Wienerberger: Statements in the 2021 compensation report of the chairman of the supervisory board, Peter Steiner
Statements in the 2021 compensation report by Peter Steiner – Chairman of the Supervisory Board of Wienerberger AG
1) CEO severance pay
When Mr. Scheuch joined Wienerberger in 1991, he was entitled to a common defined benefit severance package based on a Scheme under the Austrian Employees Act. He already reached the maximum entitlement in terms of duration (> 25 years of employment with Wienerberger) in 2016 (while his previous employment contract was in progress), but the amount continued to increase each year depending on the pay increase. The provision (the discounted right) at 31.12.2020 amounted to € 2,600,512.
As part of my own election to the presidency as of January 1st, 2021, I discussed with the CEO our ambitions for the next 5 years and to underpin the close collaboration planned between the President and the CEO, the company has entered into a renewed 5-year contract with Mr. Scheuch. In this context, we have reviewed the terms of the current contract and identified in particular the above severance package as internationally unusual and therefore difficult to explain to international/non-Austrian shareholders. The Supervisory Board wanted to seize the opportunity of the extension to exclude this clause for the future but therefore had to pay the acquired part of the right. This resulted in a cash settlement of €2.5 million, actually lower than the discounted provision at that time. This discount reflected the previous payment and was in favor of Wienerberger because – again – the severance payment would have continued to increase year on year based on the increase in remuneration following indexation.
In summary, following the early cash settlement of € 2,500,000, Wienerberger shareholders benefited
• of € 100,512 (difference between the discounted fee as of 31.12.2020 and the actual payment in cash) and
• the regularizationit is rising annual inflation until the CEO leaves the company; especially in times of high inflation, this represents a material saving for the shareholders of the Wienerberger Group.
In addition, the cash settlement eliminated an unusual severance package considering international/non-Austrian shareholders.
2) CFO Severance Pay Statement
Carlo Crosetto succeeded the previous CFO (who held this position for 12 years) on March 1, 2020. As highlighted in the 2021 annual report (page 171), in the interest of all shareholders, the remuneration committee deliberated on the terms and conditions with Carlo Crosetto following the early termination of his mandate at the end of February 2021.
In Austria – as in Germany – we have a fixed-term contract with a typical duration of 3 years and a severance pay cap of 24 months of total remuneration (base + variable). Since Carlo Crosetto’s contract was terminated after 1 year of service, he contractually benefited from a severance indemnity covering 24 months of total compensation at 100% achievement of objectives. As such, the severance package was in accordance with the contract and all other standards, legally leaving no room for negotiation.
On March 1, 2021, Wienerberger announced the promotion of Gerhard Hanke to become Wienerberger’s new CFO from March 1, 2021 as an internal candidate. Gerhard Hanke has held various management positions – very often combining responsibilities in Finance and Operations – with the Wienerberger Group for more than 20 years, most recently as COO East/Central Region of the Wienerberger Building Solutions Business Unit.
Gerhard Hanke has settled into his new role very well and is already receiving a lot of appreciation from shareholders. The supervisory board is grateful to have had such an internal candidate with Gerhard’s profile and competence.
It is also worth highlhighlighting that 2021 was the most successful year in Wienerberger’s more than 200-year history, demonstrating that Wienerberger has built the right team to execute. Specifically, in 2021, Wienerberger delivered the record results below:
• 18% IRevenues up to €3,971.3 million (2020: €3,354.6 million)
• 24% increase in EBITDA to €694.3 million (2020: €558.0 million)
• 6% increase in free cash flow to €420.6 million (2020: €397.3 million)
Gerhard has already contributed to this success.
Chairman of the Supervisory Board of Wienerberger AG