Daimler extends CEO's contract by three years

FRANKFURT Thu Feb 21, 2013 2:54pm GMT

Daimler AG Chief Executive Dieter Zetsche smiles during the company's annual news conference in Stuttgart February 7, 2013. REUTERS/Michael Dalder

Daimler AG Chief Executive Dieter Zetsche smiles during the company's annual news conference in Stuttgart February 7, 2013.

Credit: Reuters/Michael Dalder

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FRANKFURT (Reuters) - Daimler (DAIGn.DE) extended the contract of Chief Executive Dieter Zetsche, giving him three more years to put the company on track to become the world's biggest premium carmaker by the end of the decade.

59-year old Zetsche, who took the helm in 2006, will receive a new contract valid through the end of 2016, potentially making him one of Daimler's longest-serving CEOs.

Analysts said the decision showed a lack of alternative candidates and came despite growing criticism that rivals BMW (BMWG.DE) and Volkswagen's Audi (VOWG_p.DE) are winning the race for global leadership at Daimler's expense, particularly in China.

"Dieter Zetsche is distinguished of course by his great experience, but also by his ability to combine a feeling for cars with sound engineering knowledge and an entrepreneurial approach," Daimler Chairman Manfred Bischoff said in a statement on Thursday after a meeting of the supervisory board.

In a surprise move, Mercedes production and purchasing chief Wolfgang Bernhard will swap jobs with his colleague Andreas Renschler and take over as head of Daimler Trucks as of April.

Daimler missed its original profit target last year by 10 percent, or roughly 1 billion euros ($1.3 billion), and said a weak first quarter would mean earnings would stagnate this year. It also scrapped its 2013 margin goal for Mercedes.

"I have the feeling that the Daimler board is a old boys' club where the members want to avoid doing any harm to each other. They just see a company that is selling more cars than ever before and don't really grasp the urgency to act," said Credit Suisse analyst Erich Hauser.

($1 = 0.7479 euros)

(Reporting By Christiaan Hetzner; Editing by Erica Billingham)

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