Report of the Supervisory Board

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Dr. Manfred Bischoff, Chairman of the Supervisory Board

Dear Shareholders, Daimler’s 2018 financial year reflects our customers’ continuing interest in our vehicles, as well as the upheaval and global challenges of the automotive industry. Digitization, connectivity, electrification, automated and autonomous driving, changes in customer behavior, mobility services, but also new regulatory requirements, are all changing the industry fast. Furthermore, burdens from the past, emissions issues and the current global trade disputes adversely affected our earnings last year. Despite various challenges, Daimler’s success is unbroken and it will pay out an adequate dividend to its shareholders. The technologies of the future and new mobility models require extremely high investment. Daimler invests, researches and develops a lot, and is therefore ideally prepared to play an important and leading role in the mobility of the future, and in shaping it successfully.

Supervisory and advisory activities of the ­Supervisory Board

The Supervisory Board of Daimler AG fully performed its tasks as defined by the law, the Company’s Articles of Incorporation and its own rules of procedure once again in the year 2018. The Supervisory Board continually advised and supervised the Board of Management in the management of the Company and provided support with strategically important issues relating to the Group’s further development.

The Supervisory Board examined whether the annual company and consolidated financial statements, the combined management report and other financial reporting, as well as the non-financial report for Daimler AG and the Daimler Group, which was prepared for the first time for financial year 2017, were in conformance with the applicable requirements.

In addition, it approved numerous business matters for which its consent was required following careful reviews and consultations. As well as approving the implementation of the divisional structure with the creation of legally independent entities in the context of “Project Future”, this also included finance and investment planning, major equity measures at companies of the Group, associated companies and joint ventures, and the conclusion of contracts with particular importance for the Group. The Board of Management informed the Supervisory Board about a large number of further measures and business transactions, and discussed them with it intensively and in detail, including the measures in connection with the administrative order of the German Federal Motor Transport Authority to recall certain Mercedes-Benz diesel vehicles and the ongoing talks held with the Federal Ministry of Transport and Digital Infrastructure.

The Board of Management regularly informed the Supervisory Board about all significant economic developments of the Group and the divisions. It continually provided information to it on all fundamental questions of corporate planning, including finance, investment, sales and personnel planning, current developments at the companies of the Group, the development of revenue, the situation of the Company and the divisions, as well as on the current status and the assessment of significant legal proceedings. Furthermore, the Board of Management reported to the Supervisory Board continually on return on equity and the Group’s liquidity situation, the development of sales and procurement markets, the overall economic situation, and developments in the capital markets and the area of financial services. Additional topics included the further development of the product portfolio, securing the Group’s long-term competitiveness and the ongoing implementation of measures for safeguarding sustainable and future-oriented mobility. The Supervisory Board also dealt in detail with the shareholder structure, the development of the share price and the related background, and the expected impact of strategic projects on the share price.

Daimler’s success is based on a profound and integrative automotive expertise and strategic foresight. The 5C strategy consisting of CORE, CASE, CULTURE, COMPANY and CUSTOMER, which is explained on Objectives and Strategy of this Annual Report, is in the implementation phase. It sets the course for a locally emission-free and electric future and focuses on employees and customers. Daimler is making enormous investments in the transformation of the radically changing automotive industry. This, as well as global trade disputes, and emission and antitrust issues, are adversely affecting the Group’s results of operations. The latter issues also affect the credibility of the entire industry. Daimler feels an obligation to its customers and shareholders to reshape future mobility with sustainable products and innovative services.

To achieve this, the Supervisory Board emphatically supports the reorganization of the Group, the so-called Project Future. Daimler is acting proactively with this reorganization for five main reasons: A sharper focus. The legally independent business entities that we aim to create with their own decision-making boards will have greater customer proximity and allow more precise work in the markets. Strengthening entrepreneurial action. The new business entities will have greater freedom and more scope to manoeuver. There will be clear responsibilities. Gaining innovation/cooperation partners. The legally separate business entities will be attractive cooperation partners. Furthermore, the new structure will offer greater scope to remain capable of action in a dynamic competitive environment. There are no plans for Daimler AG to divest individual business units. Increasing capital strength. The realignment will enhance transparency of the individual parts of the Group and thus the attractiveness of Daimler AG in the capital market. Securing synergies. The realignment will preserve economies of scale in purchasing and financing, for example. The shared use of intellectual property rights, including the brands, will also continue to be secured under the new structure.

