Compensation plan for members of the Managing Board

Managing Board compensation takes into account the importance of the Group and the responsibility that goes with it, the economic situation of the Company, and the market environment.

The variable portion of the compensation emphasises the need for sustainability in a number of ways. Achieving sustainability depends to a large extent on satisfying performance criteria that extend beyond a single financial year.

The performance-related portion of the remuneration that can be earned has an upper limit and accounts for approximately 50% of the possible total annual income. The awarding of such compensation presupposes that consideration has been given to the sustainable development of the Company and the Group. The Managing Board is not entitled to the performance-related component of compensation if performance fails to meet certain thresholds.

In 2012, the key performance criteria for variable compensation are the combined ratio, premium growth and the profit before taxes for the years 2012 and 2013. Even if the performance target is met in a financial year, because of the focus on sustainability, the full variable compensation is only awarded if satisfactory performance is also reported in the following year.

Managing Board compensation does not include stock options or similar instruments.

When setting the gross compensation of the Managing Board members, a certain amount of attention was also paid to equalising net effects, so that if compensation was paid for positions in affiliated companies outside of Austria, where the tax regime was more favourable than that in Austria, a lower gross compensation was set to take account of this fact. This and the different responsibilities of the members of the Managing Board explain the differences in their gross compensation.

In detail, the active members of the Managing Board in 2012 received the following for their service during the reporting period: Peter Hagen EUR 1,189,000 (including EUR 529,000 variable), Martin Simhandl EUR 884,000 (including EUR 408,000 variable), Peter Höfinger EUR 884,000 (including EUR 408,000 variable), Franz Fuchs EUR 378,000 (including EUR 169,000 variable). Günter Geyer, who ceased to be a member of the Managing Board on 31 May 2012, received EUR 877,000 (including EUR 590,000 variable). The members of the Managing Board received the following compensation from affiliated companies for their services to the Company, or as a manager or employee of an affiliated company: Franz Kosyna EUR 867,000 (including EUR 309,000 variable), Franz Fuchs EUR 360,000 (including EUR 169,000 variable).

The standard employment contract for a member of the Vienna Insurance Group Managing Board includes a pension equal to a maximum of 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).

A pension is normally received only if a Managing Board member’s position is not extended and the member is not at fault for the lack of extension, or the Managing Board member retires due to illness or age.

In cases where the provisions of the Austrian Employee and Self-Employment Provisions Act (Mitarbeiter- und Selbstständigen-Vorsorgegesetz) are not applicable by law, the Vienna Insurance Group Managing Board contracts provide for a severance payment entitlement structured in accordance with the provisions of the Austrian Employee Act (Angestelltengesetz), as amended in 2003, in combination with applicable sector-specific provisions. This allows Managing Board members to receive a severance payment equal to two to twelve months’ compensation, depending on the period of service, with a supplement of 50% if the member retires or leaves after a long-term illness. A Managing Board member who leaves of his or her own volition before retirement is possible, or leaves due to a fault of his or her own, is not entitled to a severance payment.

Compensation plan for the members of the Supervisory Board

In accordance with resolutions adopted by the 21st ordinary General Meeting on 4 May 2012, the members of the Supervisory Board elected by the General Meeting are entitled to receive compensation in the form of a payment remitted monthly in advance. Members of the Supervisory Board who withdraw from their positions before the end of a month still receive full compensation for the month in question. In addition to this compensation, Supervisory Board members are entitled to receive an attendance allowance for participating in Supervisory Board meetings and Supervisory Board committee meetings (remitted after participation in the meeting). The total compensation paid to members of the Supervisory Board in 2012 was EUR 374,000 (2011: EUR 365,000). In detail, the members of the Supervisory Board received the following: Mr Wolfgang Ruttenstorfer EUR 65,000, Mr Karl Skyba EUR 46,000, Mr Bernhard Backovsky EUR 29,000, Ms Martina Dobringer EUR 32,000, Mr Alois Hochegger EUR 35,000, Mr Heinz Öhler EUR 33,000, Mr Reinhard Ortner EUR 36,000, Mr Martin Roman EUR 25,000, Mr Johann Sereinig (until 4 May 2012) EUR 13,000, Mr Friedrich Stara EUR 36,000, Ms Gertrude Tumpel-Gugerell (starting 4 May 2012) EUR 24,000.

Supervisory Board compensation does not include stock options or similar instruments.