governance and sustainability presentation · 1/28/2020 · sustainability presentation dr....

Governance and Sustainability Presentation

Dr. Karl-Ludwig Kley – Chairman of the Supervisory Board

January 2020

Agenda

1. Supervisory Board, Committee Work and Remuneration System

2. Environment and Social Impact

3. Back Up

E.ON’s two-tier governance structure

3

• German Co-Determination Act not applicable to SE, instead agreement on the involvement of employees

• More flexibility regarding size and composition of Supervisory Board, especially regarding internationality of employee representatives

Special features of an SE Supervisory Board

AnnualShareholders

Meeting

Board ofManagement

SupervisoryBoard

appoints, controls, advises

regularly reports to

Supervisory Board, Committee Work and Remuneration System

Environment and Social Impact

Flexibility in E.ON’s Supervisory Board size

4

20 Members

12 Members

18 Members



14 Members

Temporary extension to fulfill diversity

requirements

Temporary extension due to innogy

integration

Reduction to 12 members according

to articles of association

2018 2019 20232016 2017

12 Members

E.ON Supervisory Board –Experienced, diverse and independent

5

20 Board Members

Age Nationality

Member of the E.ON Supervisory Board for

Work experience gained1

6

12

2

1 – 5 Years<1 Year >5 Years

4 4

2

>5 Other Companies

1 Other Company 2 – 5 Other Companies

10

10

Shareholder Representatives

Employee Representatives

1. Only Shareholder Representatives; other companies outside E.ON Group

55%

35%

10%

>65 <55

55-65

65%

35%

German

Other Nationalities



E.ON Supervisory Board Shareholder representatives

6

Erich ClementiDeputy Chairman Born 1958, ItalianMember since 2016Expert in digitaltransformation and strategy

Andreas SchmitzBorn 1960, GermanMember since 2016Particular expertise in financial analysis and capital markets

Klaus FröhlichBorn 1960, GermanMember since 2018Expert in brand and product strategies and digitization; particular focus on e-mobility

Dr. Karen de SegundoBorn 1946, DutchMember since 2008In-depth knowledge of energy market and regulated industries experience

Carolina Dybeck HappeBorn 1972, SwedishMember since 2016Profound experience in finance and digital transformation of products and services

Ewald WosteBorn 1960, GermanMember since 2016Extensive expertise in the energy sector, ESG expert

Ulrich GrilloBorn 1959, GermanMember since 2019Excellent network in German industry as well as management and strategy expertise

Dr. Rolf Martin SchmitzBorn 1957, GermanMember since 2019Extensive management and strategy expertise paired with technical knowledge

Deborah WilkensBorn 1971, United States of AmericaMember since 2019 Proven capital market expert specialized in the energy sector

Dr. Karl-Ludwig KleyChairman of the Supervisory BoardBorn 1951, GermanMember since 2016Extensive leadership and supervisory board experience



E.ON Supervisory Board Employee representatives

7

Clive BrouttaBorn 1960, BritishMember since 2014Expert in HSE and Sustainability

Fred SchulzBorn 1962, GermanMember since 2014Experience in grid operations and HR management

Szilvia Pinczésné MártonBorn 1969, HungarianMember since 2018In-depth knowledge of the network business and co-determination matters

Elisabeth WallbaumBorn 1975, GermanMember since 2016Expertise in Energy generation and IT-based process control

Eugen Gheorghe LuhaBorn 1957, RomanianMember since 2012Profound expertise in the gas business

Albert ZettlBorn 1966, GermanMember since 2016Background in the fields of grid management, grid distribution

Monika KrebberBorn 1962, GermanMember since 2019Profound knowledge of business administration and supervisory board experience

Stefan MayBorn 1970, GermanMember since 2019Technical expertise as well as extensive knowledge in co-determination

René PöhlsBorn 1970, GermanMember since 2019 Expert in network operation, HR and experience in co-determination

Andreas ScheidtDeputy Chairman of the Supervisory BoardBorn 1964, GermanMember since 2015In-depth knowledge of the energy business



Terms of Supervisory Board members

8

2021 2022 2023

Dr. Karl-Ludwig Kley

Klaus Fröhlich

Erich Clementi

Dr. Karen de Segundo

Andreas Schmitz

Ewald Woste

2016

Carolina Dybeck Happe

2017 202020192018

Ulrich Grillo 1

Dr. Rolf Martin Schmitz 1

Deborah Wilkens 1

1. Appointed by court



Familiar with legal and compliance as well as sustainability specifically in the dimensions of environmental protection, social concerns and governance (ESG), IT and HR

Skills profile of shareholder representatives ensures superior governance and committee work

9

Self imposed composition targets2

• Independence

• Maximum number of terms

• Sufficient time

• Etc.