Working culture and areas of Supervisory Board activity

In the year 2018, the Supervisory Board convened for nine meetings. Participation in the meetings by the members of the Supervisory Board was at a high level once again. During the year under review, all members of the Supervisory Board participated in significantly more than half of the meetings of the Supervisory Board and of its committees of which they are members. The work of the Supervisory Board featured open and intensive exchanges of information and opinions. The members of the Supervisory Board regularly prepared for upcoming resolutions with the use of documentation provided in advance by the Board of Management. Furthermore, the members representing the employees and the members representing the shareholders regularly prepared the Supervisory Board meetings in separate discussions, which were also attended by members of the Board of Management. The Supervisory Board was intensively supported by its committees and the members of the Supervisory Board discussed the measures and business matters to be decided upon in detail with the Board of Management. For the meetings, executive sessions were regularly arranged so that topics could be discussed also in the absence of the Board of Management.

The members of the Supervisory Board and of the Board of Management came together for bilateral exchanges of opinions also outside the regular meetings. The Board of Management informed the Supervisory Board also with written reports about the most important indicators of business development and existing risks, and submitted the interim financial reports to the Supervisory Board. The Supervisory Board was informed of special occurrences also between the meetings.

The members of the Supervisory Board independently attend such courses of training and further training regarded as necessary for the performance of their tasks, relating for example to changes in the legal framework and new, future-oriented technologies, in which they are supported by the Company. In a special onboarding program, new members of the Supervisory Board have the opportunity to meet the members of the Board of Management and senior executives with specialist responsibility for a bilateral exchange of opinions and information on fundamental and current topics of the various Board of Management areas, allowing them to gain an overview of the topics relevant to the Daimler Group and of its governance structure.

In its meeting on January 31, 2018, which was attended by the external auditors, the Supervisory Board discussed, took note of and approved the preliminary key figures of the annual company and consolidated financial statements for 2017 and the dividend proposal to be made at the 2018 Annual Shareholders’ Meeting. The Supervisory Board determined that no objections were to be raised to their publication. The preliminary key figures for the year 2017 and the proposal on the appropriation of profit were announced at the Annual Press Conference on February 1, 2018.

In the Supervisory Board meeting held on February 9, 2018, the Supervisory Board decided to reappoint Renata Jungo Brüngger as a member of the Board of Management of Daimler AG with responsibility for “Integrity and Legal Affairs” for further five years effective as of January 1, 2019. Subsequently, it dealt with the annual company financial statements, the annual consolidated financial statements and the combined management report for Daimler AG and the Daimler Group for the year 2017, each of which had been issued with an unqualified audit opinion by the external auditors, as well as with the reports of the Audit Committee and the Supervisory Board, the declaration on corporate governance combined with the corporate governance report, the remuneration report, the non-financial report, which was issued with the independent auditor’s limited assurance in accordance with ISAE 3000, and the proposal on the appropriation of profit. In preparation, the members of the Supervisory Board were provided with comprehensive documentation.

The Audit Committee and the Supervisory Board dealt with those documents in detail and discussed them intensively in the presence of the independent auditors. The independent auditors reported on the results of their audit and on the key audit matters and the respective audit procedure including the conclusions drawn, as well as on the voluntary review of the non-financial report within the framework of a limited assurance engagement, and were available to answer questions and to provide further information. Following the final results of the review by the Audit Committee and its own review, the Supervisory Board declared its agreement with the results of the audit carried out by the external auditors. It determined that no objections were to be raised, approved the financial statements and the combined management report as presented by the Board of Management, and thus adopted the financial statements of Daimler AG for the year 2017. On this basis, the Supervisory Board consented to the proposal made by the Board of Management on the appropriation of distributable profit. In addition, the Supervisory Board approved the non-financial report, the report of the Supervisory Board, the corporate government statement combined with the corporate governance report, and the remuneration report, as well as its proposed decisions on the items of the agenda for the 2018 Annual Shareholders’ Meeting.

