The compensation of Supervisory Board members is governed by E.ON AG’s Articles of Association. In accordance with German law and the Code’s recommendations, the compensation system takes into consideration Supervisory Board members’ responsibilities and scope of duties as well as the Company’s financial situation and business performance. In accordance with the Code, Supervisory Board members receive fixed annual compensation as well as two variable, performancebased compensation components. The short-term component is linked todividends. The long-term component is linked to the three-year average of the E.ON Group’s consolidated net income.

 

Fixed compensation: in addition to being reimbursed for their expenses including the value-added tax due on their compensation, Supervisory Board members receive a fixed amount of EUR55,000.00 for each financial year.

 

Short-term variable compensation: in addition, Supervisory Board members receive variable compensation of EUR115.00 for each EUR0.01 of dividend paid out to shareholders in excess of EUR0.10 per no-par share for the previous financial year.

 

Long-term variable compensation: furthermore, Supervisory Board members receive variable compensation of EUR70.00 for each EUR0.01 of the three-year average of the E.ON Group’s consolidated net income per share in excess of EUR2.30.

 

Individuals who were members of the Supervisory Board or any of its committees for less than the entire financial year receive pro-rata compensation for each full or partial month of service. Fixed compensation is payable after the end of the financial year. Variable compensation components are payable after the Annual Shareholders Meeting, which votes to formally approve the acts of the members of the Supervisory
Board in the previous financial year.

 

The Chairman of the Supervisory Board receives a total of three times the above-mentioned compensation; the Deputy Chairman and every chairman of a Supervisory Board committee receive a total of twice the above-mentioned amount; and each committee member receives a total of one-and-ahalf times the above-mentioned compensation.

 

Supervisory Board members are paid an attendance fee of EUR1,000.00 per day for meetings of the Supervisory Board or its committees. Finally, the Company has taken out liability insurance for the benefit of Supervisory Board members to cover the statutory liability related to their Supervisory Board duties. If an insurance claim is granted, this insurance includes a deductible equal to 50 percent of a Supervisory Board member’s annual fixed compensation.

 

Fixed annual compensation of EUR55,000.00 is intended to take into account the independence of the Supervisory Board required to fulfill the supervisory function. In addition, there are a number of duties that Supervisory Board members need to perform irrespective of the Company’s financial performance. For this reason, a minimum compensation should be guaranteed even during times that are difficult for the Company, when the work of the Supervisory Board is usually particularly challenging. On the other hand, dividend-based compensation is designed to ensure that the Supervisory Board’s compensation interests are, to some extent, aligned with shareholders’ return expectations. Finally, since another part of variable compensation is linked to the three-year average of consolidated net income, the Supervisory Board’s compensation also contains a component that is related to the Company’s long-term performance.