MUNICH, Germany According to Financial Times Deutschland (FTD), Infineon's supervisory board has agreed to reduce the interim payments to ex-CEO Wolfgang Ziebart. Insiders believe the move is an act of personal revenge.
Ziebart receives an annual payment of 560.000 (about $795.000), beginning September 2009. For the first year after his resign he received the average salary for the past 12 months before he left the company plus a bonus amounting to the average bonus of the past three years. This salary significantly exceeds 1 million, FTD reckons.
According to the paper, the move has been initiated by outgoing supervisory board chairman Max Kley and current CEO Peter Bauer. Bauer succeeded Ziebart after a painful and long feud between the latter and Kley that ended in Ziebart's withdrawal about a year ago. Infineon insiders however pointed out that decisions about such a matter are not taken at the CEO level but exclusively on the supervisory board level. Thus, Bauer was not involved in the case.
In its move, the chip company makes use of a new law regulating the salary of board members. It allows companies to reduce the payments to former top-level managers retrospectively if the situation of the company has significantly deteriorated. According to FTD Infineon's move is the first case ever the law has been applied.
Since the supervisory board went quite far in its interpretation, observers believe the move could be a result of Kley's known and intimate enmity against Ziebart. However, since Bauer against the background of the company's problems in the past quarters abdicated 20 percent of his salary, a reduction of Ziebart's payments could be justified, others believe.
The ex-CEO now has to option to appeal Infineon's move.
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