In its meeting on February 9, 2018, the Supervisory Board approved a number of measures for which its consent was required, in particular for the expansion of capacities at Beijing Benz Automotive Co. Ltd for the further development of local production of Mercedes-Benz vehicles. Furthermore, the Supervisory Board dealt with matters pertaining to the remuneration of the members of the Board of Management and, in connection with the item of the agenda on corporate governance, approved the memberships in other boards and further external secondary employments of the members of the Board of Management that were presented in the meeting. Finally, the Supervisory Board addressed current legal issues, in particular including the question of whether, in connection with the antitrust investigations of truck manufacturers by the European Commission, claims for compensation were to be made against former or current members of the Board of Management. On the basis of the reviews carried out so far and repeatedly updated by an independent law firm, a further review by an independent legal academic, as well as detailed discussions in the Supervisory Board taking into account the welfare of the Company, the Supervisory Board maintained its previous resolution, based on the information available, that no such claims were to be made at the present time. The Supervisory Board arranged for further clarification of the facts of the case in order to secure the current state of knowledge and obtained the expertise of an independent legal academic, who came to the conclusion that the Supervisory Board was fully complying with its obligations under stock corporation law in this respect. At the end of July 2018, it also discussed in this context the question of setting up an independent special committee. At the meeting in December 2018, the Supervisory Board dealt once again with the matter on the basis of new knowledge gained from further clarification of the facts of the case.

In the meeting in late March 2018, the Supervisory Board dealt with the merger of the mobility services of Daimler with those of BMW into a joint venture with equal shareholdings in the areas of carsharing, ride hailing, parking, charging and multimodality, and approved the plan.

In the Annual Shareholders’ Meeting on April 5, 2018, the candidates nominated by the Supervisory Board, Sari Baldauf and Dr. Jürgen Hambrecht once again and Marie Wieck for the first time, were elected to the Supervisory Board as representatives of the shareholders. In the subsequent meeting of the Supervisory Board, the representatives of the shareholders elected Sari Baldauf once again as a member of the Nomination Committee and Dr. Jürgen Hambrecht once again as a member of the Mediation Committee. Furthermore, the Supervisory Board elected Dr. Jürgen Hambrecht once again as a member of the Presidential Committee. Also in this meeting, the Supervisory Board passed resolutions with regard to the employee representatives elected with effect as of April 5, 2018: Michael Brecht was elected Deputy Chairman of the Supervisory Board, Michael Brecht and Ergun Lümali were elected as members of the Audit Committee and Roman Zitzelsberger was elected as a member of the Presidential Committee. In addition, the employee representatives elected Roman Zitzelsberger as a member of the Mediation Committee and the members of the Audit Committee elected Michael Brecht as the Deputy Chairman of this Committee.

Supervisory Board meeting held abroad

In late April 2018, the Supervisory Board convened for a two-day meeting abroad in Hungary. In addition to discussing current political conditions in Eastern Europe, the main focus was on visiting the plant in Kecskemét. A regular meeting of the Supervisory Board was also held as part of the meeting abroad. Among other things, the Supervisory Board decided on the future production of electric Mercedes-Benz vehicles at the French plant in Hambach. Furthermore, the Supervisory Board approved the transfer of pension obligations to pensioners of Daimler AG to Daimler Pensionsfonds AG. On the recommendation of the Audit Committee, the Supervisory Board also resolved to make adjustments to the rules of procedure of the Audit Committee with regard to the regular report to the Audit Committee, which were prompted by the changed responsibilities of the BPO (Business Practices Office) whistleblower system. In addition, the Supervisory Board was informed about the status of the review and the initiation of the first preparatory measures to strengthen the divisional structure within the framework of Project Future. Finally, the Supervisory Board received detailed reports on current legal issues, also with regard to inquiries, investigations, proceedings and administrative orders in connection with diesel exhaust emissions.

In a further meeting in early July 2018, the Supervisory Board discussed in detail the settlement of the Toll Collect arbitration proceedings and approved the conclusion of a settlement agreement between the Federal Republic of Germany, Daimler Financial Services AG, the other consortium partners (Deutsche Telekom AG and Cofiroute S. A.), Toll Collect GbR and Toll Collect GmbH to settle those arbitration proceedings.

