Siemens 2008 Annual Report Download - page 209

Management’s discussion and analysis 113
Compensation Report
The Compensation Report outlines the principles used for determining the compensation of the Managing
Board of Siemens AG and sets out the level and structure of Managing Board remuneration. In addition, the
report describes the policies and levels of compensation paid to Supervisory Board members. The Compensation
Report is based on the recommendations and suggestions of the German Corporate Governance Code and com-
prises data that, in accordance with the requirements of the HGB, are a part of the MD&A pursuant to § 315 (2),
4 of the HGB. The Compensation Report is presented within the Corporate Governance Report, included in this
Annual Report for scal year 2008.
Outlook
Siemens’ focus in scal 2009 is advancing toward fulllment of our Fit42010 strategic program. This program
includes goals for business growth; income, protability and other nancial goals; leadership in corporate
responsibility; and expanding our portfolio of solutions for environmental and climate protection. These are
discussed in more detail below, along with our outlook for macroeconomic and industry development.
Macroeconomic development
According to estimates of Global Insight, Inc. released on November 14, 2008, global gross domestic product
(GDP) is expected to grow more slowly in 2009, at an estimated rate of 1.1% compared to an estimated 2.7% in
2008. We are closely monitoring the possibility that global GDP growth could slow even further in 2009, in par-
ticular due to unforeseen or uncertain effects of the global nancial crisis on the macroeconomic environment.
Industry development
A major driver of GDP growth is growth in gross xed investment. This measure is important because most of
our businesses provide customers with xed assets including infrastructure, industrial systems and equipment.
Based on estimates by Global Insight, Inc. as of October 29, 2008 global gross xed investment will grow more
slowly in 2009 compared to growth of 3.5% in 2008. Gross xed investment in emerging and developing coun-
tries is projected to continue growing more rapidly than in major industrialized economies, though we antici-
pate that such growth will slow in comparison to the double-digit expansion of recent years.
Viewing the above trends from an industry perspective, we anticipate that markets for consumer or close-to-con-
sumer products will see the most restrained demand, particularly in the U.S. and Germany. While some of our
Healthcare businesses are exposed to these markets, we believe their level of innovation and competitiveness is
high. Our far larger market for capital goods is expected to show less short-term effects from macroeconomic
developments. Also our industrial systems and infrastructure solutions market is less dependent on short-term
macroeconomic developments, but may face challenges by restrained demand in particular for projects, which
suffer from limitations to raise funds for nancing. The demand in emerging economies is expected to continue
to grow faster than global GDP overall. The industry development may benet from public programs, targeting
on growth of the global economy.