Compensation report for the Management Board and the Supervisory Board of Conergy AG

The compensation report below is part of the Group management report. The report explains the structure and the level of compensation applicable to the Management Board and the Supervisory Board The compensation report was prepared in accordance with the recommendations of the German Corporate Governance Code and contains all disclosures that must be made an integral part of the notes pursuant to 314 para. 1 no.6 German Commercial Code and the Group management report pursuant to 315 para. 2 no. 4 German Commercial Code and the Management Board Compensation Disclosure Act (Gesetz über die Offenlegung der Vorstandsvergütung – VorstOG). Information about the shareholdings of the Management Board and the Supervisory Board will also be presented in this compensation report.

Compensation of the Management Board

Pursuant to the recommendations of the German Corporate Governance Code, the total compensation paid to the members of the Management Board comprises both fixed and variable components. The variable compensation of the Management Board comprises an annual performance bonus, the amount of which is contingent on the achievement of goals that the Supervisory Board fixes in advance at its discretion. The variable component also contains share-based compensation elements in the form of stock appreciation rights (phantom stock options).

The appropriate amount of compensation paid to the individual members of the Management Board is determined by the Supervisory Board based on performance appraisals, taking all payments from the Group into account. Criteria for determining the appropriateness of compensation are, in particular, the tasks of the respective member of the Management Board, his personal performance, the performance of the Management Board as well as the economic situation, the performance and outlook of the enterprise taking into account its peer companies.

The fixed component largely comprises compensation that is paid monthly as a salary and is not based on performance. In addition, all members of the Management Board receive benefits in the form of non-cash compensation such as the option to use company cars for private purposes as well as contributions to their retirement plans as well as to insurance expenses; these benefits are part of their compensation and thus taxable. As a rule, all members of the Management Board are entitled equally to these benefits but the amounts vary according to personal needs. No Management Board member was granted loans or advances in the reporting year, nor did the Company incur any contingent liabilities on their behalf.

Compensation of the Supervisory Board

The policy for the compensation of the Supervisory Board was established by the General Shareholders’ Meeting in 2004 and 2009 based on the joint proposals of the Management Board and the Supervisory Board. The compensation of the Supervisory Board takes into consideration the responsibilities and duties of each of the Supervisory Board members as well as the Company’s economic performance. Accordingly, Supervisory Board members have been paid fixed
compensation of TEUR 16.5 per annum since the 2007 financial year. They also receive performance-based components in addition to this fixed compensation.

Members of the Supervisory Board are thus paid an additional EUR 500 per one-million euro increment of annual net income up to a maximum of TEUR 11 in performance-based compensation. The Chairman of the Supervisory Board is paid two-and-a-half times and the Deputy Chairman one-and-a-half times the fixed and variable compensation paid to regular members of the Supervisory Board. Each member of the Supervisory Board also receive an attendance fee of EUR 1,000 for each meeting in which the member participates. Finally, committee members are paid EUR 1,000 for each day on which they attend a committee meeting.