governance and sustainability presentation · 1/28/2020 · sustainability presentation dr....
TRANSCRIPT
Governance and Sustainability Presentation
Dr. Karl-Ludwig Kley – Chairman of the Supervisory Board
January 2020
Agenda
1. Supervisory Board, Committee Work and Remuneration System
2. Environment and Social Impact
3. Back Up
E.ON’s two-tier governance structure
3
• German Co-Determination Act not applicable to SE, instead agreement on the involvement of employees
• More flexibility regarding size and composition of Supervisory Board, especially regarding internationality of employee representatives
Special features of an SE Supervisory Board
AnnualShareholders
Meeting
Board ofManagement
SupervisoryBoard
appoints, controls, advises
regularly reports to
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
Flexibility in E.ON’s Supervisory Board size
4
20 Members
12 Members
18 Members
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
14 Members
Temporary extension to fulfill diversity
requirements
Temporary extension due to innogy
integration
Reduction to 12 members according
to articles of association
2018 2019 20232016 2017
12 Members
E.ON Supervisory Board –Experienced, diverse and independent
5
20 Board Members
Age Nationality
Member of the E.ON Supervisory Board for
Work experience gained1
6
12
2
1 – 5 Years<1 Year >5 Years
4 4
2
>5 Other Companies
1 Other Company 2 – 5 Other Companies
10
10
Shareholder Representatives
Employee Representatives
1. Only Shareholder Representatives; other companies outside E.ON Group
55%
35%
10%
>65 <55
55-65
65%
35%
German
Other Nationalities
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
E.ON Supervisory Board Shareholder representatives
6
Erich ClementiDeputy Chairman Born 1958, ItalianMember since 2016Expert in digitaltransformation and strategy
Andreas SchmitzBorn 1960, GermanMember since 2016Particular expertise in financial analysis and capital markets
Klaus FröhlichBorn 1960, GermanMember since 2018Expert in brand and product strategies and digitization; particular focus on e-mobility
Dr. Karen de SegundoBorn 1946, DutchMember since 2008In-depth knowledge of energy market and regulated industries experience
Carolina Dybeck HappeBorn 1972, SwedishMember since 2016Profound experience in finance and digital transformation of products and services
Ewald WosteBorn 1960, GermanMember since 2016Extensive expertise in the energy sector, ESG expert
Ulrich GrilloBorn 1959, GermanMember since 2019Excellent network in German industry as well as management and strategy expertise
Dr. Rolf Martin SchmitzBorn 1957, GermanMember since 2019Extensive management and strategy expertise paired with technical knowledge
Deborah WilkensBorn 1971, United States of AmericaMember since 2019 Proven capital market expert specialized in the energy sector
Dr. Karl-Ludwig KleyChairman of the Supervisory BoardBorn 1951, GermanMember since 2016Extensive leadership and supervisory board experience
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
E.ON Supervisory Board Employee representatives
7
Clive BrouttaBorn 1960, BritishMember since 2014Expert in HSE and Sustainability
Fred SchulzBorn 1962, GermanMember since 2014Experience in grid operations and HR management
Szilvia Pinczésné MártonBorn 1969, HungarianMember since 2018In-depth knowledge of the network business and co-determination matters
Elisabeth WallbaumBorn 1975, GermanMember since 2016Expertise in Energy generation and IT-based process control
Eugen Gheorghe LuhaBorn 1957, RomanianMember since 2012Profound expertise in the gas business
Albert ZettlBorn 1966, GermanMember since 2016Background in the fields of grid management, grid distribution
Monika KrebberBorn 1962, GermanMember since 2019Profound knowledge of business administration and supervisory board experience
Stefan MayBorn 1970, GermanMember since 2019Technical expertise as well as extensive knowledge in co-determination
René PöhlsBorn 1970, GermanMember since 2019 Expert in network operation, HR and experience in co-determination
Andreas ScheidtDeputy Chairman of the Supervisory BoardBorn 1964, GermanMember since 2015In-depth knowledge of the energy business
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
Terms of Supervisory Board members
8
2021 2022 2023
Dr. Karl-Ludwig Kley
Klaus Fröhlich
Erich Clementi
Dr. Karen de Segundo
Andreas Schmitz
Ewald Woste
2016
Carolina Dybeck Happe
2017 202020192018
Ulrich Grillo 1
Dr. Rolf Martin Schmitz 1
Deborah Wilkens 1
1. Appointed by court
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
Familiar with legal and compliance as well as sustainability specifically in the dimensions of environmental protection, social concerns and governance (ESG), IT and HR
Skills profile of shareholder representatives ensures superior governance and committee work
9
Self imposed composition targets2
• Independence
• Maximum number of terms
• Sufficient time
• Etc.