In its meeting in late July 2018, following detailed prior discussion, including preliminary discussions with shareholders and employees, the Supervisory Board approved the implementation of Project Future and thus a new divisional structure for the Group with legally independent entities. In this meeting, the Supervisory Board also discussed the course of business and the results of the first half of the year in detail with the Board of Management and obtained information on current legal issues. In addition, the Supervisory Board also dealt with the question of whether an independent special committee of the Supervisory Board of Daimler AG should be set up to clarify any Board of Management responsibility in connection with the European Commission’s antitrust proceedings against truck manufacturers. As the facts of the matter were to be assessed and decisions were to be made by the Supervisory Board in its entirety, and in view of the fact that all independent members of the Supervisory Board had a special role in these discussions and that advice on this matter was provided by an independent law firm and another independent legal academic, it saw no reason to form a special committee. Furthermore, in the opinion of the Supervisory Board, no member of the Supervisory Board has concrete indications of relevant circumstances or relationships that could give rise to a material and not merely temporary conflict of interest and that would therefore speak against independence.

Strategy meeting of the Supervisory Board

At the beginning of the two-day strategy workshop in Böblingen and Filderstadt in late September, the Supervisory Board dealt with succession planning and decided on personnel changes. Since the term of office of the Chairman of the Supervisory Board is due to expire at the end of the Annual Shareholders’ Meeting in 2021, the Supervisory Board wanted to set the course for a suitable succession at an early stage, in view of the challenges of the transformation in the automotive industry, and therefore passed a resolution announcing its intention to propose the election of Dr. Dieter Zetsche to the Supervisory Board at the Annual Shareholders’ Meeting in 2021. In the event of Dr. Dieter Zetsche’s election by the 2021 Annual Shareholders’ Meeting, the Chairman of the Supervisory Board, Dr. Manfred Bischoff, intends to recommend Dr. Dieter Zetsche as his successor as Chairman of the Supervisory Board. In order to comply with the two-year cooling-off period, Dr. Dieter Zetsche will therefore resign from his position on the Board of Management of Daimler AG and as Head of Mercedes-Benz Cars at the end of the Annual Shareholders’ Meeting in 2019. As a result, the Supervisory Board decided to appoint Ola Källenius as Chairman of the Board of Management of Daimler AG for a new period of office of five years and as Head of Mercedes-Benz Cars effective at the end of the Annual Shareholders’ Meeting in 2019. Starting at the same time, as successor to Ola Källenius, Markus Schäfer will assume responsibility for “Group Research and Mercedes-Benz Cars Development” on the Board of Management of Daimler AG.

In this meeting, the Supervisory Board also approved the participation in the package of measures to improve air quality in Germany. The Supervisory Board also discussed, among other things, the current status of considerations regarding a new remuneration model for the Board of Management to take effect on January 1, 2019 (See Remuneration Report).

In addition to introductory discussions on the Daimler 5C strategy and the Mercedes-Benz Cars strategy, the focus of the strategy workshop was on three of the four areas of CASE: “Autonomous”, “Shared & Services” and “Electric.” The Supervisory Board dealt with the electrification of the vehicle fleets and, among other things, with battery and cell technology. Furthermore, it was informed about the portfolio of mobility services, particularly in view of growing mobility requirements in urban areas. In addition, the Supervisory Board was shown current developments and solutions relating to the automated and autonomous transportation of people and goods. Various vehicle exhibits were also presented. In a constructive and open dialogue, the members of the Supervisory Board and the Board of Management discussed with the executives responsible for the topics presented how Daimler will prepare for new challenges and what further developments are imminent. The changing competitive environment was also discussed. In addition, the Supervisory Board discussed the key financial indicators and the targets for the Group and the divisions. At the same meeting, the Supervisory Board was informed in detail about current legal issues, such as the initiation by the European Commission of a formal investigation into possible collusion on emission reduction systems. In this respect, the Supervisory Board dealt with Daimler’s internal processing of the matters and, in consultation with an independent law firm, also with the consequences for the further clarification and examination of any Board of Management responsibilities that are closely related to the progress of the proceedings.

Meeting on operational planning 2019/2020

On the day before the meeting in December 2018, the members of the Supervisory Board had the opportunity to participate in a product presentation. In the context of the actual meeting on December 12, 2018, the Supervisory Board dealt with the proposals to be made at the Annual Shareholders’ Meeting in 2019 for the election to the Supervisory Board of two members representing the shareholders. In addition, the Supervisory Board discussed key individual topics of Project Future. During the further course of the meeting, on the basis of comprehensive documentation, the Supervisory Board discussed in detail and approved the operational planning for the years 2019 and 2020, and, in this context, discussed existing opportunities and risks as well as the Group’s risk management.