• International experience

• Representation of women

• Age diversity

Diversity ConceptExperience in companies or other large organizations,

familiar with capital markets and/or a board member1

of listed organizations

Leadership Experience

Familiar with innovation, disruption and digitization as well as associated new business models and cultural change

Innovation & Digitization

Specific expertise in businesses and markets relevant to E.ON

Markets & Businesses

Expertise in the field of accounting and risk management as well as in auditing of financial statements

Risk & Accounting

Legal & Compliance

Skills Profile

1. Member of Supervisory Board or Executive Board 2. According to Rules of Procedure for the Supervisory Board of E.ON SE



Competencies of shareholder representatives reflection of skills profile

10

Regulated industries

Sales and retail business

Accounting, risk management and auditing of financial statements

Relevant customer sectors

New technology

Energy sector

Capital and financial markets expertise

Experience as management or supervisory board member (strategic expertise)

Leadership experience

Sustainability / ESG

IT

Independence

International experience

HR

Legal and compliance

New business models / cultural change

Innovation, disruption, digitization



Efficient cooperation in board committees

11

Presidial Committee• Prepares management personnel decisions and management remuneration,

approves investment, M&A and financing transactions• Advises the Board of Management on e.g. strategic developments

• Dr. Karl-Ludwig Kley, Chairman• Erich Clementi• Ulrich Grillo

• Andreas Scheidt, Deputy Chairman

• Fred Schulz• Albert Zettl

Members

Nomination Committee• Recommends candidates for election to the Supervisory Board by the Annual

Shareholders Meeting

• Dr. Karl-Ludwig Kley, Chairman• Erich Clementi, Deputy Chairman• Dr. Karen de Segundo

Members

• Dr. Karen de Segundo, Chair• Klaus Fröhlich• Ewald Woste

Innovation and Sustainability Committee• Advises the Management on innovation and disruption/ new businesses• Advises the Management relating to ESG issues

• Stefan May, Deputy Chairman• Clive Broutta• Eugen-Gheorghe Luha

Members

Audit and Risk Committee• Monitors the accounting process and internal control systems• Examines effectiveness of internal control and risk management systems

• Andreas Schmitz, Chairman• Carolina Dybeck Happe• Deborah Wilkens

• Fred Schulz, Deputy Chairman• René Pöhls• Elisabeth Wallbaum

Members

Shareholder Representatives Employee Representatives

For an interim phase during the integration process, all committees (except nomination committee) have been extended to six members



High level of dedication of Supervisory Board members

12

Presidial Committee

Investment and Sustainability Committee

Nomination Committee

Audit and Risk Committee

8 Meetings in 2019

4 Meetings in 2019

5 Meetings in 2019

No Meetings in 2019

6 Meetings in 2019

+

+

+

+

Executive Board:26 Meetings in 2019

Supervisory Board

1. Committee Member since March 12, 2019 2. Committee Member since October 2, 2019 3. Committee Member until October 9, 2019 4. Once as a guest

Attendance of Supervisory Board and committee members in 2019

* Member since September 24, 2019 ** Member since October 1, 2019



13

Efficiency review to continuously improve Supervisory Board work

• The Supervisory Board conducts an efficiency review of its work on a yearly basis, in line with the German Corporate Governance Codex.

• All Supervisory Members fill out a detailed online questionnaire to provide feedback.

• The Chairman conducts bilateral meetings with each Supervisory Board Member on a two year basis and follows up on their remarks.

• The review is considered a very valuable tool as it enables open discussion, mitigates conflicts and builds the basis for continuous improvement.



Remuneration system closely aligns management and shareholders interest

14

• New remuneration system approved by AGM 2016 (91% approval); in place since January 1st, 2017.

