Money Matters Pay Boost for New Siemens Chief

Joe Kaeser’s promotion last year to chief executive of Germany’s largest engineering giant Siemens has earned him a pay rise of 44 percent.
Drinks are on Joe Kaeser.

Joe Kaeser’s job of turning around Siemens is not done yet, but he has already been able to reap the benefits of becoming the company’s chief executive.

His pay has increased to €6.2 million ($7.6 million) for Siemens fiscal year 2014, which ended in September, according to Siemens annual report, which was published on Wednesday. The number includes bonuses.

Mr. Kaeser, who is tasked to increase profitability at the engineering firm to keep up with rivals including U.S.-listed General Electric, earned €4.3 million in the fiscal year of 2013, when he served ten months as the company’s finance chief and two as the chief executive.

He became chief executive in August 2013, taking over from Peter Löscher who left abruptly after Siemens delivered a lackluster set of results.

Joe Kaeser became chief executive in August 2013, taking over from Peter Löscher, who left abruptly after Siemens delivered a lackluster set of results

Under Mr. Kaeser’s leadership, Siemens has announced a number of divestments and takeovers, including the planned $6.4 billion takeover of U.S. energy equipment maker Dresser-Rand, and it promised a 15 percent rise in profit per share for the fiscal year 2015.

Siemens is trying to increase profitability, especially at its energy operations, and move away from the production of consumer products. It has agreed to sell a stake in washing maschine maker Bosch and Siemens Household Appliances and it plans to sell its hearing aid business.

The annual salary of Mr. Kaeser lies between the salaries of chief executives at rivals General Electric and ABB, which is headquartered in Switzerland. It is also in line with what Mr. Kaeser’s predecessor, Peter Löscher earned with the annual salaries of €7.9 million and €5.6 million in fiscal years 2012 and 2013 respectively.

In addition to the salary increase, Siemens also announced to new non-executive supervisory board members, who decide about the hiring and firing of Siemens’ executives.

Birgit Steinborn, currently chairwoman of the company’s central works council, will become deputy chairwoman of the supervisory board, Siemens said in a statement on Wednesday.

Ms. Steinborn is not the only woman who will gain more responsibility. A Siemens family member will soon join the supervisory board: Nathalie von Siemens. She will represent the interests of the family in the supervisory board and will take over from Gerd von Brandenstein, who is retiring for reasons of age.

The 43-year-old Nathalie von Siemens currently is acting as managing director and board spokesperson at the Siemens Stiftung. She did her PhD work on the concept of friendship in Aristotle’s Nicomachean Ethics, and worked previously in the strategy division of Siemens.

She never made a secret of her heritage. “I am Nathalie – Nathalie von Siemens. I am the great-granddaughter of the company’s founder,” is how she introduced herself in a promotional film for the company.

The company said nothing however about a possible successor for supervisory board chairman Gerhard Cromme, who is 71. Investors have called on Mr. Cromme in recent years to address the matter of his succession but he shows no signs of wanting to step down.

The new power structure at Siemens will come into effect after the annual shareholder’s meeting on Jan. 27.

 

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Axel Höpner heads Handelsblatt's Munich office and focuses on the developments of the Allianz and Siemens corporations. Gilbert Kreijger is an editor at Handelsblatt Global Edition in Berlin, reporting on companies and markets. To contact the authors: [email protected]; [email protected].