• International experience
• Representation of women
• Age diversity
Diversity ConceptExperience in companies or other large organizations,
familiar with capital markets and/or a board member1
of listed organizations
Leadership Experience
Familiar with innovation, disruption and digitization as well as associated new business models and cultural change
Innovation & Digitization
Specific expertise in businesses and markets relevant to E.ON
Markets & Businesses
Expertise in the field of accounting and risk management as well as in auditing of financial statements
Risk & Accounting
Legal & Compliance
Skills Profile
1. Member of Supervisory Board or Executive Board 2. According to Rules of Procedure for the Supervisory Board of E.ON SE
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
Competencies of shareholder representatives reflection of skills profile
10
Regulated industries
Sales and retail business
Accounting, risk management and auditing of financial statements
Relevant customer sectors
New technology
Energy sector
Capital and financial markets expertise
Experience as management or supervisory board member (strategic expertise)
Leadership experience
Sustainability / ESG
IT
Independence
International experience
HR
Legal and compliance
New business models / cultural change
Innovation, disruption, digitization
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
Efficient cooperation in board committees
11
Presidial Committee• Prepares management personnel decisions and management remuneration,
approves investment, M&A and financing transactions• Advises the Board of Management on e.g. strategic developments
• Dr. Karl-Ludwig Kley, Chairman• Erich Clementi• Ulrich Grillo
• Andreas Scheidt, Deputy Chairman
• Fred Schulz• Albert Zettl
Members
Nomination Committee• Recommends candidates for election to the Supervisory Board by the Annual
Shareholders Meeting
• Dr. Karl-Ludwig Kley, Chairman• Erich Clementi, Deputy Chairman• Dr. Karen de Segundo
Members
• Dr. Karen de Segundo, Chair• Klaus Fröhlich• Ewald Woste
Innovation and Sustainability Committee• Advises the Management on innovation and disruption/ new businesses• Advises the Management relating to ESG issues
• Stefan May, Deputy Chairman• Clive Broutta• Eugen-Gheorghe Luha
Members
Audit and Risk Committee• Monitors the accounting process and internal control systems• Examines effectiveness of internal control and risk management systems
• Andreas Schmitz, Chairman• Carolina Dybeck Happe• Deborah Wilkens
• Fred Schulz, Deputy Chairman• René Pöhls• Elisabeth Wallbaum
Members
Shareholder Representatives Employee Representatives
For an interim phase during the integration process, all committees (except nomination committee) have been extended to six members
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
High level of dedication of Supervisory Board members
12
Presidial Committee
Investment and Sustainability Committee
Nomination Committee
Audit and Risk Committee
8 Meetings in 2019
4 Meetings in 2019
5 Meetings in 2019
No Meetings in 2019
6 Meetings in 2019
+
+
+
+
Executive Board:26 Meetings in 2019
Supervisory Board
1. Committee Member since March 12, 2019 2. Committee Member since October 2, 2019 3. Committee Member until October 9, 2019 4. Once as a guest
Attendance of Supervisory Board and committee members in 2019
* Member since September 24, 2019 ** Member since October 1, 2019
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
13
Efficiency review to continuously improve Supervisory Board work
• The Supervisory Board conducts an efficiency review of its work on a yearly basis, in line with the German Corporate Governance Codex.
• All Supervisory Members fill out a detailed online questionnaire to provide feedback.
• The Chairman conducts bilateral meetings with each Supervisory Board Member on a two year basis and follows up on their remarks.
• The review is considered a very valuable tool as it enables open discussion, mitigates conflicts and builds the basis for continuous improvement.
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
Remuneration system closely aligns management and shareholders interest
14
• New remuneration system approved by AGM 2016 (91% approval); in place since January 1st, 2017.
• Both variable compensation elements were adjusted and share ownership guidelines were introduced.
• The level of base salary and total compensation as well as the level of pension benefits remained constant.
