1 CONSOLIDATED CORPORATE GOVERNANCE REPORT • COMMITMENT TO THE AUSTRIAN CODE OF CORPORATE GOVERNANCE • REMUNERATION OF MANAGEMENT BOARD RISES ON HIGHER VARIABLE INCOME • REGULAR EVALUATION OF MANAGEMENT AND SUPERVISORY BOARDS • CONTINUOUS OPTIMISATION OF LEGAL AND ETHICAL STANDARDS General principles CONSOLIDATED REPORT The present report is a consolidated corporate covers the corporate governance report as governance report as defined by Section 267a defined by Section 243b UGB. UGB (Austrian Commercial Code) which also COMMITMENT TO THE AUSTRIAN CODE OF CORPORATE GOVERNANCE The consolidated corporate governance report the Austrian system of corporate governance explains the rules, structures and processes im- and of Austrian business life. plemented by STRABAG SE in the interest of a well-functioning corporate governance system. The Austrian Code of Corporate Governance We are fully and without exception committed to defines three categories of rules: L-rules refer to the Austrian Code of Corporate Governance legal requirements with mandatory compliance (ÖCGK) and its aims and we see compliance on the part of publicly listed companies in Aus- with all the rules contained within the Code as a tria. Deviation from C-rules (comply or explain) top priority. This commitment represents a must be explained and the reasons stated. self-obligation on the part of STRABAG SE with R-rules are recommendations requiring neither the aim to boost shareholder confidence and to disclosure nor explanation. The version of the constantly optimise our high internal legal, be- Code that was valid for the 2016 financial year havioural and ethical standards. We are further is the January 2015 version – it is available obligated to fulfil the standards of the Code due for download from the website of the Austrian to the listing of our shares in the Prime Market Working Group for Corporate Governance segment of the Vienna Stock Exchange. (www.corporate-governance.at) and from STRABAG SE (www.strabag.com > Investor The Austrian Code of Corporate Governance is Relations > Corporate Governance > Formal a set of rules for good corporate governance Obligation and Evaluation). and control systems on the Austrian capital market. It was introduced in 2002 in line with The Management Board and the Super- international standards and has been revised visory Board of STRABAG SE declare that several times since. The aim of the Code is to STRABAG SE has complied with all L-rules of establish a responsible system of management the Austrian Code of Corporate Governance as and supervision of companies that is geared to- well as all C-rules with the exception of those ward creating sustainable, long-term value while rules stated and explained below. The company ensuring a high level of transparency for all furthermore endeavours to abide not only by the stakeholders. Investors and issuers therefore minimum requirements but also by all of the recognise the Code as an indispensable part of Code’s R-rules without exception. 2 NON-COMPLIANCE WITH THE AUSTRIAN CODE OF CORPORATE GOVERNANCE C-Rule 2: On the basis of a resolution passed by Board is based on the scope of the work, the re- the Annual General Meeting, the shares of sponsibilities and the personal performance of STRABAG SE include two special registered the individual Management Board member, the shares with an associated right to nominate one achievement of the corporate goals as well as the member of the Supervisory Board each. The reg- size and the economic situation of the company. istered shares bind significant shareholder groups The variable component of the remuneration also more strongly to the company and guarantee the considers sustainable, long-term, multi-year per- availability of know-how from important stake- formance criteria if these can be measured. It may holders for the Supervisory Board. This is in the not exceed a fixed maximum. It is nearly impossi- interest of good corporate governance and repre- ble, however, to meaningfully define non-financial sents a sustainable advantage for STRABAG SE, criteria that would be applicable equally to all which further benefits especially from the com- segments. Very general non-financial criteria mitment, expertise and experience of the respec- don’t say very much about the sustainable suc- tive Supervisory Board member. It also significantly cess and economic situation of the company. On improves the contact and communication between the other hand, a differentiated definition of the company and its shareholders and promotes non-financial criteria for each business segment the transparency of the shareholder structure. would be to the detriment of transparency and ease of understanding. As a result of thorough REPORT GOVERNANCE CORPORATE C-Rule 