The meeting also focused on information on current legal issues, including inquiries, investigations, proceedings and administrative orders in connection with diesel exhaust emissions. The question of possible claims for damages against former or current members of the Board of Management in connection with the European Commission’s antitrust proceedings against truck manufacturers was also dealt with once again. The Supervisory Board decided, after careful discussion of new knowledge gained from the further clarification of the facts of the case and after renewed consideration of the reasons for and against the assertion of a claim and taking into account the welfare of the Company, to maintain its current position that no claims for compensation are to be made at the present time.

In addition, the Supervisory Board dealt with software documentation, the technical compliance organization and the approval process in vehicle development, and was provided with information on the topic of sales of the future. The Supervisory Board was also informed about the topic of personnel development and the implementation of Leadership 2020. Other subjects discussed at the meeting were matters of corporate governance, in particular the declaration of compliance with the German Corporate Governance Code, and the review of the overall requirement profiles for the Board of Management and the Supervisory Board, including their fulfilment. Furthermore, the Supervisory Board looked ahead to the main topics for the 2019 financial year. Finally in this meeting, it dealt with the further development of the remuneration system, on the basis of preparations by the Presidential Committee, and, against the background of fundamental technological changes in the automotive industry, decided on changes to the annual bonus effective as of January 1, 2019. Details of the system of Board of Management remuneration and changes to the annual bonus are presented in the Remuneration Report.

Corporate governance and declaration of compliance

During the year 2018, the Supervisory Board was continually occupied with standards of good corporate governance.

In its meeting in December 2018, the Supervisory Board approved the 2018 declaration of compliance with the German Corporate Governance Code pursuant to Section 161 of the German Stock Corporation Act (AktG). With the exception explained there, all the recommendations of the Code have been complied with and continue to be complied with.

In accordance with good corporate governance, the members of the Supervisory Board of Daimler AG are obliged to disclose conflicts of interest – especially those that might arise due to an advisory or board function for a customer, supplier or creditor of Daimler, or for other third parties – to the entire Supervisory Board.

There were no indications of any actual conflicts of interest in the year 2018. In order to avoid individual potential conflicts of interest, some members of the Supervisory Board did not participate in discussions of certain items of the agendas in the year 2018: Dr. Jürgen Hambrecht and Dr. Bernd Pischetsrieder left the room during the Supervisory Board meetings for the legal status reports in particular, when legal proceedings in connection with diesel exhaust emissions were discussed. As a result, in compliance with the goals of the Supervisory Board, there were no potential conflicts of interest during the year under review for at least half of the members representing the shareholders and for at least 15 members of the entire Supervisory Board.

In financial year 2018, as scheduled, the Supervisory Board once again had an externally moderated efficiency review conducted, thus complying with the requirements of its rules of procedure and the German Corporate Governance Code for the regular execution of an efficiency review. The results of the efficiency review, which the Supervisory Board dealt with intensively at its meeting on February 13, 2019, confirm the professional, very good and very trusting cooperation within the Supervisory Board and with the Board of Management. There was no fundamental need for change, but individual suggestions were made and are implemented.

Law for the equal participation of women and men in management positions

For supervisory boards of listed companies subject to parity codetermination, like that of Daimler AG, the German Stock Corporation Act prescribes a binding gender ratio of at least 30 % women. The ratio is to apply to the entire supervisory board. If the side of the supervisory board representing the shareholders or the side representing the employees objects to the chairman of the supervisory board before the election about the application of the ratio to the entire supervisory board, the minimum ratio is to apply separately to the shareholders’ side and to the employees’ side for that election.

As of December 31, 2018, the shareholders’ side of the Supervisory Board of Daimler AG is composed of 30 % women (the members Sari Baldauf, Petraea Heynike and Marie Wieck) and 70 % men. On the employees’ side, the proportions as of that date are 30 % women (the members Elke Tönjes-Werner, Sibylle Wankel and Dr. Sabine Zimmer) and 70 % men. The Supervisory Board as a whole therefore also fulfills the statutory quota.

