Remuneration for top executives (Rule 28a of the ACGC): In light of the requirements defined by the ACGC, the current variable remuneration system for top executives was amended by the company’s corporate bodies as of 1 October 2010. This adjustment set the following priorities:
Indicators to illustrate the company’s economic situation: The following quantitative parameters are used to measure the further development of management indicators that demonstrate the strategic and operating priorities of the EVN Group: increase in economic value added (EVA®) and average cash flow contribution.
Sustainability: Within the frame of the new remuneration rules, one of the primary objectives of the current version of the ACGC is to strengthen the focus of the Executive Board and top managers on sustainability and a long-term orientation. The introduction of multi-year targets and a bonus reserve further increased the solidity and stability of the variable remuneration system.
The bonus reserve is defined as a payment mechanism which is converted into an annual pro-rata bonus if the quantitative targets are met during a given period. Up to one-half of the bonus reserve is distributed after the achievement of objectives has been confirmed, while the remainder is carried forward to the next year. The introduction of a bonus reserve is designed to achieve two main goals. On the one hand, it is based on a multi-year approach that links consecutive years by carrying the unpaid bonus components from the initial reserve forward to the next period (similar to an opening account balance). On the other hand, this scheme aims to cushion and smooth the “independent” fluctuations in the company’s economic performance.
Multi-year approach: The quantitative objectives are defined in advance for a period of three years. The determination of target achievement is based on internal data and information as well as external sources, e. g. benchmarks, peer group comparisons and capital market and rating evaluations. In addition to the general three-year period, the accuracy and validity of the medium-term targets is evaluated each year. These targets are only revised in exceptional cases, for example in light of unforeseeable events or changes in the company which have a significant impact on performance.
Stock options (Rule 29 of the ACGC): EVN does not have a stock option programme for the members of the Executive Board or key managers.
Performance-based bonus programme for the Executive Board (Rules 27, 30 of the ACGC): In 2015/16 the remuneration of the Executive Board comprised a fixed component of approximately 74% and a variable component of approximately 26%. The variable component is based on the 2014/15 financial year. The performance-based component consists of the following parts: 30% based on the increase in economic value added (EVA®), 40% on the average cash flow contribution and 30% on individually agreed targets. Target corridors between 0% and 200% have been defined for the quantitative performance criteria (EVA® and the cash flow contribution), whereas 0% to 100% of the individually agreed targets can be achieved.
In keeping with the requirements of the current ACGC, the Supervisory Board of EVN approved an amendment to the previous variable remuneration scheme beginning in 2010/11. Additional information is provided under the remuneration system for top executives (Rule 28a of the ACGC).
Directors and officers insurance (D&O insurance, Rule 30 of the ACGC): EVN has arranged for a D&O insurance to cover claims for damages by the company, shareholders, creditors, competitors and customers against the Executive Board resulting from violations of their legal obligation to exercise diligence in their capacity as managing directors. The managerial bodies of the Group’s subsidiaries and certain affiliated companies are jointly insured under the prevailing terms and conditions at the present time. The costs for this insurance are carried by the company. Since the premium applies to the Group and is not based on the number of insured persons, extending this insurance coverage to the members of the Supervisory Board and the corporate bodies of other Group companies does not increase the premium.
Contracts requiring the approval of the Supervisory Board (Rule 48 of the ACGC): No member of the Supervisory Board has concluded a contractual agreement with EVN or one of its subsidiaries that would entitle him or her to more than an insignificant payment. All such contracts are subject to the approval of the Supervisory Board.
Remuneration scheme for the Supervisory Board (Rule 51 of the ACGC): See the information on the Supervisory Board.
Measures to support women (Rule 60 of the ACGC): EVN is committed to offering equal opportunities to all its employees. The percentage of women in EVN’s workforce amounts to 22.6%, while roughly 7.0% of the key management positions are filled by women. There are no women on EVN’s Executive Board, and the percentage of women on the Supervisory Board equals 26.7%. The “Women@EVN” programme was introduced in 2010/11 to increase this ratio by improving the opportunities and perspectives offered to women working for the EVN Group in Austria. It is designed to create operating conditions that enable women to assume qualified positions in specialised areas and at the management level in line with their inclinations and skills. Women were appointed to two senior positions during the reporting year. Group-wide, eleven women currently serve as project managers (project manager career path). The percentage of young women in the Group’s management development programme was higher than the current share of women in EVN’s workforce during the reporting year. EVN has long pursued measures to support the work-life balance of women. These include flexible working time models, the provision of individualised support to women returning after maternity leave, day care during holidays, information events for staff members on parental leave as well as a comprehensive programme of vocational and professional education which is also open to men and women on parental leave. EVN’s objective for the medium term is to increase the share of women to a level that mirrors the current educational levels of women in the applicable professional groups.
The Austrian Equal Opportunity Act requires companies with a workforce above a certain threshold to submit a biannual remuneration report (§ 11a of the Equal Opportunity Act). All companies in the EVN Group with a workforce above the legally defined threshold prepared the required report and submitted it to the central works council.
Directors’ Dealings (Rule 73): No purchases of EVN AG shares by members of EVN’s management or closely related persons (Art. 19 of Regulation (EU) 596/2014 on market abuse) were reported to the company or to the Austrian Financial Market Authority during 2015/16.
Related Party: EVN AG and NÖ Landes-Beteiligungsholding GmbH concluded a group and tax settlement agreement in 2005. Additional information on related party transactions as defined in IAS 24 is provided in the information on the basis of preparation in the consolidated notes (note 68).
Auditor’s fees: EVN’s annual and consolidated financial statements for the 2015/16 financial year were audited by KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Vienna. The fees charged by KPMG in 2015/16 amounted to EUR 2.1m (previous year: EUR 1.8m) and were distributed as follows: 43.6% for auditing and audit-related services (previous year: 48.2%), 48.1% for tax consulting services (previous year: 48.8%) and 8.3% for other consulting services (previous year: 3.0%).