No manager bonuses and dividends
Deutsche Bahn will probably use the electricity price brake
03/24/2023, 8:22 p.m
The increased electricity prices are affecting the railways. CEO Lutz expects additional costs in the billions. Accordingly, the company should now take advantage of the state’s electricity price brake. This has consequences for managers and shareholders.
According to company circles, Deutsche Bahn will be the first large company to take advantage of the electricity price brake. The board of directors decided that after a long review, said several company representatives. The heavily indebted railway is the largest electricity consumer in Germany and is therefore particularly suffering from the increased prices. Bahn boss Richard Lutz spoke in November of up to two billion euros in additional costs for electricity alone.
According to the federal government, the energy-intensive companies provide for the electricity price brake to cap the electricity price at 13 cents of the net working price. This applies to 70 percent of the previous consumption. The current market price must be paid for the remaining amounts of electricity. Companies with a consumption of more than 30,000 kilowatt hours per year are considered energy-intensive. The regulation is limited to the end of April 2024. Deutsche Bahn specifies the traction current requirement at around ten terawatt hours or ten billion kilowatt hours per year
However, the electricity price brake is subject to conditions: the group must report a drop in profits or losses. In addition, a company is then not allowed to pay out manager bonuses and dividends, which has deterred many listed companies. This is now affecting the railway managers as well. A railway spokeswoman declined to comment.
The fact that the bonus lock could already affect payments for 2022, although the price brake will only take effect from January 2023, caused particular concern, said group representatives. There are different legal opinions here. The railway wanted to put payments on hold for the time being, said group representatives.
Deutsche Bahn has been planning to reform the remuneration system for some time. Bonuses are to be reduced and regular salaries are to be increased in return. The supervisory board of the group wants to deal with this in the next week. Although a state-owned company, the railways had to pay dividends in the past, which went to the federal government. This in turn invested them back into the rail network. However, since the company is unlikely to have made a profit again in 2022, the dividend could be canceled anyway.