2011 Annual Report - OTCIQ.com

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180 Corporate Governance Report Compensation Report pursuant to Section 289, Paragraph 2, Item 5 and Section 315, Paragraph 2, Item 4 of the German Commercial Code (Part of the Combined Group Management Report) This compensation report describes the compensation plan and the individual compensation for E.ON AG’s Supervisory Board and Board of Management. It applies the regulations of the German Commercial Code and the German Stock Corporation Act (known by its German abbreviation, “AktG”) as amended to reflect the Act on the Appropriateness of Management Board Compensation (known by its German acronym, “VorstAG”) as well as the principles of the German Corporate Governance Code (“the Code”). Compensation Plan for Members of the Supervisory Board The compensation of Supervisory Board members is determined by the Annual Shareholders Meeting and governed by E.ON AG’s Articles of Association. In accordance with German law, the compensation plan takes into consideration Supervisory Board members’ responsibilities and scope of duties. The Supervisory Board’s compensation plan was changed by a resolution of the Annual Shareholders Meeting on May 5, 2011. Starting in the 2011 financial year, Supervisory Board members receive fixed compensation only. Although this deviates from one of the Code’s recommendations, it further enhances the independence necessary for the Supervisory Board to fulfill its supervisory function. In addition, there are a number of duties that Supervisory Board members must perform irrespective of the Company’s financial performance. The new plan ensures an appropriate level of compensation even when the Company faces difficult times, since in such times the Supervisory Board’s work is often particularly demanding. The details of the proposed compensation plan are as follows: In addition to being reimbursed for their expenses including the value-added tax due on their compensation, Supervisory Board members receive fixed compensation of €140,000 for each financial year. 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. There is no additional compensation for members of the Nomination Committee or of any committees formed on an ad hoc basis. Members serving on more than one committee receive the highest applicable committee compensation only. In contradistinction to the compensation just described, the Chairman of the Supervisory Board receives fixed compensation of €440,000; the Deputy Chairman, €320,000,00. The Chairman and the Deputy Chairman of the Supervisory Board receive no additional compensation for their committee duties. In addition, Supervisory Board members are paid an attendance fee of €1,000 per day for meetings of the Supervisory Board or its committees. Compensation is paid on a pro rata basis after the completion of each quarter. Individuals who were members of the Supervisory Board or any of its committees for less than an entire financial year receive pro rata compensation. Finally, the Company has taken out D&O insurance for the benefit of Supervisory Board members to cover the statutory liability related to their Supervisory Board duties. In accordance with the Code’s recommendations, this insurance includes a deductible in the case of a damage claim being granted. The deductible is 10 percent of a damage claim but with a maximum cumulative annual cap of 150 percent of a member’s annual fixed compensation.
Compensation of the Members of the Supervisory Board The total compensation of the members of the Supervisory Board amounted to €4.8 million (2009: €4.9 million). As in the prior year, no loans were outstanding or granted to Supervisory Board members in the 2011 financial year. The members of the Supervisory Board are listed on pages 194 and 195. CEO Letter E.ON Stock Combined Group Management Report Consolidated Financial Statements Corporate Governance Report Supervisory Board and Board of Management Tables and Explanations Supervisory Board Compensation for 2011 Supervisory Board Supervisory Compensation compensation Board for committee from affiliated € Compensation duties companies1 Total Werner Wenning (Chairman since May 5, 2011) 340,000 23,333 – 363,333 Ulrich Hartmann (until May 5, 2011) 183,333 – – 183,333 Erhard Ott 320,000 – – 320,000 Werner Bartoschek 140,000 110,000 38,000 288,000 Sven Bergelin 140,000 – 61,220 201,220 Oliver Biniek (since September 30, 2011) 46,667 17,500 4,550 68,717 Gabriele Gratz 140,000 70,000 56,000 266,000 Wolf-Rüdiger Hinrichsen (until September 30, 2011) 105,000 52,500 – 157,500 Ulrich Hocker 140,000 – – 140,000 Baroness Denise Kingsmill CBE (since May 5, 2011) 93,333 – – 93,333 Prof. Dr. Ulrich Lehner 140,000 70,000 – 210,000 Bård Mikkelsen 140,000 – – 140,000 René Obermann (since May 5, 2011) 93,333 – – 93,333 Hans Prüfer 140,000 70,000 – 210,000 Klaus Dieter Raschke 140,000 110,000 46,870 296,870 Dr. Walter Reitler 140,000 – 37,500 177,500 Hubertus Schmoldt 140,000 – – 140,000 Dr. Henning Schulte-Noelle 140,000 70,000 – 210,000 Dr. Karen de Segundo 140,000 – – 140,000 Dr. Theo Siegert 140,000 180,000 – 320,000 Prof. Dr. Wilhelm Simson (until May 5, 2011) 58,333 – – 58,333 Dr. Georg Frhr. von Waldenfels 140,000 – – 140,000 Hans Wollitzer 140,000 70,000 58,900 268,900 Subtotal 3,339,999 843,333 303,040 4,486,372 Attendance fees and meeting-related reimbursements 287,378 Total 4,773,750 1 Following the adoption of an expense-based approach, this column only shows compensation for the 2011 financial year. Mrs. Gratz and Mr. Bartoschek received €76,055 and €54,836 from E.ON subsidiaries, respectively, for Supervisory Board duties in 2010. 181
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2011 Annual Report
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Contents 2 CEO Letter 4 E.ON Stock
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Europe’s energy markets are conso
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Dividend At the 2012 Annual Shareho
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Global Units We manage all our oper
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How will we achieve all this? The f
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Top performance requires efficient
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The Energy Roadmap 2050 adopts a sc