New Compensation Elements
Share Ownership Guidelines (SOG)
Pension
Long-Term Incentive (LTI)
Bonus (STI)
Base Salary
• Mandatory share ownership:• CEO: 200% of base salary• Other board members: 150% of base
salary
• Criteria: relative TSR vs. STOXX Europe 600 Utilities and absolute share price
• Payout: Cash• Cap: 200% of target value• Zero payout at underperformance
• Yearly contribution max. 21% of pensionable income
• Criteria: EPS, individual and team performance
• Payout: Cash • Cap: 200% of target value• Zero payout at underperformance
+
+
+
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
The short-term bonus (STI)
15
The STI combines the group’s financial target (EPS) with individual targets.
EPS is the basis for dividend payout, thus closely aligns executive incentives and shareholder interest. EPS is one of E.ON’s key performance indicators, reflects E.ON’s business strategy appropriately and serves as an
indicator of E.ON’s profitability. The multiplier ensures the flexibility to adjust payouts according to individual performance.R
atio
nal
e
STI – Basic Functionality
STITarget Value
Cash Payout
STI Actual Value(Cap at 200%
of Target Value)
x =
Actual EPS vs. Budget1
Company Performance
Target Achievement
Team targets & indiv. targetsMultiplier from
0.5 – 1.5
Individual Performance
x
1. The EPS target for each year is set by the Supervisory Board, taking into account the approved budget.
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
The long-term incentive (LTI)
16
The Performance Share Plan is based on the comparison of the relative total shareholder return (TSR) with an industry index.
Performance Share Plan – Basic Functionality
The Performance Share Plan is aligned with the capital market perspective by focusing on share price development as well as dividends paid and strengthens shareholder-oriented culture.
Relative TSR is a well-established and accepted performance measure from an investor’s point of view, focusing on absolute share price performance and comparison with peers. R
atio
nal
e
Initial number of granted share units
Final payout in cash
(Cap: 200% of target value)
Share price+
dividendsx xTSR of the E.ON share compared
to the companies of the STOXX® Europe 600 Utilities index
(Cap at 150%)
Relative TSR performance
Target Achievement over 4 Years
=
LTI target value divided by fair
market value per share1
1. The fair market value per share unit at grant date is determined by applying methods accepted in financial mathematics, taking into account the expected future payout, and hence, the volatility and risk associated with performance share plan.
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
E.ON’s Supervisory Board assumes responsibility for sustainability
17
Sustainability Department
Sustainability Council
Board of Management CEO/CSO 1 Supervisory Board incl. Innovation and Sustainability Committee
chairs chairs
Representatives
1. Chief Sustainability Officer
Decentral Level
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
The Supervisory Board addresses sustainability topics in each meeting
The Supervisory Board established the Innovation and Sustainability Committee
to further focus the Supervisory Board’s work on ESG topics and
to advise the Board of Management on ESG topics
The Supervisory Board approves ESG targets of the management board
E.ON supporter of TCFD1 since 2019
18
Sustainability Governance
• Board member Johannes Teyssen as Chief Sustainability Officer, supported by Sustainability Council
• Innovation and sustainability committee was established in October 2019
Sustainability Strategy
• Fully focused on the new energy world, enabler of the energy transition
• Unique strategic position with focus on regulated networks
• We help our customers to significantly reduce CO₂
Risk Management
• Assessment of environmental, social and governance (ESG) risks alongside financial risks
• Risk management will be further systemized in accordance to TCFD recommendations in 2020
Climate targets
• Reduce E.ON’s absolute CO₂ footprint by 30% and CO₂ intensity by 50% by 2030
• E.ON to become carbon neutral by 2050
Risk Management
Strategy
Governance
Metrics& Targets
1.Task Force on Climate-related Financial Disclosures (TCFD)
Based on Core Elements of Recommended Climate-Related Financial Disclosures by Task Force on Climate-related Financial Disclosures
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
Creation of a work environment that protects the health and safety of customers and employees
Responsible social business practices
19
Health and safety Establishing a Caring Culture
Variety of nationalities, cultures, generations and genders in management & workforce
Diversity and inclusion
~25% female representation of first management level below board of new E.ON
Commitment to respect human rights, uphold labour standards, and fight against corruptionHuman Rights
100% code of conduct awareness of all employees