• Both variable compensation elements were adjusted and share ownership guidelines were introduced.

• The level of base salary and total compensation as well as the level of pension benefits remained constant.

New Compensation Elements

Share Ownership Guidelines (SOG)

Pension

Long-Term Incentive (LTI)

Bonus (STI)

Base Salary

• Mandatory share ownership:• CEO: 200% of base salary• Other board members: 150% of base

salary

• Criteria: relative TSR vs. STOXX Europe 600 Utilities and absolute share price

• Payout: Cash• Cap: 200% of target value• Zero payout at underperformance

• Yearly contribution max. 21% of pensionable income

• Criteria: EPS, individual and team performance

• Payout: Cash • Cap: 200% of target value• Zero payout at underperformance

+

+

+



The short-term bonus (STI)

15

The STI combines the group’s financial target (EPS) with individual targets.

EPS is the basis for dividend payout, thus closely aligns executive incentives and shareholder interest. EPS is one of E.ON’s key performance indicators, reflects E.ON’s business strategy appropriately and serves as an

indicator of E.ON’s profitability. The multiplier ensures the flexibility to adjust payouts according to individual performance.R

atio

nal

e

STI – Basic Functionality

STITarget Value

Cash Payout

STI Actual Value(Cap at 200%

of Target Value)

x =

Actual EPS vs. Budget1

Company Performance

Target Achievement

Team targets & indiv. targetsMultiplier from

0.5 – 1.5

Individual Performance

x

1. The EPS target for each year is set by the Supervisory Board, taking into account the approved budget.



The long-term incentive (LTI)

16

The Performance Share Plan is based on the comparison of the relative total shareholder return (TSR) with an industry index.

Performance Share Plan – Basic Functionality

The Performance Share Plan is aligned with the capital market perspective by focusing on share price development as well as dividends paid and strengthens shareholder-oriented culture.

Relative TSR is a well-established and accepted performance measure from an investor’s point of view, focusing on absolute share price performance and comparison with peers. R

atio

nal

e

Initial number of granted share units

Final payout in cash

(Cap: 200% of target value)

Share price+

dividendsx xTSR of the E.ON share compared

to the companies of the STOXX® Europe 600 Utilities index

(Cap at 150%)

Relative TSR performance

Target Achievement over 4 Years

=

LTI target value divided by fair

market value per share1

1. The fair market value per share unit at grant date is determined by applying methods accepted in financial mathematics, taking into account the expected future payout, and hence, the volatility and risk associated with performance share plan.



E.ON’s Supervisory Board assumes responsibility for sustainability

17

Sustainability Department

Sustainability Council

Board of Management CEO/CSO 1 Supervisory Board incl. Innovation and Sustainability Committee

chairs chairs

Representatives

1. Chief Sustainability Officer

Decentral Level



The Supervisory Board addresses sustainability topics in each meeting

The Supervisory Board established the Innovation and Sustainability Committee

to further focus the Supervisory Board’s work on ESG topics and

to advise the Board of Management on ESG topics

The Supervisory Board approves ESG targets of the management board

E.ON supporter of TCFD1 since 2019

18

Sustainability Governance

• Board member Johannes Teyssen as Chief Sustainability Officer, supported by Sustainability Council

• Innovation and sustainability committee was established in October 2019

Sustainability Strategy

• Fully focused on the new energy world, enabler of the energy transition

• Unique strategic position with focus on regulated networks

• We help our customers to significantly reduce CO₂

Risk Management

• Assessment of environmental, social and governance (ESG) risks alongside financial risks

• Risk management will be further systemized in accordance to TCFD recommendations in 2020

Climate targets

• Reduce E.ON’s absolute CO₂ footprint by 30% and CO₂ intensity by 50% by 2030

• E.ON to become carbon neutral by 2050

Risk Management

Strategy

Governance

Metrics& Targets

1.Task Force on Climate-related Financial Disclosures (TCFD)

Based on Core Elements of Recommended Climate-Related Financial Disclosures by Task Force on Climate-related Financial Disclosures



Creation of a work environment that protects the health and safety of customers and employees

Responsible social business practices

19

Health and safety Establishing a Caring Culture

Variety of nationalities, cultures, generations and genders in management & workforce