27: It is a key concern for STRABAG SE debate in the Executive Committee of the that the remuneration of the Management Board STRABAG SE Supervisory Board, the decision members be made according to measurable cri- was made not to use non-financial criteria to cal- teria in a way that is transparent and easily com- culate the remuneration of the members of the prehensible. The remuneration of the Management Management Board. Boards MANAGEMENT BOARD Management Board composed of five members Peter Krammer, Thomas Birtel, Hannes Truntschnig, Christian Harder, Siegfried Wanker (from left to right) 3 Supervisory board mandates or similar functions in national or End of current foreign companies not included Year of First period of in the consolidated financial Management and supervisory tasks at Name birth Position held Responsible for appointment office statements important4) subsidiaries Dr. Thomas 1954 CEO Central Staff 1 January 31 December Deutsche Bank AG, Germany Bau Holding Beteiligungs AG, Austria Birtel Divisions and 2006 (Member 2018 (Member of the Advisory Board) (Chairman of the Supervisory Board) Central Divisions of the Zentrale Technik, Management HDI-Global SE, Germany Ed. Züblin AG, Germany (Chairman BMTI and TPA Board) (Member of the Advisory Board) of the Supervisory Board) Group Division 3L 15 June 2013 VHV Allgemeine Versicherung STRABAG AG, Germany (Chairman Russia (CEO) AG, Germany (Member of the of the Supervisory Board) Supervisory Board) STRABAG AG, Austria (Chairman VHV Vereinigte Hannoversche of the Supervisory Board) Versicherung a.G., Germany STRABAG Sp. z o.o., Poland (Chairman of (Member of the Supervisory Board) the Supervisory Board) VHV Holding AG, Germany (Member of the Supervisory Board) Mag. 1968 CFO Central Division 1 January 31 December Syrena Immobilien Holding AG, AKA Alföld Koncessziós Autópálya Christian BRVZ 2013 2018 Austria Zártkörüen Müködö Részvény-társaság, Harder Hungary (Member of the Supervisory Board) Bau Holding Beteiligungs AG, Austria (Member of the Supervisory Board) Ilbau Liegenschaftsverwaltung AG, Germany (Chairman of the Super- visory Board) STRABAG AG, Austria (Vice Chair- man of the Supervisory Board) STRABAG Property & Facility Services GmbH, Germany (Member of the Supervisory Board) Dipl.-Ing. 1966 Member Segment 1 January 31 December None Bau Holding Beteiligungs AG, Austria Dr. Peter of the North + West1) 2010 2018 (Member of the Supervisory Board) Krammer Management Ed. Züblin AG, Germany Board (Member of the Supervisory Board) STRABAG AG, Germany (Member of the Supervisory Board) STRABAG AG, Austria (Member of the Supervisory Board) STRABAG Sp. z o.o., Poland (Member of the Supervisory Board) Mag. Hannes 1956 Member Segment 1 April 1995 31 December Raiffeisen evolution project AKA Alföld Koncessziós Autópálya Truntschnig of the International + 2018 development GmbH, Austria5) (Vice Zártkörüen Müködö Részvény- Management Special Divisions2) Chairman of the Advisory Board társaság, Hungary (Member of the Board until 31 March 2016) Supervisory Board) Syrena Immobilien Holding AG, Bau Holding Beteiligungs AG, Austria Austria (Vice Chairman of the (Member of the Management Board) Supervisory Board) Ilbau Liegenschaftsverwaltung AG, Germany (Vice Chairman of the Supervisory Board) STRABAG AG, Austria (Member of the Supervisory Board) STRABAG Property & Facility Services GmbH, Germany (Chairman of the Supervisory Board) STRABAG Sp. z o.o., Poland (Member of the Supervisory Board Dipl.-Ing. 1968 Member Segment 1 January 31 December None Bau Holding Beteiligungs AG, Austria Siegfried of the South + East3) 2011 2018 (Member of the Management Board) Wanker Management (exept Division Ilbau Liegenschaftsverwaltung AG, Board 3L Russia) Germany (Member of the Super- visory Board) STRABAG AG, Austria (Member of the Supervisory Board) STRABAG Property & Facility Services GmbH, Deutschland (CSTRABAG a.s., Czech Republic (Member of the Supervisory Board) Dr. Thomas Birtel Thomas Birtel graduated with a doctorate Group. He joined the STRABAG Group in 1996 degree in economics from Ruhr-University as a member of the Management Board of Bochum in 1982. He began his career in 1983 at STRABAG Hoch- & Ingenieurbau AG, was the former German trading and plant construc- appointed to the Management Board of tion group Klöckner & Co, where he advanced STRABAG AG, Cologne, in 2002 and to the to head of accounting for Klöckner Industrie- Management Board of STRABAG SE in 2006. Anlagen GmbH. In 1989, he moved on to a Thomas Birtel has held the position of CEO of management position at Sweden’s Frigoscandia STRABAG SE since 15 June 2013. 1) North + West: Germany, Poland, Benelux, Scandinavia, Ground Engineering, Waterway Construction 2) International + Special Divisions: Tunnelling,