In the corporate governance declaration (also known as the Corporate Governance Report), we report on the principles of management and corporate governance for the last fiscal year in accordance with Sections 289f and 315d of the German Commercial Code (HGB) and Principle 22 of the German Corporate Governance Code (GCGC, in the current version published on December 16, 2019).
The declaration contains the Declaration of Conformity, information on corporate governance practices, a description of how the Management Board and Supervisory Board work and key corporate governance structures. The declaration is also available to the public on our website. Pursuant to Section 317 (2) (6) HGB, the disclosures pursuant to Sections 289f and 315d HGB are not included in the audit performed by the auditor of the annual financial statements.
Declaration of Conformity to the GCGC Pursuant to Section 161 of the German Stock Corporation Act (AktG)
The Management Board and the Supervisory Board of Vonovia SE declare that, since the last declaration of conformity was made on November 30, 2020, the company has complied with the recommendations made by the “Government Commission on the German Corporate Governance Code” in the version published in the official section of the federal gazette by the German Federal Ministry of Justice on March 20, 2020 (“GCGC 2020”) with the following restrictions and will continue to do so in the future.
Pursuant to G.13 sentence 1 GCGC 2020, any payments made to a Management Board member due to early termination of their Management Board activity shall not exceed twice the annual remuneration (severance cap) and shall not constitute remuneration for more than the remaining term of the employment contract. No. 4.2.3 (5) GCGC 2017 recommended that benefit commitments made in connection with the early termination of a Management Board member’s activity due to a change of control did not exceed 150% of the severance cap. The GCGC 2020 no longer contains any explicit recommendation for benefits resulting from a change of control. It is unclear whether the general recommendation made in G.13 sentence 1 GCGC 2020 on the severance amount applies in this regard. The existing Management Board employment contracts already largely comply with the recommendation set out in G.13 sentence 1 GCGC 2020. The Supervisory Board reserves the right, however, when contracts are extended or future contracts are concluded, to reach agreements that are consistent with the recommendation set out in No. 4.2.3 (5) GCGC 2017 to take account of interests relating to vested rights and the particular circumstances of the individual case. As a result, we declare as a precaution that the recommendation made in G.13 sentence 1 GCGC 2020 is not complied with.
Pursuant to G.13 sentence 2 GCGC 2020, if post-contractual non-competition clauses apply, the severance payments shall be taken into account in the calculation of any compensation payments. Even before the GCGC 2020 entered into force, post-contractual non-competition clauses were agreed with individual Management Board members. These do not provide for severance payments to be taken into account in the calculation of any compensation payments. When contracts are extended or future contracts are concluded, the Supervisory Board reserves the right, in the interests of flexibility or for reasons relating to vested rights, to make decisions on agreeing to take severance payments into account in the calculation of any compensation payments on a case-by-case basis. As a result, we declare that the recommendation made in G.13 sentence 2 GCGC 2020 is not complied with.