RENEE MONTAGNE, host:
On Wednesdays we talk about the workplace. And today we go to Germany, where there's debate over executive salaries. German business leaders generally take home much less than their U.S. counterparts. But recent news reports about multimillion dollar pay packages have sparked a national fury in Germany.
From Berlin, Kyle James reports.
KYLE JAMES: A group of marketing executives is having lunch at the Capital Club in Berlin, a private business club on the city's most elegant square. This is where many of Germany's top executives come when they're in the capital and perhaps among its leather chairs and marble tabletops they can find a little shelter from the current storm of negative public opinion about their take-home pay.
It broke out after reports surfaced that luxury carmaker Porsche paid its management board $161 million in its last fiscal year, more than twice it did the year before. But Michael Schroder, former Germany head of the global PR firm Hill and Knowlton, says those kinds of salaries are justified.
Mr. MICHAEL SCHRODER (Hill and Knowlton): If someone is responsible for company let's say with 20,000 or 30,000 employees and listed on stock exchange, your responsibility is so, so high, and the power you need and the pressure you are under has its worth.
JAMES: That worth is about $6.6 million a year, the average compensation for the CEOs of Germany's top 30 publicly traded companies. That might seem reasonable to Americans, since according to the Corporate Library, leading CEOs in the U.S. earn around 15 million a year. But in Germany that's a development many don't like.
Michael Sommer heads Germany's Trade Union Association.
Mr. MICHAEL SOMMER (Trade Union Association): (Speaking German)
JAMES: Traditionally, a German director earned about eight times what a skilled worker earned, he says. Now in large firms we have executives being paid according to the American models, earning 200 or 300 times more than workers. He goes on - we've never had that in Germany, and many think it's unfair.
In a survey conducted in November, 83 percent of those asked said current salaries of leading CEOs are excessive. The debate comes at a time of unease in Germany about the growing gap between the haves and the have-nots, especially in a social welfare state where taxes and benefits used to nudge people toward the center. But cuts in the top tax rates and welfare reforms have helped the rich get richer and the poor lose ground.
(Soundbite of bar)
JAMES: At a bar in a working class neighborhood of Berlin, 66-year-old retired car factory worker Helmut Tatchmarchek(ph) is having a beer with friends. He says he's not as worried about paying top dollar for a CEO who performs. But he's outraged over executives like Daimler Chrysler's former head Jurgen Schrempp who are given severance in stock packages worth millions, even if they leave their companies in tatters.
Mr. HELMUT TATCHMARCHEK (Retired Factory Worker): (Speaking German)
JAMES: In Germany, executives can screw things up and still they get money thrown after them when they leave, he says. I think that's wrong. When they make a mess of things, he adds, they should face the consequences and not be rewarded with severance pay.
Politicians have been critical of at least some pay practices. Conservative Chancellor Angela Merkel has said rewarding failed CEOs with huge bonuses upsets the country's social balance. No one is talking about capping salaries, a move which wouldn't pass constitutional muster.
But many are talking about demanding more transparency and giving shareholders more say about compensation, or changing tax rules around bonuses.
Social Democratic parliamentarian Joachim Poss is heading a new task force on CEO pay.
Mr. JOACHIM POSS (Parliamentarian): (Speaking German)
JAMES: We're checking on how already existing laws on disclosure and shareholder responsibilities, as well as tax law, might be modified, he says. As we can see from the reactions of business leaders, Poss adds, the pressure is growing, and that's what I want.
(Soundbite of crowd)
JAMES: Back at the Capital Club, former CEO Michael Schroder says top German executives do feel under attack about money. He says he feels for them, since he's been there.
Mr. SCHRODER: They're pretty alone, and I know how cold it is on top of the mountain. And you lose more than you get at the end.
JAMES: The debate has bled over into the world of sports. Germany's parliamentary president has now criticized the sky-high salaries of soccer players. He added that politicians, on the other hand, don't earn enough.
For NPR News, I'm Kyle James in Berlin.