Over 100 different nationalities, different cultures and 5 generations in the workforce
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
E.ON as a leading sustainable company
20
E.ON Board committed to UN Sustainable Development Goals
E.ON is supporter of the 10 principles of the UN Global Compact
Signatory since 2005
1.-2. Human rights
3.-6. Labour
7.-9. Environment
10. Anti-corruption
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
E.ON’s sustainability awards, ratings and rankings
21
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Overall ESG Score = 81 (Leader Group)Relative Position 11 out of 192
E.ON is index member1, i.e. one of the 120 most advanced companies in Europe + Eurozone
Result: AA
Rating: „C+“
CDP Score: BSector Average: C
E.ON ranks 4th in the Green Utilities Report from “Energy Intelligence (EI) Group”
E.ON ranks 6th out of 30
Overall ESG Score: 3.2 Sub Sector Average Multiutilities: 2.8Industry Average Utilities: 2.7
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1. Vigeo/EIRIS was acquired by Moody’s in 2019
Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
22
E.ON is well positioned to succeed in the new energy world with effective governance structures
E.ON is the enabler of a sustainable future of energy
The Supervisory Board actively controls and guides E.ON
E.ON‘s Supervisory Board is qualified, experienced and highly committed
E.ON’s Supervisory Board assumes responsibility for sustainability
Key takeaways Supervisory Board, Committee Work and Remuneration System
Environment and Social Impact
Back up
Back upSupervisory Board remuneration in 2018
• The Chairman of the Supervisory Board receives fixed compensation of €440,000.
• The Deputy Chairmen, €320,000.
• Other members of the Supervisory Board receive compensation of €140,000.
• The Chairman of the Audit and Risk Committee receives an additional €180,000.
• The members of the Audit and Risk Committee, an additional €110,000.
• Other committee chairmen receive an additional €140,000; committee members, an additional €70,000.
24
1
Back upCV‘s of shareholder representatives
25
The supervisory board seats are marked as follows: * Membership in other statutory supervisory boards, + Membership in comparable German and foreign supervisory bodies of corporations 1) Listed Company
Dr. Karl-Ludwig KleyChairman of the Supervisory Board
Born 1951, GermanyMember since 2016
Other supervisory board seats
In 1982, Dr. Kley began his career with Bayer AG, where heinitially worked in Corporate Finance and later becameassistant to the Chairman of the Management Board. Hewas Chief Financial Officer of Bayer in Japan, Head of thePharmaceutical Division Sales and Marketing Overseas,Head of the Pharmaceutical Division of Bayer’s Italiansubsidiary and later served as Head of Finance and InvestorRelations of Bayer AG until 1998. From 1998 to 2006, Dr.Kley was a member of the Executive Board of DeutscheLufthansa AG, where he served as Chief Financial Officer,before joining Merck KGaA as a member and Vice Chairmanof the Executive Board in 2006. From April 2007 until April2016 he was Chairman of the Executive Board and CEO ofMerck KGaA.
* BMW AG 1)
* Deutsche Lufthansa AG (Chairman) 1)
Erich ClementiDeputy Chairman of the Supervisory Board
Born 1958, ItalyMember since 2016
Mr. Clementi began his career with IBM in Italy in 1984.Initially, he held various positions in IBM’s sales, marketing& engineering functions in Eastern Europe and Germany,before he was appointed Vice President Enterprise SystemsGroup for Europe, the Middle East and Africa in the UnitedKingdom. In 2003, he moved to the United States, where hefirst held the position of General Manager, was thenappointed Vice President Strategy & General ManagerEnterprise Initiatives and, prior to his most recent position,Senior Vice President & Group Executive Global TechnologyServices in the United States. From 2015 to 2018,Mr. Clementi was Senior Vice President IBM Global Marketsand Chairman Europe.
None
Other supervisory board seats
Mr. Fröhlich joined the drive development of BMW AG inJuly 1987 as a development engineer. In 1993, he tookover the management of the basic development of the V8engines. From 1995, he was responsible for the projectmanagement of the BMW engine programs for the vehiclesof the Rover Group. From 1996 to 1998, Mr. Fröhlichworked for the BMW subsidiary Rover Group in the UK asChief Engineer for the propulsion of future Land Rovervehicles. In 1999, he moved back to the enginedevelopment department of BMW AG in Munich andmanaged various functions of the Otto engine development.From 2005 to 2007, he was responsible for cross-brandproduct planning and subsequently for the brand andproduct strategies of the BMW Group. In 2012, he headedthe small and mid-sized vehicle model series. On December9, 2014, Klaus Fröhlich was appointed to the Board ofManagement of BMW AG, responsible for development.
