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Expert Corporate Governance Service (ECGS)
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Andritz, March 27 2019

Item 4: Since there is no vote on Management Board members' remuneration in Austria, we take the opportunity to voice our concerns regarding the remuneration system currently in place at Andritz which we consider has several shortcomings: The target amounts for the short-term incentive (STI) have not been disclosed and the potential maximum STI may reach as much as 300% of base salary which significantly exceeds ECGS guidelines according to which the maximum annual bonus should not exceed 150% of base salary. Furthermore, pension benefits are insufficiently disclosed.  We note that the Company bi-annually adopts share option plans for Management

Board members. Although we consider the absolute amounts paid to the Management Board members as still acceptable, we urge the Supervisory Board to review the remuneration system and bring it in line with international standards. In line with our guidelines we would in principle recommend opposing the discharge of the Chairman of the Supervisory Board's Nomination and Remuneration Committee, Prof. Dr. Christian Nowotny. As the discharge is proposed in a bundled resolution, however, we recommend shareholders to oppose the discharge of the Supervisory Board as a whole.

Item 7b: We recommend to oppose the election of Dr. Alexander Leeb to the Supervisory Board as we are unable to determine a possible impairment of his independence as well as his aggregate time commitments due to an incomplete profile.

Underlying
Andritz AG

Andritzis develops production systems and industrial process solutions for standard and specialized products. Co. maintains five business areas. Pulp and Paper provides technology and services for production of various grades of pulp and fiber for the manufacture of paper, board and tissue. Metals develops and manufactures plants for the production of cold-rolled carbon steel, stainless steel, and non-ferrous metals strip. Environment and Process provides products and services for mechanical and thermal solid or liquid separation. Feed and Biofuel develops and produces equipment for production of feed. Hydro supplies turnkey electromechanical equipment and services for hydro power plants.

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