The Mannesmann Executive Compensation Trial in Germany

in Law and Capitalism

Published by University of Chicago Press

Published in print June 2008 | ISBN: 9780226525273
Published online March 2013 | e-ISBN: 9780226525297 | DOI:
The Mannesmann Executive Compensation Trial in Germany

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Germany has the third largest economy in the world, yet the features of German capitalism stand in stark contrast to the American system. The role that law plays in the economy differs also, as vividly illustrated by the recent criminal trial of corporate executives for deciding to award a key manager a large bonus in connection with the successful completion of a merger. This chapter shows how a social system and a legal regime organized along very different lines was deemed scandalous. In February 2000, a merger agreement joining Mannesmann, a German firm, and Vodafone, a British telecommunications company, was signed. Mannesmann had traditionally focused on the coal and steel sectors but had diversified into telecommunications in the 1990s. However, after failing to mobilize the French company Vivendi as a white knight and facing increasing shareholder support for the Vodafone offer, Mannesmann's management conceded defeat.

Keywords: Germany; capitalism; law; merger; trial; Mannesmann; Vodafone; telecommunications; Vivendi; corporate executives

Chapter.  7297 words. 

Subjects: Company and Commercial Law

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