Siemens 2009 Annual Report Download - page 202

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 Reports Supervisory Board /
Managing Board  Corporate Governance  Management’s discussion and analysis  Consolidated Financial Statements
44 Business and operating environment 63 Fiscal 2009 – Financial summary 66 Results of operations 84 Financial position
Compensation report
The Compensation report outlines the principles used for de-
termining 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 poli-
cies and levels of compensation paid to Supervisory Board
members. The Compensation report is based on the recom-
mendations and suggestions of the German Corporate Gover-
nance Code and is in compliance with the applicable legal re-
quirements of §§ 314 (1) no. 6a and 315 (2) no. 4 of the HGB. As
an integral part of the Notes to Consolidated Financial State-
ments, the Compensation report is part of the audited Consoli-
dated Financial Statements. The Compensation report is pre-
sented within the section “Corporate Governance”, included in
this Annual Report for the fiscal year 2009.
Report on expected developments
WORLDWIDE ECONOMY
The global economy showed first signs of recovery in the sec-
ond half of 2009 following the most serious recession since
the Second World War. IHS Global Insight anticipates that
global gross domestic product in real terms, which is expected
to fall by 2.1% in 2009 as a whole, will increase by 2.6% in 2010
and by 3.3% in 2011. The speed and strength of the recovery are
expected to vary widely from region to region, however, with
forecasts predicting GDP growth of 5.2% in 2010 and 5.1% in
2011 in real terms for the Asia, Australia region but a much
more restrained development in the Americas and the region
Europe, C.I.S., Africa and Middle East, which is the most impor-
tant market for Siemens. For the Americas region GDP is ex-
pected to grow by 2.3% in 2010 and 3.3% in 2011, while the
Europe, C.I.S., Africa and Middle East region can expect growth
of just 1.4% in 2010 and 2.2% in 2011 according to IHS Global
Insight. Smoothing the path of the global recovery are govern-
ment stimulus programs and the measures enacted to help
stabilize the financial markets, the positive effects of both of
which are now becoming increasingly apparent. Continued
growth will, however, be conditional on the leading central
banks maintaining their expansive monetary policy.
Even at this point there remain a number of factors that could
derail the economic recovery now under way. Banks might
further restrict their lending activities as a result of the deteri-
oration in the quality of loans triggered by the financial crisis
and the need to further shore up their own equity resources.
Rising unemployment and a blow dealt to consumer confi-
dence by the recession could easily put a lasting damper on
consumer spending, especially in Europe and the USA. There
is also a risk that the expansive economic policy currently in
favor might be replaced too soon and too abruptly, with central
banks siphoning off the liquidity that has been pouring into
the markets in order to counter the threat of inflation and gov-
ernments introducing austerity measures in an attempt to put
public finances back on a more sustainable footing.