Diversity and inclusion

~25% female representation of first management level below board of new E.ON

Commitment to respect human rights, uphold labour standards, and fight against corruptionHuman Rights

100% code of conduct awareness of all employees

Over 100 different nationalities, different cultures and 5 generations in the workforce



E.ON as a leading sustainable company

20

E.ON Board committed to UN Sustainable Development Goals

E.ON is supporter of the 10 principles of the UN Global Compact

Signatory since 2005

1.-2. Human rights

3.-6. Labour

7.-9. Environment

10. Anti-corruption



E.ON’s sustainability awards, ratings and rankings

21

Text 2Text 1

Text 3Text 1

Text 4Text 1

Text 1Text 1

Overall ESG Score = 81 (Leader Group)Relative Position 11 out of 192

E.ON is index member1, i.e. one of the 120 most advanced companies in Europe + Eurozone

Result: AA

Rating: „C+“

CDP Score: BSector Average: C

E.ON ranks 4th in the Green Utilities Report from “Energy Intelligence (EI) Group”

E.ON ranks 6th out of 30

Overall ESG Score: 3.2 Sub Sector Average Multiutilities: 2.8Industry Average Utilities: 2.7

Text 1Text 1

Text 1Text 1

Text 3Text 1

Text 2Text 1

1. Vigeo/EIRIS was acquired by Moody’s in 2019



22

E.ON is well positioned to succeed in the new energy world with effective governance structures

E.ON is the enabler of a sustainable future of energy

The Supervisory Board actively controls and guides E.ON

E.ON‘s Supervisory Board is qualified, experienced and highly committed

E.ON’s Supervisory Board assumes responsibility for sustainability

Key takeaways Supervisory Board, Committee Work and Remuneration System


Back up

Back upSupervisory Board remuneration in 2018

• The Chairman of the Supervisory Board receives fixed compensation of €440,000.

• The Deputy Chairmen, €320,000.

• Other members of the Supervisory Board receive compensation of €140,000.

• The Chairman of the Audit and Risk Committee receives an additional €180,000.

• The members of the Audit and Risk Committee, an additional €110,000.

• Other committee chairmen receive an additional €140,000; committee members, an additional €70,000.

24

1

Back upCV‘s of shareholder representatives

25

The supervisory board seats are marked as follows: * Membership in other statutory supervisory boards, + Membership in comparable German and foreign supervisory bodies of corporations 1) Listed Company

Dr. Karl-Ludwig KleyChairman of the Supervisory Board

Born 1951, GermanyMember since 2016

Other supervisory board seats

In 1982, Dr. Kley began his career with Bayer AG, where heinitially worked in Corporate Finance and later becameassistant to the Chairman of the Management Board. Hewas Chief Financial Officer of Bayer in Japan, Head of thePharmaceutical Division Sales and Marketing Overseas,Head of the Pharmaceutical Division of Bayer’s Italiansubsidiary and later served as Head of Finance and InvestorRelations of Bayer AG until 1998. From 1998 to 2006, Dr.Kley was a member of the Executive Board of DeutscheLufthansa AG, where he served as Chief Financial Officer,before joining Merck KGaA as a member and Vice Chairmanof the Executive Board in 2006. From April 2007 until April2016 he was Chairman of the Executive Board and CEO ofMerck KGaA.

* BMW AG 1)

* Deutsche Lufthansa AG (Chairman) 1)

Erich ClementiDeputy Chairman of the Supervisory Board

Born 1958, ItalyMember since 2016

Mr. Clementi began his career with IBM in Italy in 1984.Initially, he held various positions in IBM’s sales, marketing& engineering functions in Eastern Europe and Germany,before he was appointed Vice President Enterprise SystemsGroup for Europe, the Middle East and Africa in the UnitedKingdom. In 2003, he moved to the United States, where hefirst held the position of General Manager, was thenappointed Vice President Strategy & General ManagerEnterprise Initiatives and, prior to his most recent position,Senior Vice President & Group Executive Global TechnologyServices in the United States. From 2015 to 2018,Mr. Clementi was Senior Vice President IBM Global Marketsand Chairman Europe.