None
Other supervisory board seats
Klaus Fröhlich
Born 1960, GermanyMember since 2018
Back upCV‘s of shareholder representatives
26
The supervisory board seats are marked as follows: * Membership in other statutory supervisory boards, + Membership in comparable German and foreign supervisory bodies of corporations 1) Listed Company
Ulrich Grillo
Born 1959, GermanyMember since 2019
Other supervisory board seats
Mr. Grillo worked for Arthur Andersen & Co. GmbH. In 1989he joined A. T. Kearney GmbH and from 1993 to 2001 heworked for Rheinmetall-Group. From 2001 to 2004, Mr.Grillo was a member of the board of management of Grillo-Werke AG. In August 2004, Ulrich Grillo was appointedchairman of the board of management of Grillo-Werke AG.From 2016 to 2019 Mr. Grillo was a member of thesupervisory board of innogy SE and of its nominationcommittee as well as its executive committee. Since 2016,he is a member of the Supervisory Board of Rheinmetall AGand its Chairman since 2017.
* Rheinmetall AG1)
+ Grillo Zinkoxid GmbH+ Zinacor S.A.
Carolina Dybeck Happe
Born 1972, SwedenMember since 2016
At the beginning of her career, Ms. Dybeck Happe heldvarious positions with EF Education First Ltd. in the UnitedStates, Switzerland and Russia. From 2000 to 2002, shewas Chief Financial Officer of Establish AB in Sweden. In2002, she joined ASSA ABLOY in Germany as ChiefFinancial Officer for the German-speaking regions; in 2007,she went to ASSA ABLOY in the United Kingdom, whereshe served as Chief Financial Officer for Europe, the MiddleEast and Africa. In 2011 she went to Trelleborg AB inSweden, where she was Chief Financial Officer. Since 2012she served as Chief Financial Officer at ASSA ABLOY AB, apublicly listed company in Sweden. Since 2019 she wasChief Financial Officer of A.P. Moller - Maersk A/S. End ofNovember 2019, General Electric named Ms. DybeckHappe as the company’s CFO, effective in early 2020.
+ Schneider Electric SE
Other supervisory board seats
Mr. Schmitz began his career with HSBC Trinkaus &Burkhardt AG in 1989. Until 2000, he held various positionsin the corporate clients business and in investment banking.From 2000 to 2002, he was a member of the extendedmanagement board, in charge of Investment Banking and,since 2001, additionally in charge of Debt Capital Markets.From 2002 to 2004, he was a personally liable partner,responsible for Corporate & Investment Banking and DebtCapital Markets, before he was appointed Spokesman ofthe Personally Liable Partners. From 2006 to 2015, he wasChairman of the Management Board, and since June 2015,he has been Chairman of the Supervisory Board of HSBCTrinkaus & Burkhardt AG.
* HSBC Trinkaus & Burkhardt AG (Chairman)1)
* Scheidt & Bachmann GmbH (Chairman)
Other supervisory board seats
Andreas Schmitz
Born 1960, GermanyMember since 2016
Back upCV‘s of shareholder representatives
27
Dr. Rolf Martin Schmitz
Born 1957, GermanyMember since 2019
Other supervisory board seats
After working for STEAG AG in Essen and VEBA AG inDüsseldorf, Mr. Schmitz became a member of the ExecutiveBoard of rhenag Rheinische Energie AG in Cologne,Germany, in 1998 before serving on the Executive Board ofThüga AG in Munich, Germany, from 2000 to 2004. He wasthen Chairman of the Management Board of E.ONKraftwerke GmbH in Hanover, Germany, until September2005 and later CEO of RheinEnergie AG in Cologne. He hasbeen a member of the Executive Board of RWE AG sinceMay 2009, Chairman (CEO) since October 2016 andadditionally Labor Director of RWE AG since May 2017.
