Declaration of conformity

On November 21, 2008, the Board of Management and Supervisory Board of Volkswagen AG issued the statutorily required declaration of conformity with the German Corporate Governance Code as required by section 161 of the Aktiengesetz (AktG – German Stock Corporation Act). In it they declared that they had complied with the recommendations of the Government Commission on the German Corporate Governance Code as issued on June 14, 2007 until the release of the revised version on August 8, 2008, with the exception of article 5.3.3 (formation of a Nomination Committee). This means that until the Supervisory Board’s November meeting (on November 21, 2008) which regularly deals with the recommendations and suggestions of the Code, the Company had largely complied with the Code as amended on June 6, 2008. Departures from it related to the resolution by the full Supervisory Board on the remuneration system for the Board of Management (article 4.2.2(1) of the Code), the cap on severance payments (article 4.2.3(4) and (5) of the Code) and the Nomination Committee (article 5.3.3 of the Code).

The Board of Management and Supervisory Board have moreover declared that, in issuing the current declaration of conformity dated November 21, 2008, they have complied with the recommendations of the German Corporate Governance Code as amended on June 6, 2008 without qualification except for the provision on a cap on severance payments (article 4.2.3(4) and (5) of the Code).

A Nomination Committee was initially not formed as Volkswagen AG’s Supervisory Board already has a Presidium, which is above all responsible for preparing the resolutions for the Supervisory Board. Volkswagen AG’s Supervisory Board then decided in February 2008 to deal with the formation of such a committee at its November meeting. By way of a resolution dated November 21, 2008, a Nomination Committee was formed with responsibility for suggesting suitable candidates for the Supervisory Board to propose for election at the Annual General Meeting. The Nomination Committee is made up of the shareholder representatives in the Presidium of the Supervisory Board.

The recommended caps on severance payments in contracts for members of the Board of Management were not introduced, as there are doubts about the effectiveness of such contractual clauses in professional circles and this would reduce the ability of the Supervisory Board to act without offering significant advantages in view of the applicable legal situation.

A consensus was reached on the new recommendation that the full Supervisory Board should decide and regularly review the remuneration system for members of the Board of Management, including the essential elements of their contracts, with the result that the Supervisory Board approved a resolution at its meeting on November 21, 2008 to follow this recommendation.

The current joint declaration of conformity by the Board of Management and the Supervisory Board under section 161 of the AktG has been published on our website, www.volkswagenag.com/ir.

In addition, the Volkswagen Group will largely comply with the suggestions of the Code. However, it still has no plans to implement the suggestion made in the Code to the effect that one-time variable components tied to business performance should be taken into account in setting the remuneration of the Board of Management (article 4.2.3, clause 3 of the Code) and that long-term performance should be taken into account in setting the remuneration of the Supervisory Board (article 5.4.6, clause 5 of the Code). We intend to continue pursuing the debate on this matter in professional circles.

Since all members of the Board of Management exercised all their conversion rights under the Stock Option Plan at the end of 2008, a new Long-Term Incentive Plan (LTI) is being prepared. This remuneration component will be oriented on the Company’s long-term performance. The planned implementation means that the suggestion in paragraph 2, sentence 2 of article 4.2.3. of the Code regarding “long-term incentives containing risk elements” will again be complied with.

In their declaration of conformity with the German Corporate Governance Code on November 24, 2008, the Board of Management and Supervisory Board of AUDI AG declared that the recommendations of the Code as issued on June 14, 2007 until the release of the revised version on August 8, 2008 had largely been complied with. However, there were qualifications: the Supervisory Board has not formed a Nomination Committee (article 5.3.3 of the Code), members are not elected to the Supervisory Board on an individual basis (article 5.4.3, clause 1 of the Code), and the remuneration of the members of the Supervisory Board is not reported individually, classified by components (article 5.4.7(3), clause 1 of the Code). The Board of Management and the Supervisory Board of AUDI AG also declared that they complied and continue to comply with the recommendations as amended on June 6, 2008 and issued on August 8, 2008. However, the aforementioned qualifications applied and continue to apply, with the additional qualification that article 4.2.3 (4) and (5) of the Code (cap on severance payments) has not been complied with. The declaration of conformity is published at www.audi.com.

The following qualifications apply to AUDI AG with regard to the suggestions contained in the Code: the Annual General Meeting of AUDI AG is not broadcast on the Internet (article 2.3.4 of the Code). There is therefore no need to enable absent shareholders to contact the company’s proxies (article 2.3.3, sentence 3, 2nd half-sentence of the Code) during the Annual General Meeting. In addition, all qualifications stated with regard to Volkswagen AG also apply to AUDI AG.

DECLARATION OF CONFORMITY OF VOLKSWAGEN AG
www.volkswagenag.com/ir

DECLARATION OF CONFORMITY OF AUDI AG
www.audi.com

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