Such approval was provided at our January 25,
2007 Annual Shareholders’ Meeting, and this matter will generally be voted upon
annually.