In its meeting on December 12, 2018, the Supervisory Board discussed the specific proposals for candidates to be elected at the 2019 Annual Shareholders’ Meeting and decided, upon the recommendation of the Nomination Committee, to propose at the 2019 Annual Shareholders’ Meeting that Joe Kaeser and Dr. Bernd Pischetsrieder be once again elected to the Supervisory Board. If the proposed candidates are elected, the statutory quota for women will remain fulfilled both on the shareholder side and for the Supervisory Board as a whole, provided there are no other changes.

For the composition of the Board of Management, the Supervisory Board set the target in December 2016 of at least 12.5 % women, which is applicable until December 31, 2020.

Corporate governance at Daimler is described in detail in the declaration on corporate governance combined with the Corporate Governance Report and in the Remuneration Report of this Annual Report.

The work of the committees

The Presidential Committee convened five times last year. It dealt primarily with personnel matters of the Board of Management, remuneration questions and corporate governance issues. As in previous years, compliance targets constituted part of the individual target agreements of the members of the Board of Management. Once again, additional non-financial targets were also included as criteria in the target agreements. For the past financial year, they were the further development and permanent establishment and consideration of the corporate values integrity and diversity with regard to increasing the proportion of women in management positions, the maintenance and enhancement of a high level of employee satisfaction and of high product quality. Details of the changes to the remuneration system for the Board of Management, which apply as of January 1, 2019, are presented on Remuneration Report.

The Audit Committee met six times in 2018. Details of those meetings are provided in a separate report of that committee.  (See Report of the Audit Committee)

The Nomination Committee convened for two meetings in 2018. In particular, the Committee prepared recommendations for the Supervisory Board’s proposals to be made at the Annual Shareholders’ Meeting in 2019 on the candidates for election to the Supervisory Board. Among other things, and taking into consideration all circumstances of each individual case, the proposals are oriented towards the Daimler Group’s interests and aim to fulfill the overall qualifications profile, including expertise profile and diversity concept, for the entire Supervisory Board.

There was no occasion to convene the Mediation Committee during the reporting period.

Personnel changes in the Supervisory Board and the Board of Management

Following the proposal of the Supervisory Board, the Annual Shareholders’ Meeting on April 5, 2018 elected Sari Baldauf and Dr. Jürgen Hambrecht once again and Marie Wieck for the first time as members of the Supervisory Board representing the shareholders, for the period until the end of the Annual Shareholders’ Meeting that decides on ratification of board members’ actions for financial year 2022. Effective at the end of the Annual Shareholders’ Meeting on April 5, 2018, Andrea Jung on the shareholders’ side and Valter Sanches and Jörg Spies on the employees’ side stepped down from the Supervisory Board. In the elections of the employee representatives held before the Annual Shareholders’ Meeting, Raymond Curry and Dr. Sabine Zimmer were elected as members of the Supervisory Board for the first time in addition to the reelected employee representatives. At the end of 2018, Wolfgang Nieke stepped down from the Supervisory Board on the employees’ side and was replaced by Michael Häberle, a replacement member elected for him.

In the Supervisory Board meeting on February 9, 2018, Renata Jungo Brüngger was reappointed as a member of the Board of Management Member with responsibility for “Integrity and Legal Affairs,” effective as of January 1, 2019 for a period of further five years.

In the Supervisory Board meeting in September 2018, the Supervisory Board approved the resignation of Dr. Dieter Zetsche, in consultation with the Supervisory Board, as a member of the Board of Management of Daimler AG and as Head of Mercedes-Benz Cars effective at the end of the Annual Shareholders’ Meeting in 2019, as well as the appointment of Ola Källenius as Chairman of the Board of Management of Daimler AG and as Head of Mercedes-Benz Cars for a new term of office of five years starting at the end of the Annual Shareholders’ Meeting in 2019. It was also decided that Markus Schäfer would succeed Ola Källenius as Head of Group Research and Mercedes-Benz Cars Development on the Board of Management of Daimler AG with effect from that date.

In October 2018, Bodo Uebber, responsible for “Finance & Controlling/Daimler Financial Services”, stated that he did not wish to extend his current appointment, which expires in December 2019.

In its meeting in December 2018, the members of the Supervisory Board representing the shareholders decided, on the basis of a recommendation by the Nomination Committee, to propose the reelection to the Supervisory Board of Joe Kaeser and Dr. Bernd Pischetsrieder at the Annual Shareholders’ Meeting in 2019.

