DaimlerChrysler halts "phantom share" pay plan


FRANKFURT, March 23 (Reuters) - Autos giant DaimlerChrysler has frozen plans to pay supervisory board members part of their salaries in "phantom shares" because of legal uncertainty over stock-based rewards, the group said on Tuesday.

DaimlerChrysler had wanted to cut supervisory board members' pay by 25 percent to 55,000 euros ($67,720) and make up the difference with a variable component linked to the stock price, which would carry the benefits and risks of share ownership without requiring the company to issue stock.

But the topic has been withdrawn from the agenda of DaimlerChrysler's annual general meeting on April 7 after the Federal Court of Justice ruled last week that variable remuneration based on stock options was inadmissible.

The Stuttgart-based carmaker said it believed the ruling did not cover its plan, which would not involve options, but said the court had created uncertainty regarding the legal position.

"It can not (now) be ruled out that the court would view a variable form of supervisory board remuneration based on the stock price as generally inadmissible," it said in a statement.

"The lawmaker is therefore called upon to alleviate this uncertainty."

DaimlerChrysler's supervisory board is made up of 10 members elected by shareholders and 10 members representing employees.



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