Siemens 2013 Annual Report Download - page 126

92 A. To our Shareholders 117 B. Corporate Governance
118 B.1 Corporate Governance Report
124 B. Corporate Governance statement pursuant to
Section 289a of the German Commercial Code
(part of the Combined Management Report)
126 B.3 Compliance Report
129 B.4 Compensation Report
(part of the Combined Management Report)
148 B.5 Takeover-relevant information (pursuant to
Sections 289 para. 4 and 315 para. 4 of the
German Commercial Code) and explanatory report
(part of the Combined Management Report)

The Corporate Governance statement pursuant to Section 289a
of the German Commercial Code (Handelsgesetzbuch) is an
integral part of the Combined Management Report. In accor-
dance with Section 317 para. 2 sentence 3 of the German Com-
mercial Code, the disclosures made within the scope of Section
289a of the German Commercial Code are not subject to the
audit by the auditors.
DECLARATION OF CONFORMITY WITH THE
GERMAN CORPORATE GOVERNANCE CODE
The Managing Board and the Supervisory Board of Siemens AG
approved the following Declaration of Conformity pursuant to
Section 161 of the German Stock Corporation Act as of October
1, 2013:
“Declaration of Conformity by the Managing Board and the
Supervisory Board of Siemens Aktiengesellschaft with the
German Corporate Governance Code
Siemens AG complies and will continue to comply with
the currently applicable recommendations of the German
Corporate Governance Code (“Code”) in the version of
May 13, 2013, published by the Federal Ministry of Justice
in the official section of the Federal Gazette (“Bundes-
anzeiger”). Further details are as follows:
In Section 4.2.3 para. 2 sentence 6, the Code recommends
capping the amount of Management Board compensation,
both overall and for individual compensation components.
Plans call for implementing this recommendation effective
October 1, 2013. The current Managing Board contracts
specify caps for bonuses and long-term, stock-based com-
pensation. However, these caps are defined as a percent-
age of each target amount; they are not specific figures. In
line with the principle that agreements must be honored,
retroactive intervention in these contracts would be inap-
propriate. It could not be implemented by the company
unilaterally and, in our opinion, is not required by Section
4.2.3 para. 2 sentence 6.
B.2 Corporate Governance statement pursuant to Section 289a
of the German Commercial Code
In Section 4.2.3 para. 4 sentence 1, the Code recommends
that, in concluding Management Board contracts, care be
taken to ensure that payments made to a Management
Board member on premature termination of his / her con-
tract, including fringe benefits, do not exceed the value of
two years’ compensation (severance payment cap) and
compensate no more than the remaining term of the
employment contract.
The current Managing Board contracts contain a corre-
sponding severance payment cap, and it is intended to in-
clude such a cap in all future Managing Board contracts.
Therefore, the agreements concluded with Mr. Löscher
and Ms. Ederer on the premature termination of their
Managing Board activities specify severance payments
that do not exceed the value of two years’ compensation.
Further benefits that do not constitute compensation pay-
ments in the sense of Section 4.2.3 para. 4 sentence 1 of
the Code were also agreed upon with both Mr. Löscher and
Ms. Ederer, Mr. Löscher in particular having signed a two-
year post-contractual non-compete clause. Details of the
agreements with Mr. Löscher and Ms. Ederer will be pro-
vided in the Compensation Report included in the Annual
Report for 2013.
Since making the last Declaration of Conformity dated
October 1, 2012, Siemens AG has complied with the recom-
mendations of the Code in the prior version of May 15,
2012.
Berlin and Munich, October 1, 2013
Siemens Aktiengesellschaft
The Managing Board The Supervisory Board“