In the Supervisory Board meeting on February 13, 2019, Harald Wilhelm was appointed to the Board of Management of Daimler AG for a period of 3 years with effect as of April 1, 2019. Bodo Uebber will resign from the Board of Management of Daimler AG with effect as of the end of the Annual Meeting 2019 and with effect as of the same time, Harald Wilhelm will take over the responsibility for “Finance & Controlling/Daimler Financial Services”.

Furthermore, Britta Seeger was reappointed to the Board of Management of Daimler AG as the member responsible for “Mercedes-Benz Cars Marketing and Sales” for a further five years effective as of January 1, 2020.

Audit of the company and consolidated financial ­statements

The financial statements of Daimler AG and the combined management report for the Company and the Group for 2018 were duly audited by KPMG AG, Wirtschaftsprüfungsgesellschaft, Berlin, and were given an unqualified audit opinion. The same applies to the consolidated financial statements for 2018 prepared according to IFRS. On the basis of a voluntary review of the contents of the non-financial report decided upon by the Supervisory Board, the non-financial report for financial year 2018 was reviewed by KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, within the framework of a limited assurance engagement and was issued with a limited assurance in accordance with ISAE 3000.

In a meeting held on February 5, 2019 attended by the external auditors, the Supervisory Board discussed, took note of and approved the preliminary key figures of the annual company and consolidated financial statements for 2018 and the proposal on the appropriation of profit to be made at the 2019 Annual Shareholders’ Meeting. The Supervisory Board determined that no objections were to be made to their publication. The preliminary key figures for the year 2018 as well as the proposal on the appropriation of profit were announced at the Annual Press Conference on February 6, 2019.

In the meeting held on February 13, 2019, the Supervisory Board dealt with the annual company financial statements, the annual consolidated financial statements and the combined management report for Daimler AG and the Daimler Group, each of which had been issued with an unqualified audit opinion by the independent auditors, as well as with the reports of the Audit Committee and the Supervisory Board, the corporate government statement combined with the corporate governance report, the remuneration report, the non-financial report issued with a limited assurance in accordance with ISAE 3000, and the proposal on the appropriation of profit. In preparation, the members of the Supervisory Board had been provided with comprehensive documentation including the Annual Report with the consolidated financial statements according to IFRS, the combined management report for Daimler AG and the Daimler Group, the declaration on corporate governance combined with the corporate governance report, the remuneration report, the non-financial report, the annual company financial statements of Daimler AG, the proposal of the Board of Management on the appropriation of profit, the audit reports of KPMG AG Wirtschaftsprüfungsgesellschaft on the annual company financial statements of Daimler AG and the consolidated financial statements, each including the combined management report, and the Internal Control System (ICS), as well as drafts of the reports of the Supervisory Board and of the Audit Committee.

The Audit Committee and the Supervisory Board dealt with those documents in detail and discussed them intensively in the presence of the independent auditors, who reported on the results of their audit and in particular on the key audit matters and the respective audit procedure including the conclusions drawn and the voluntary review of the non-financial statement within the framework of a limited assurance engagement, and who were available to answer supplementary questions and to provide additional information. Following the final results of the review by the Audit Committee and its own review, the Supervisory Board declared its agreement with the results of the audit by the external auditors. It determined that no objections were to be raised and approved the financial statements and the combined management report as presented by the Board of Management. The company financial statements of Daimler AG for the year 2018 were thereby adopted. On this basis, the Supervisory Board consented to the proposal made by the Board of Management on the appropriation of distributable profit. Furthermore, the Supervisory Board approved the non-financial report and the report of the Supervisory Board, the declaration on corporate governance combined with the corporate governance report, and the remuneration report. Due to the postponement of the Annual Shareholders’ Meeting until May 22, 2019 in connection with Project Future, no proposed decisions were approved for the items of the agenda of the 2019 Annual Shareholders’ Meeting, apart from the proposal on the appropriation of profit.

Appreciation

The Supervisory Board thanks all the employees and the management of the Daimler Group for their committed contributions in the challenging environment of the year 2018.

The Supervisory Board also thanks Andrea Jung, Valter Sanches, Jörg Spies and Wolfgang Nieke, who closely supported the Daimler Group through their committed work in the Supervisory Board and who last year stepped down from the Supervisory Board.

Stuttgart, February 2019

The Supervisory Board

Dr. Manfred Bischoff
Chairman

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