Declaration of Compliance 2012
Declaration of Compliance with the German Corporate Governance Code, made in Accordance with Article 161 of the German Stock Corporation Act, by the Board of Management and the Supervisory Board of E.ON SE
The Board of Management and the Supervisory Board hereby declare that E.ON SE will comply with exception of the recommendation in item 4.2.3 para 3 sentence 3 with the recommendations contained in the German Corporate Governance Code (“the Code“), dated May 15, 2012, prepared by the Government Commission appointed by the German Minister of Justice and published in the official section of the Bundesanzeiger.
The Board of Management and the Supervisory Board furthermore declare that E.ON SE has been in compliance with the recommendations contained in the Code, dated May 26, 2010, prepared by the Government Commission appointed by the German Minister of Justice and published in the official section of the electronic version of the Bundesanzeiger since the last annual declaration on December 12, 2011 until the updating of the declaration on March 13, 2012 with the exception of the recommendation contained in item 5.4.6 para. 2 sentence 1 of the Code and since March 2012 additionally with the exception of the recommendation contained in item 4.2.3 para 3, sentence 3 of the Code.
With reference to the derogation from the recommendation in item 4.2.3 para. 3, sentence 3 of the Code:
According to item 4.2.3 para. 3, sentence 3 of the Code, retroactively changing performance targets or benchmark parameters when determining the compensation of the Board of Management shall be excluded. In March 2012, the Company's Supervisory Board decided to reduce the premium on the weighted average annual cost of capital (WACC) in the terms and conditions of the 6th tranche of the E.ON Share Performance Plan issued in 2011. This change was due to the fact that, compared with the return expected by the Supervisory Board when it adopted its resolution on the performance rights to be awarded in March 2011, the E.ON Group's longer-term return expectation had decreased significantly as a result of the nuclear phase-out decided by the German government as well as other regulatory interventions and a substantial deterioration of the general economic environment. Because of this subsequent, unforeseeable development, it has become much more unlikely that the performance hurdle for the 6th tranche will be reached. The purpose of reducing the performance hurdle is to maintain the Plan's incentive effect as originally intended by the Supervisory Board.
With reference to the derogation from the recommendation in item 5.4.6 para 2 of the Code:
According to item 5.4.6 para. 2 of the Code, the members of the Supervisory Board shall receive fixed as well as a performance-related compensation. The Annual Shareholders’ Meeting in May 2011 has decided to implement a new compensation scheme which comprises a fixed compensation only, and to amend the company’s Articles of Associations accordingly. This new compensation structure applies to the fiscal year 2011 for the first time. The performance related compensation shall be dispensed to further strengthen the Supervisory Board’s independence. Also, the new compensation system takes account of current developments in the corporate governance discussion.
(Following the new version of the Code on May 15, 2012 this recommendation has been deleted, therefore no future derogation has to be declared).
Düsseldorf, December 10, 2012
For the Supervisory Board of E.ON SE
(Chairman of the Supervisory Board of E.ON SE)
For the Board of Management of E.ON SE
Dr. Johannes Teyssen
(Chairman of the Board of Management of E.ON SE)