STUTTGART, Germany - DaimlerChrysler AG is completing a new pay plan that will extend Chrysler-style bonuses and incentive pay to its German executives.
D/C said it wants eventually to extend incentive and performance-related bonuses to all factory workers.
Although the former Daimler-Benz AG had a flexible bonus plan for top executives, the management pay structure was much more rigid than at Chrysler Corp.
At Chrysler, as little as 25 percent of an executive's compensation was in the form of salary. At Daimler-Benz, salary accounted for 40 to 60 percent of an executive's compensation.
'The proportions of fixed and flexible incomes will change with the new system,' said spokesman Juergen Wittman. 'For the first time, this payment structure will be introduced to lower management levels.'
Although details have not yet been finalized, there will be four elements of pay:
1. A fixed salary
2. A personal-success bonus
3. A stock option plan
4. An extra bonus based on the performance of the company.
'The aim of the new payment scheme is to strengthen the link between salaries, the company's success in the market and the individual's performance,' Wittman said.
'It also aims to bridge the gap between U.S. and German salaries and to be more competitive in the international recruitment market.
'The higher the position, the higher the flexible part of the salary,' he added. 'The top 250 managers at D/C will receive 25 to 30 percent fixed income.' The pay plan is expected to be implemented early this summer.
D/C already has adopted Chrysler Corp.'s seven levels of management. Daimler-Benz had four levels.