German parties agree manager pay limits: paper

BERLIN (Reuters) - Finance experts in Germany's ruling coalition have reached a consensus on new measures to limit the compensation of top corporate managers, the Handelsblatt newspaper reported on Wednesday.

According to the paper, they have agreed an 8-point programme that would prevent managers from exercising stock options for a four-year period and oblige company boards to reduce the salaries of top executives when their firms performed poorly.

The plan also foresees tighter salary rules for companies that are majority-owned by the government.

"In the interests of the social market economy and fairness, we believe it is necessary to ensure, with legislative measures, that the relationship between the compensation and performance of corporate managers is made acceptable again," a draft of the agreement states, according to the paper.

The working group was expected to meet again on Thursday to finalize the measures, which would then be made into law, the paper said.

The government faced pressure earlier this year to take steps to limit manager compensation after a series of corporate scandals hit Germany.

Klaus Zumwinkel, then chief executive of Deutsche Post, had his house raided as part of a tax-dodging probe. Scandals have also rocked companies like Volkswagen and Siemens.

The political will to take concrete steps has increased in the face of a global financial crisis, which forced the government to unveil a 500 billion euro ($631.2 billion) rescue package for German banks.

Finance Minister Peer Steinbrueck has repeatedly criticised bank managers for failing to understand the risks they assumed.

(Writing by Noah Barkin)