DaimlerChrysler will in future give top executives only three-year contract extensions rather than its standard five-year deals, the German-American carmaker said on Friday.
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“The supervisory board has decided to award as a rule a term of only three years when renewing the contracts of members of the management board,” a spokesman told Reuters, citing efforts to improve corporate governance standards.
The news agency noted that most companies in Germany extend senior managers’ contracts by five years at a time, and chief executive Dieter Zetsche just had his deal renewed until 2010.
New members of the executive board normally got three-year contracts, and even that was longer than the terms many US companies give their top managers, the report added.
Reuters said that tests of the new standard may come later this year as the car maker decides on extensions for corporate development head Ruediger Grube and trucks division boss Andreas Renschler, whose contracts expire in 2007.
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By GlobalDataThe spokesman reportedly would not say whether the new rules that took effect in August would apply to those two current members.