None


Mr. Fröhlich joined the drive development of BMW AG inJuly 1987 as a development engineer. In 1993, he tookover the management of the basic development of the V8engines. From 1995, he was responsible for the projectmanagement of the BMW engine programs for the vehiclesof the Rover Group. From 1996 to 1998, Mr. Fröhlichworked for the BMW subsidiary Rover Group in the UK asChief Engineer for the propulsion of future Land Rovervehicles. In 1999, he moved back to the enginedevelopment department of BMW AG in Munich andmanaged various functions of the Otto engine development.From 2005 to 2007, he was responsible for cross-brandproduct planning and subsequently for the brand andproduct strategies of the BMW Group. In 2012, he headedthe small and mid-sized vehicle model series. On December9, 2014, Klaus Fröhlich was appointed to the Board ofManagement of BMW AG, responsible for development.

None


Klaus Fröhlich



26


Ulrich Grillo



Mr. Grillo worked for Arthur Andersen & Co. GmbH. In 1989he joined A. T. Kearney GmbH and from 1993 to 2001 heworked for Rheinmetall-Group. From 2001 to 2004, Mr.Grillo was a member of the board of management of Grillo-Werke AG. In August 2004, Ulrich Grillo was appointedchairman of the board of management of Grillo-Werke AG.From 2016 to 2019 Mr. Grillo was a member of thesupervisory board of innogy SE and of its nominationcommittee as well as its executive committee. Since 2016,he is a member of the Supervisory Board of Rheinmetall AGand its Chairman since 2017.

* Rheinmetall AG1)

+ Grillo Zinkoxid GmbH+ Zinacor S.A.

Carolina Dybeck Happe

Born 1972, SwedenMember since 2016

At the beginning of her career, Ms. Dybeck Happe heldvarious positions with EF Education First Ltd. in the UnitedStates, Switzerland and Russia. From 2000 to 2002, shewas Chief Financial Officer of Establish AB in Sweden. In2002, she joined ASSA ABLOY in Germany as ChiefFinancial Officer for the German-speaking regions; in 2007,she went to ASSA ABLOY in the United Kingdom, whereshe served as Chief Financial Officer for Europe, the MiddleEast and Africa. In 2011 she went to Trelleborg AB inSweden, where she was Chief Financial Officer. Since 2012she served as Chief Financial Officer at ASSA ABLOY AB, apublicly listed company in Sweden. Since 2019 she wasChief Financial Officer of A.P. Moller - Maersk A/S. End ofNovember 2019, General Electric named Ms. DybeckHappe as the company’s CFO, effective in early 2020.

+ Schneider Electric SE


Mr. Schmitz began his career with HSBC Trinkaus &Burkhardt AG in 1989. Until 2000, he held various positionsin the corporate clients business and in investment banking.From 2000 to 2002, he was a member of the extendedmanagement board, in charge of Investment Banking and,since 2001, additionally in charge of Debt Capital Markets.From 2002 to 2004, he was a personally liable partner,responsible for Corporate & Investment Banking and DebtCapital Markets, before he was appointed Spokesman ofthe Personally Liable Partners. From 2006 to 2015, he wasChairman of the Management Board, and since June 2015,he has been Chairman of the Supervisory Board of HSBCTrinkaus & Burkhardt AG.

* HSBC Trinkaus & Burkhardt AG (Chairman)1)

* Scheidt & Bachmann GmbH (Chairman)


Andreas Schmitz



27

Dr. Rolf Martin Schmitz



After working for STEAG AG in Essen and VEBA AG inDüsseldorf, Mr. Schmitz became a member of the ExecutiveBoard of rhenag Rheinische Energie AG in Cologne,Germany, in 1998 before serving on the Executive Board ofThüga AG in Munich, Germany, from 2000 to 2004. He wasthen Chairman of the Management Board of E.ONKraftwerke GmbH in Hanover, Germany, until September2005 and later CEO of RheinEnergie AG in Cologne. He hasbeen a member of the Executive Board of RWE AG sinceMay 2009, Chairman (CEO) since October 2016 andadditionally Labor Director of RWE AG since May 2017.

