Compensation plan for members of the Managing Board

The compensation of Managing Board members is comprised of a fixed (approximately 60%) and a variable (approximately 40%) component. The performance-linked component is dependent on the profit of the Group, as well as of key Group companies, and takes into account the sustained performance of the Company and the Group. There is a maximum limit on this performance-linked component. The Managing Board receives no performance-linked compensation if profit falls below certain thresholds.

In view of the economic environment, which also continues to present great challenges to many of the Group’s customers, the Managing Board waived the 2008 performance-linked income component it is contractually entitled to upon achieving its targets.

Despite the good 2009 results, the Managing Board, in recognition of the difficult economic situation, is also waiving its bonus entitlement for 2009.

The standard employment agreement of a member of the Managing Board of VIENNA INSURANCE GROUP Wiener Städtische Versicherung AG includes a pension entitlement equal to at most 40% of the measurement basis if the member remains on the Managing Board until the age of 65 (the measurement basis is equal to the standard fixed salary). The rules for Managing Board members with many years of prior service differ in that the percentage of the measurement basis is higher for historical reasons (up to 55%) with supplements awarded for remaining on the Managing Board at the Supervisory Board’s request after the age limit has been reached.

A pension is normally received only if a Managing Board member’s position is not extended through no fault of his or her own, or the Managing Board member retires due to illness or age.

To the extent that the law does not require application of the provisions of the Austrian Employee and Self-Employment Provisions Act (Mitarbeiter- und Selbstständigen-Vorsorgegesetz) do not apply under the law, the Managing Board agreements of VIENNA INSURANCE GROUP Wiener Städtische Versicherung AG provide for a severance payment structured in accordance with the provisions of the Austrian Employee Act (Angestelltengesetz), as amended in 2003, in combination with applicable sector-specific provisions. Under these provisions, depending on the period of service, Managing Board members can receive two to twelve months’ compensation as a severance payment, with an increase of 50% if the member retires or withdraws after a long-term illness. A member who withdraws from the Managing Board of his or her own volition before being able to retire, or who withdraws due to a fault of his or her own, is not entitled to a severance payment.

Compensation plan for members of the Supervisory Board

In accordance with resolutions adopted by the 16th ordinary General Shareholders’ Meeting of 25 May 2007, the members of the Supervisory Board elected by the General Shareholders’ Meeting are entitled to receive compensation in the form of a payment remitted monthly in advance. Members of the Supervisory Board who withdraw from the Supervisory Board during the course of a month receive full compensation for the month in question. In addition to this compensation, Supervisory Board members are entitled to receive an attendance fee for their participation in Supervisory Board meetings and Supervisory Board committee meetings (remitted following participation in the meeting). The total compensation paid to members of the Supervisory Board in 2009 was EUR 366 thousand (2008: EUR 353 thousand).


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