“Dieter Zetsche is lucky that he can stay for three more years,” writes Der Spiegel in Germany. The labor side of Daimler’s Supervisory Board had demanded Dr. Z’s head, the magazine writes. After long debates with Daimler’s Supervisory Board Chairman Manfred Bischoff, a compromise was found.
Says Der Spiegel:
“Early in the year, Daimler Works Council chief Erich Klemm and metalworker union boss Thomas Klebe approached Bischoff. They announced that the labor side of the Supervisory Board will unanimously vote against an extension of CEO Zetsches’ contract.”
Labor, but also management criticized Zetsche’s style, or rather the lack thereof. Bischoff threatened that he could veto the decision. In a large German corporation, the Supervisory Board consists of 50 percent representatives of labor, the other half represent the capital. If votes are tied, the Chairman can break the tie.
Instead, a compromise was reached. Zetsche’s contract was extended only for three years instead of five. Wolfgang Bernhard, unloved by the unions for his gruff style, was sent to manage trucks.
For everybody’s edification, a German Supervisory Board is not a Board of Management. The Supervisory Board supervises, it does not manage. The Supervisory Board cannot tell management what to do. All it can is approve or disapprove management’s proposals.