* Amprion GmbH* RWE Generation SE (Chairman)* RWE Power AG (Chairman)* RWE Supply & Trading GmbH* TÜV Rheinland AG

Dr. Karen de Segundo

Born 1946, NetherlandsMember since 2008

Dr. de Segundo began her career in 1971 when she joinedthe Royal Dutch / Shell Group, where she initially pursuedan international commercial career in the gas and powerbusiness as well as in sales and marketing of oil products.She held various positions in five countries before she wasappointed as a member of the Shell Brazil ManagementBoard in charge of oil products in 1990. In 1996, Dr. deSegundo became External Affairs Director for the ShellGroup. In 1998, she was appointed Chief Executive Officerof Shell Gas & Power and Chairman of Shell Coal; and fromthe year 2000 until 2005, when she left Shell, she served asChief Executive Officer at Shell Renewables and Presidentof Shell Hydrogen.

None


Deborah Wilkens started her career in 1993 working for PriceWaterhouse Privatisation Service GmbH in Berlin. In 1997, shejoined Deutsche Bank in London as a Manager in the Pan-European Utilities Research Team. From 1999 to 2000, she wasVice President of Equity Research for Pan-European EnergyUtilities Research Team at Credit Suisse First Boston in London.Subsequently, Ms. Wilkens was with Goldman SachsInternational in London from 2000 to 2016. As of 2003 shewas Managing Director in the field of stock analysis, followedby the position as Head of stock analysis for European energysupply companies. In 2014, Ms. Wilkens became Head of stockanalysis for European energy and raw materials and responsiblefor the sector research teams including utilities, oil & gas, oilservices, metals, mining, steel and paper and pulp sector. SinceJune 2016, Ms. Wilkens has been a management consultant..

None


Deborah Wilkens

Born 1971, USAMember since 2019

+ Kärntner EnergieholdingBeteiligungs GmbH

+ KELAG-KärntnerElektrizitäts-AG

+ Jaeger-Gruppe (Chairman)



28

Ewald Woste



Mr. Woste began his professional career as assistant to themanagement of heroal, before joining Benteler AG as acontroller in 1989. He has worked in the energy industrysince 1992, when he joined the municipal utility ofPaderborn. From 1998 to 2003, he was Managing Directorof Städtische Werke Nürnberg GmbH and member of theboards of management of Verkehrsaktien-gesellschaftNürnberg and N-ERGIE Aktiengesellschaft. In 2004, he wasappointed Chairman of the Board of Management of MainovaAG, and from 2007 to 2014, he served as Chairman of theBoard of Management of Thüga Aktiengesellschaft. From2010 to 2014, he was President of BDEW Bundesverbandder Energie- und Wasserwirtschaft e.V. (German Associationof Energy and Water Industries). Since 2015, he has beenworking as a management consultant.

* Bayernwerk AG* GASAG AG* GreenCom Networks AG

+ Energie Steiermark AG+ Deutsche Energie Agentur GmbH (dena)


Back upManagement remuneration - short-term bonus (STI)

29

Short-Term Bonus (STI)Base Salary

Bonus (STI)

Target Cash Comp.


Target Direct Comp.

Pension

Total Target Comp.

Performance targets / combination

Minimum / Cap

Payout

Special compensation

• Company Performance: EPS• Individual Performance: team targets, individual targets• Targets are combined by multiplying

• Company Performance: 0% - 200%• Individual Performance: 50% - 150%• Total cap (incl. special compensation components): 200% of target amount

• Payout in cash

• The Supervisory Board may grant special compensation as part of the annual bonus for outstanding achievements.

+

=

+

=

+

=

The Short-Term Bonus is structured as follows:

Back upManagement remuneration - long-term incentive (LTI)

30

The Long-Term Incentive is designed as a virtual Performance Share Plan.

Long-Term Incentive

Performance targets

Target achievement

Performance period

Cap

▪ To calculate the final number of virtual shares, the TSR-values of all peer companies are ranked and E.ON’s relative position is determined based on the percentile reached

▪ Threshold: No grant of virtual shares if target achievement is below the threshold defined by the Supervisory Board

▪ Cap: Grant of virtual shares is capped at 150%

• 4 years

• Payout is capped at 200% of target amount

Plan type Performance Share Plan

Payout ▪ Payout in cash*

Share Ownership Guidelines*

▪ To further strengthen E.ON’s capital market focus and shareholder-oriented culture, Share Ownership Guidelines were introduced in 2017

▪ CEO: 200% of base salary; Ordinary Board member: 150% of base salary

Base Salary

Bonus (STI)

Target Cash Comp.