* Amprion GmbH* RWE Generation SE (Chairman)* RWE Power AG (Chairman)* RWE Supply & Trading GmbH* TÜV Rheinland AG
Dr. Karen de Segundo
Born 1946, NetherlandsMember since 2008
Dr. de Segundo began her career in 1971 when she joinedthe Royal Dutch / Shell Group, where she initially pursuedan international commercial career in the gas and powerbusiness as well as in sales and marketing of oil products.She held various positions in five countries before she wasappointed as a member of the Shell Brazil ManagementBoard in charge of oil products in 1990. In 1996, Dr. deSegundo became External Affairs Director for the ShellGroup. In 1998, she was appointed Chief Executive Officerof Shell Gas & Power and Chairman of Shell Coal; and fromthe year 2000 until 2005, when she left Shell, she served asChief Executive Officer at Shell Renewables and Presidentof Shell Hydrogen.
None
Other supervisory board seats
Deborah Wilkens started her career in 1993 working for PriceWaterhouse Privatisation Service GmbH in Berlin. In 1997, shejoined Deutsche Bank in London as a Manager in the Pan-European Utilities Research Team. From 1999 to 2000, she wasVice President of Equity Research for Pan-European EnergyUtilities Research Team at Credit Suisse First Boston in London.Subsequently, Ms. Wilkens was with Goldman SachsInternational in London from 2000 to 2016. As of 2003 shewas Managing Director in the field of stock analysis, followedby the position as Head of stock analysis for European energysupply companies. In 2014, Ms. Wilkens became Head of stockanalysis for European energy and raw materials and responsiblefor the sector research teams including utilities, oil & gas, oilservices, metals, mining, steel and paper and pulp sector. SinceJune 2016, Ms. Wilkens has been a management consultant..
None
Other supervisory board seats
Deborah Wilkens
Born 1971, USAMember since 2019
+ Kärntner EnergieholdingBeteiligungs GmbH
+ KELAG-KärntnerElektrizitäts-AG
+ Jaeger-Gruppe (Chairman)
The supervisory board seats are marked as follows: * Membership in other statutory supervisory boards, + Membership in comparable German and foreign supervisory bodies of corporations 1) Listed Company
Back upCV‘s of shareholder representatives
28
Ewald Woste
Born 1960, GermanyMember since 2016
Other supervisory board seats
Mr. Woste began his professional career as assistant to themanagement of heroal, before joining Benteler AG as acontroller in 1989. He has worked in the energy industrysince 1992, when he joined the municipal utility ofPaderborn. From 1998 to 2003, he was Managing Directorof Städtische Werke Nürnberg GmbH and member of theboards of management of Verkehrsaktien-gesellschaftNürnberg and N-ERGIE Aktiengesellschaft. In 2004, he wasappointed Chairman of the Board of Management of MainovaAG, and from 2007 to 2014, he served as Chairman of theBoard of Management of Thüga Aktiengesellschaft. From2010 to 2014, he was President of BDEW Bundesverbandder Energie- und Wasserwirtschaft e.V. (German Associationof Energy and Water Industries). Since 2015, he has beenworking as a management consultant.
* Bayernwerk AG* GASAG AG* GreenCom Networks AG
+ Energie Steiermark AG+ Deutsche Energie Agentur GmbH (dena)
The supervisory board seats are marked as follows: * Membership in other statutory supervisory boards, + Membership in comparable German and foreign supervisory bodies of corporations 1) Listed Company
Back upManagement remuneration - short-term bonus (STI)
29
Short-Term Bonus (STI)Base Salary
Bonus (STI)
Target Cash Comp.
Long-Term Incentive (LTI)
Target Direct Comp.
Pension
Total Target Comp.
Performance targets / combination
Minimum / Cap
Payout
Special compensation
• Company Performance: EPS• Individual Performance: team targets, individual targets• Targets are combined by multiplying
• Company Performance: 0% - 200%• Individual Performance: 50% - 150%• Total cap (incl. special compensation components): 200% of target amount
• Payout in cash
• The Supervisory Board may grant special compensation as part of the annual bonus for outstanding achievements.
+
=
+
=
+
=
The Short-Term Bonus is structured as follows:
Back upManagement remuneration - long-term incentive (LTI)
30
The Long-Term Incentive is designed as a virtual Performance Share Plan.
