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Expert Corporate Governance Service (ECGS)
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Verbund - AGM 30 April 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 Verbund which we consider has several shortcomings: The target amounts for the short-term incentive (STI) have not been disclosed and the performance criteria are insufficiently disclosed. Furthermore, there is no long-term incentive (LTI) in place for Management Board members. Finally, pension benefits are also insufficiently disclosed. Although we consider the absolute amounts paid to the Management Board members as acceptable, we urge the Supervisory Board to review the remuneration system and bring it in line with international standards.In addition, Supervisory Board Chairman Dr. Gerhard Roiss will resign from the Board with effect as of the close of the AGM 2019. The Company fails to disclose who will stand for the position of Chairman after the AGM. We raise our concerns over this lack of transparency. In line with our guidelines we would in principle recommend opposing the discharge of the Chairman of both the Supervisory Board's Remuneration Committee and Nomination Committee, Dr. Gerhard Roiss. 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 6b: We recommend to oppose the election of Mag. Martin Ohneberg to the Supervisory Board due to concerns over aggregate time commitments.

Underlying
Verbund AG

Verbund is a public utility company engaged in the generation and transmission of electricity from subsidiaries' hydro and thermal power stations located throughout Austria. Through its subsidiaries, Co. is involved in the planning and construction of water systems, hydroelectric power plants, river structures, sewage disposal systems, and high voltage transmission towers and lines. Co. generates, trades and sells electrical energy to power exchange buyers, traders, energy supply companies and industrial companies as well as households and commercial customers.

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Expert Corporate Governance Service (ECGS)

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