Target Direct Comp.

Pension

Total Target Comp.

+

=

+

=

+

=

1. Until the required investment is reached, Management Board members are obligated to invest net payouts from their long-term compensation in actual E.ON stock.

Performance targets

Target achievement

Performance period

• Relative Total Shareholder Return (TSR) compared to the companies of the STOXX® Europe 600 Utilities

• To calculate the final number of virtual shares, the TSR-values of all peer companies are ranked and E.ON’s relative position is determined based on the percentile reached

• Threshold: No grant of virtual shares if target achievement is below the threshold defined by the Supervisory Board

• Cap: Grant of virtual shares is capped at 150%

Payout • Payout in cash1

Share Ownership Guidelines*

• To further strengthen E.ON’s capital market focus and shareholder-oriented culture, Share Ownership Guidelines were introduced in 2017

• CEO: 200% of base salary; Ordinary Board member: 150% of base salary

Back upManagement remuneration - pension

31

The pension scheme is designed as defined contribution scheme1:

Pension scheme1

Plan type

Pension account

Vesting

Interest rate

• Defined contribution plan, capital units

• Yearly contribution from 1th of January 2017 onwards of maximum 21% of pensionable income (base salary + STI)

• Fixed base contribution 16%• Matching contribution 5%2

• According to the companies pension act (Betriebsrentengesetz – BetrAVG)

• Interest rate used for each year is based on the return of long-term German treasury notes

Retirement age • At the age of 62

Covered events • Retirement, invalidity, death

Payout • Lifelong pension, annual installment or lump sum

Base Salary

Bonus (STI)

Target Cash Comp.


Target Direct Comp.

Pension

Total Target Comp.

+

=

+

=

+

=

1. Dr. Teyssen was appointed to the Management Board before 2010, thus he is granted a defined benefit scheme.2. The requirement for the matching contribution to be granted is that the Management Board member contributes, at a minimum, the same amount by having it withheld from his compensation.

Back upManagement remuneration - other contractual terms

32

Settlement cap

Settlement for change-of-control

Non-compete clause

Other fringe benefits

• According to German Corporate Governance Code (GCGC): Maximum of two years’ total compensation or the total compensation for the remainder of the service agreement

• Settlement equal to in general two target salaries (base salary, target bonus, and fringe benefits), reduced by 20 percent

• 6 months, pro rated compensation amounting to 100% of base salary + STI, but at least 60% of the last total compensation

• Chauffeur-driven company car• Necessary telecommunications equipment• Coverage of costs that include those for a periodic medical examination• Coverage of premiums of accident insurance policy

Back upE.ON‘s authorized and conditional capital

Up to 175m EUR

Authorized Capital

with subscription rights

withoutsubscription rights

Contribution in cash and / or in kind

Up to 460m EUR

Up to 10% of share capital

Conditional Capital

Up to 20% of share capital

Contribution in cash

Contribution in kind

max. 20% of sharecapital

max. 10% of sharecapital

max. 460m EUR

33

Capital authorizations as approved by AGM 2017 prior to 20% capital increase vs. contribution in kind for the RWE/innogy transaction in 2019

E.ON intends to renew authorizations in 2020 taking into account investor requirements as well as company interests

Back upAudit

• Current audit firm PricewaterhouseCoopers GmbH,

Wirtschaftsprüfungsgesellschaft

• Current auditor Markus Dittmann (since 2014)

Aissata Touré (since 2015)

• Auditor from 2021 onwards: KPMG

(subject to AGM appointment)

• Other attestation services

• This item includes mandatory audit-related services due to

legal requirements as well as voluntary audit-related services

• Non-audit services

• E.ON’s audit committee has defined a cap for non-audit

services which is closely monitored.