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Macroeconomic Environment In 2011,
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Energy Prices Four main factors dro
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Attributable Generating Capacity Th
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The Russia unit generated about 94
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Gas Sales On a consolidated basis,
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Sales Our sales rose by 22 percent
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Sales at the UK regional unit decli
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E.ON generates a significant portio
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Distribution Networks’ EBITDA dec
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and coal-fired power stations. Of t
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Analyzing Value Creation by Means o
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Cash Flow and Financial Position E.
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In addition to our DIP, we have a
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E.ON AG’s Earnings, Financial, an
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Employees HR Strategy The knowledge
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Workforce Figures At year-end 2011,
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Technology and Innovation In 2011,
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The ERC was founded in 2006. Its mi
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Risk Management and Insurance E.ON
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Strategic Risks Our business strate
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E.ON is building a hard-coal-fired
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waste.” The draft legislation men
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In 2012, Sweden will introduce a ne
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Due to lower commodity prices and u
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We anticipate Renewables’ earning
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Opportunities We conduct a bottom-u
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Audit Opinion According to § 322 A
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CEO Letter E.ON Stock Combined Grou
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Additional information on the State
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Business Combinations Business comb
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Newly created goodwill is allocated
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Subsequent costs arising, for examp
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Instruments commonly used are forei
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future exercise price. This amount
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Contingent liabilities are possible
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(2) New Standards and Interpretatio
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and joint operations. The provision
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The amended standard also contains
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Russian Federation. The proceeds fr
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The gains on the disposal of invest
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The decrease in tax expense by €3
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Of the deferred taxes reported, a t
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Stock Appreciation Rights of E.ON A
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The fees for financial statement au
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Of this total, an amount of €160
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(15) Companies Accounted for under
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The individual impaired receivables
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(20) Additional Paid-in Capital As
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Description of the Benefit Obligati
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Description of Plan Assets Defined
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Taking into account periodic additi
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(25) Miscellaneous Provisions The f
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Advance payments made to other wast
Page 131 and 132: At year-end 2011, the following EIF
Page 133 and 134: Construction grants of €2,857 mil
Page 135 and 136: In Sweden, owners of nuclear facili
Page 137 and 138: Competition in the gas market and i
Page 139 and 140: Pursuant to the information availab
Page 141 and 142: CEO Letter E.ON Stock Combined Grou
Page 143 and 144: The fair value of shareholdings in
Page 145 and 146: The following two tables illustrate
Page 147 and 148: Risk Management Principles The pres
Page 149 and 150: A sensitivity analysis was performe
Page 151 and 152: Virtually all of the investments in
Page 153 and 154: Under IAS 24, compensation paid to
Page 155 and 156: Net book gains in 2011 decreased by
Page 159 and 160: (34) Compensation of Supervisory Bo
Page 161 and 162: Notes (36) List of Shareholdings Pu
Page 177 and 178: In addition to the Company’s peri
Page 179 and 180: The Supervisory Board has establish
Page 181: and the Consolidated Financial Stat
Page 185 and 186: The Supervisory Board, at its discr
Page 187 and 188: the E.ON Group’s ROCE and prior-y
Page 189 and 190: Compensation of the Members of the
Page 191 and 192: The remaining other compensation of
Page 193 and 194: In addition, the Board of Managemen
Page 195 and 196: We examined the Board of Management
Page 197 and 198: Klaus Dieter Raschke Chairman of th
Page 199 and 200: At the Board of Management’s disc
Page 201 and 202: Further information about financial
Page 203 and 204: Assessment After companies have doc
Page 207 and 208: Glossary of Financial Terms Actuari
Page 209 and 210: Prepayments and accrued income Line
Page 211: Financial Calendar May 3, 2012 2012
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