Long-Term Incentive
Performance targets
Target achievement
Performance period
Cap
▪ To calculate the final number of virtual shares, the TSR-values of all peer companies are ranked and E.ON’s relative position is determined based on the percentile reached
▪ Threshold: No grant of virtual shares if target achievement is below the threshold defined by the Supervisory Board
▪ Cap: Grant of virtual shares is capped at 150%
• 4 years
• Payout is capped at 200% of target amount
Plan type Performance Share Plan
Payout ▪ Payout in cash*
Share Ownership Guidelines*
▪ To further strengthen E.ON’s capital market focus and shareholder-oriented culture, Share Ownership Guidelines were introduced in 2017
▪ CEO: 200% of base salary; Ordinary Board member: 150% of base salary
Base Salary
Bonus (STI)
Target Cash Comp.
Long-Term Incentive (LTI)
Target Direct Comp.
Pension
Total Target Comp.
+
=
+
=
+
=
1. Until the required investment is reached, Management Board members are obligated to invest net payouts from their long-term compensation in actual E.ON stock.
Performance targets
Target achievement
Performance period
• Relative Total Shareholder Return (TSR) compared to the companies of the STOXX® Europe 600 Utilities
• To calculate the final number of virtual shares, the TSR-values of all peer companies are ranked and E.ON’s relative position is determined based on the percentile reached
• Threshold: No grant of virtual shares if target achievement is below the threshold defined by the Supervisory Board
• Cap: Grant of virtual shares is capped at 150%
Payout • Payout in cash1
Share Ownership Guidelines*
• To further strengthen E.ON’s capital market focus and shareholder-oriented culture, Share Ownership Guidelines were introduced in 2017
• CEO: 200% of base salary; Ordinary Board member: 150% of base salary
Back upManagement remuneration - pension
31
The pension scheme is designed as defined contribution scheme1:
Pension scheme1
Plan type
Pension account
Vesting
Interest rate
• Defined contribution plan, capital units
• Yearly contribution from 1th of January 2017 onwards of maximum 21% of pensionable income (base salary + STI)
• Fixed base contribution 16%• Matching contribution 5%2
• According to the companies pension act (Betriebsrentengesetz – BetrAVG)
• Interest rate used for each year is based on the return of long-term German treasury notes
Retirement age • At the age of 62
Covered events • Retirement, invalidity, death
Payout • Lifelong pension, annual installment or lump sum
Base Salary
Bonus (STI)
Target Cash Comp.
Long-Term Incentive (LTI)
Target Direct Comp.
Pension
Total Target Comp.
+
=
+
=
+
=
1. Dr. Teyssen was appointed to the Management Board before 2010, thus he is granted a defined benefit scheme.2. The requirement for the matching contribution to be granted is that the Management Board member contributes, at a minimum, the same amount by having it withheld from his compensation.
Back upManagement remuneration - other contractual terms
32
Settlement cap
Settlement for change-of-control
Non-compete clause
Other fringe benefits
• According to German Corporate Governance Code (GCGC): Maximum of two years’ total compensation or the total compensation for the remainder of the service agreement
• Settlement equal to in general two target salaries (base salary, target bonus, and fringe benefits), reduced by 20 percent
• 6 months, pro rated compensation amounting to 100% of base salary + STI, but at least 60% of the last total compensation
• Chauffeur-driven company car• Necessary telecommunications equipment• Coverage of costs that include those for a periodic medical examination• Coverage of premiums of accident insurance policy
Back upE.ON‘s authorized and conditional capital
Up to 175m EUR
Authorized Capital
with subscription rights
withoutsubscription rights
Contribution in cash and / or in kind
Up to 460m EUR
Up to 10% of share capital
Conditional Capital
Up to 20% of share capital
Contribution in cash
Contribution in kind
max. 20% of sharecapital
max. 10% of sharecapital
max. 460m EUR
33
Capital authorizations as approved by AGM 2017 prior to 20% capital increase vs. contribution in kind for the RWE/innogy transaction in 2019
E.ON intends to renew authorizations in 2020 taking into account investor requirements as well as company interests
Back upAudit
• Current audit firm PricewaterhouseCoopers GmbH,
Wirtschaftsprüfungsgesellschaft
• Current auditor Markus Dittmann (since 2014)
Aissata Touré (since 2015)
• Auditor from 2021 onwards: KPMG
(subject to AGM appointment)
• Other attestation services
• This item includes mandatory audit-related services due to
legal requirements as well as voluntary audit-related services
• Non-audit services
• E.ON’s audit committee has defined a cap for non-audit
services which is closely monitored.
