Managing Board

In the 2009 business year, the Managing Board was made up of the following persons:

Chairman:
Dr. Günter Geyer

Members:
Ing. Martin Diviš, MBA (starting 13 June 2009)
Dr. Christine Dornaus (starting 13 June 2009)
Dkfm. Karl Fink (until 30 September 2009)
Franz Fuchs (starting 1 Oktober 2009)
Dr. Peter Hagen
Dr. Judit Havasi (starting 13 June 2009)
Mag. Peter Höfinger
Mag. Robert Lasshofer
Erich Leiß (starting 13 June 2009)
Dr. Martin Simhandl

Compensation Plan for Managing Board Members:

The Managing Board of the Company manages the Vienna Insurance Group. The Managing Board is also responsible for duties relating to the operational management of Wiener Städtische AG in Austria. In some cases, responsibility is also assumed for additional duties in affiliated or related companies.

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 was 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.

Until 12 June 2009, the Managing Board in 2009 consisted of six members. On 13 June 2009, an amendment to the articles of association went into effect, changing the Company’s organisational structure so as to segregate its holding and operating functions. This amendment also created two Managing Board committees. Since that time, the Managing Board as a whole has been made up of ten members.

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), 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.

The total expenses (cash claims and provisions for future claims) for severance payments and pensions of EUR 12.154 million in 2009 (2008: EUR 10.388 million) include EUR 1.343 million (2008: EUR 0.586 million) in severance payment and pension expenses (cash claims and provisions for future claims) for senior management (leitende Angestellte) as defined in § 80(1) AktG and former members of the Managing Board and their survivors, and provisions for future severance payments and pension claims of members of the Managing Board.

The members of the Managing Board received gross compensation of EUR 4.238 million (2008: EUR 5.610 million plus special remuneration of EUR 1.690 million) for their services in 2009. The total compensation paid to former members of the Managing Board (including surviving dependents) was EUR 4.264 million in 2009 (2008: EUR 1.074 million), including amounts owed to two Board members under the law and by contract in connection with their age-related withdrawal.

The Managing Board:

Dr. Günter Geyer

              Dr. Judit Havasi                                      Mag. Peter Höfinger                                       Erich Leiß

Vienna, 11 March 2010