34

External Verification

Back upE.ON’s green bond framework

35

Use of Proceeds Project Evaluation & Selection

Management of Proceeds

Reporting

Renewable energy

Energy efficiency

Clean transportation

+

1. https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/

E.ON’s Green Bond Framework is aligned with the ICMA Green Bond Principles 20181 and Eligible Green Projects are aligned with draft EU taxonomy

Back upUse of green bond proceeds: Clear focus on the energy transition

361. https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/2. In terms of renewable energy and energy efficiency grid projects renewable energy refers to energy from wind, solar (PV), biomass/ biomethane, landfill and sewage gas, hydro and power-to-x3

3. Power-to-X refers to various technologies for storage or other use of surplus electricity in times of oversupply from volatile renewable energies infeed such as solar energy, wind energy and hydropower. Power-to-X technologies enable sector coupling and reduce curtailment of renewable energies increasing the share of renewables in the energy mix4. The feed-in ratio is defined as energy feed-in from renewables divided by all decentral energy feed-in of E.ON’s fully consolidated grid businesses

https://www.icmagroup.org/green-social-and-sustainability-bonds/green-bond-principles-gbp/

Your E.ON contacts

Investor RelationsT +49 (201) 184 28 [email protected]

37

Melanie Osterried T +49 (201) 184 65 38

Manager Corporate Finance [email protected]

Verena Nicolaus-Kronenberg T +49 152 09331400

Head of Investor Relations [email protected]

Martina Burger T +49 (201) 184 28 07

Manager Investor Relations [email protected]

Financial calendar & important links

Financial calendar

March 25, 2020 Annual Report 2019 & Capital Markets Day (London)

May 12, 2020 Quarterly Statement: January – March 2020

May 13, 2020 2020 Annual Shareholders Meeting

August 12, 2020 Half-Year Financial Report: January – June 2020

November 11, 2020 Quarterly Statement: January – September 2020

Important links

Presentations https://www.eon.com/en/investor-relations/presentations.html

Facts & Figures 2019 https://www.eon.com/content/.../presentations/facts-and-figures-2019.pdf

Annual Reports https://www.eon.com/en/investor-relations/financial-publications/annual-report.html

Interim Reports https://www.eon.com/en/investor-relations/financial-publications/interim-report.html

Shareholder Meeting https://www.eon.com/en/investor-relations/shareholders-meeting.html

Green Bond Framework https://www.eon.com/en/investor-relations/bonds/green-bonds.html

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https://www.eon.com/en/investor-relations/presentations.html

https://www.eon.com/content/.../presentations/facts-and-figures-2019.pdf

https://www.eon.com/en/investor-relations/financial-publications/annual-report.html

https://www.eon.com/en/investor-relations/financial-publications/interim-report.html

https://www.eon.com/en/investor-relations/shareholders-meeting.html

https://www.eon.com/en/investor-relations/bonds/green-bonds.html

Disclaimer

This presentation contains information relating to E.ON Group ("E.ON") that must not be relied upon for any purpose and may not be redistributed, reproduced,published, or passed on to any other person or used in whole or in part for any other purpose. By accessing this document you agree to abide by the limitations set outin this document as well as any limitations set out on the webpage of E.ON SE on which this presentation has been made available.

This document is being presented solely for informational purposes. It should not be treated as giving investment advice, nor is it intended to provide the basis for anyevaluation or any securities and should not be considered as a recommendation that any person should purchase, hold or dispose of any shares or other securities.

The information contained in this presentation may comprise financial and similar information which is neither audited nor reviewed and should be consideredpreliminary and subject to change.

Some of the information presented herein is based on statements by third parties. No representation or warranty, express or implied, is made as to, and no relianceshould be placed on, the fairness, accuracy, completeness or correctness of this information or any other information or opinions contained herein, for any purposewhatsoever.

This presentation may contain forward-looking statements based on current assumptions and forecasts made by E.ON management and other information currentlyavailable to E.ON. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financialsituation, development or performance of the company and the estimates given here. E.ON does not intend, and does not assume any liability whatsoever, to updatethese forward-looking statements or to conform them to future events or developments.

Neither E.ON nor any respective agents of E.ON undertake any obligation to provide the recipient with access to any additional information or to update thispresentation or any information or to correct any inaccuracies in any such information.

Certain numerical data, financial information and market data (including percentages) in this presentation have been rounded according to established commercialstandards. As a result, the aggregate amounts (sum totals or interim totals or differences or if numbers are put in relation) in this presentation may not correspond in allcases to the amounts contained in the underlying (unrounded) figures appearing in the consolidated financial statements. Furthermore, in tables and charts, theserounded figures may not add up exactly to the totals contained in the respective tables and charts.

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