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External Verification
Back upE.ON’s green bond framework
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Use of Proceeds Project Evaluation & Selection
Management of Proceeds
Reporting
Renewable energy
Energy efficiency
Clean transportation
+
1. https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/
E.ON’s Green Bond Framework is aligned with the ICMA Green Bond Principles 20181 and Eligible Green Projects are aligned with draft EU taxonomy
Back upUse of green bond proceeds: Clear focus on the energy transition
361. https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/2. In terms of renewable energy and energy efficiency grid projects renewable energy refers to energy from wind, solar (PV), biomass/ biomethane, landfill and sewage gas, hydro and power-to-x3
3. Power-to-X refers to various technologies for storage or other use of surplus electricity in times of oversupply from volatile renewable energies infeed such as solar energy, wind energy and hydropower. Power-to-X technologies enable sector coupling and reduce curtailment of renewable energies increasing the share of renewables in the energy mix4. The feed-in ratio is defined as energy feed-in from renewables divided by all decentral energy feed-in of E.ON’s fully consolidated grid businesses
Your E.ON contacts
Investor RelationsT +49 (201) 184 28 [email protected]
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Melanie Osterried T +49 (201) 184 65 38
Manager Corporate Finance [email protected]
Verena Nicolaus-Kronenberg T +49 152 09331400
Head of Investor Relations [email protected]
Martina Burger T +49 (201) 184 28 07
Manager Investor Relations [email protected]
Financial calendar & important links
Financial calendar
March 25, 2020 Annual Report 2019 & Capital Markets Day (London)
May 12, 2020 Quarterly Statement: January – March 2020
May 13, 2020 2020 Annual Shareholders Meeting
August 12, 2020 Half-Year Financial Report: January – June 2020
November 11, 2020 Quarterly Statement: January – September 2020
Important links
Presentations https://www.eon.com/en/investor-relations/presentations.html
Facts & Figures 2019 https://www.eon.com/content/.../presentations/facts-and-figures-2019.pdf
Annual Reports https://www.eon.com/en/investor-relations/financial-publications/annual-report.html
Interim Reports https://www.eon.com/en/investor-relations/financial-publications/interim-report.html
Shareholder Meeting https://www.eon.com/en/investor-relations/shareholders-meeting.html
Green Bond Framework https://www.eon.com/en/investor-relations/bonds/green-bonds.html
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Disclaimer
This presentation contains information relating to E.ON Group ("E.ON") that must not be relied upon for any purpose and may not be redistributed, reproduced,published, or passed on to any other person or used in whole or in part for any other purpose. By accessing this document you agree to abide by the limitations set outin this document as well as any limitations set out on the webpage of E.ON SE on which this presentation has been made available.
This document is being presented solely for informational purposes. It should not be treated as giving investment advice, nor is it intended to provide the basis for anyevaluation or any securities and should not be considered as a recommendation that any person should purchase, hold or dispose of any shares or other securities.
The information contained in this presentation may comprise financial and similar information which is neither audited nor reviewed and should be consideredpreliminary and subject to change.
Some of the information presented herein is based on statements by third parties. No representation or warranty, express or implied, is made as to, and no relianceshould be placed on, the fairness, accuracy, completeness or correctness of this information or any other information or opinions contained herein, for any purposewhatsoever.
This presentation may contain forward-looking statements based on current assumptions and forecasts made by E.ON management and other information currentlyavailable to E.ON. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financialsituation, development or performance of the company and the estimates given here. E.ON does not intend, and does not assume any liability whatsoever, to updatethese forward-looking statements or to conform them to future events or developments.
Neither E.ON nor any respective agents of E.ON undertake any obligation to provide the recipient with access to any additional information or to update thispresentation or any information or to correct any inaccuracies in any such information.
Certain numerical data, financial information and market data (including percentages) in this presentation have been rounded according to established commercialstandards. As a result, the aggregate amounts (sum totals or interim totals or differences or if numbers are put in relation) in this presentation may not correspond in allcases to the amounts contained in the underlying (unrounded) figures appearing in the consolidated financial statements. Furthermore, in tables and charts, theserounded figures may not add up exactly to the totals contained in the respective tables and charts.