The Supervisory Board assesses the performance of the Executive Board, including on the implementation of the sustainability strategy. The Remuneration Committee is authorized to determine the Executive Board’s remuneration, including the structure of the remuneration system and actual target achievement. The Executive Board remuneration consists of fixed and variable remuneration elements. Selected employees at senior management level are also eligible to participate in the Long-Term Incentive Plan (LTIP). The variable remuneration – LTIP and the annual bonus – includes performance criteria related to the Company’s sustainability and greenhouse gas (GHG) emissions performance. Long-term shareholder and other stakeholder interests are reflected in the performance-related remuneration, which includes both long-term and short-term elements.
The Remuneration Policy for the Executive Board was approved at the Annual General Meeting in June 2022. It sets out GHG and ESG targets as forming part of the annual bonus and LTIP. The proportion of variable remuneration linked to sustainability-related targets comprises 15% of the annual bonus, based on achieving the defined reduction in net absolute Scope 1 and 2 GHG emissions, and 30% of the Long-Term Incentive Plan (LTIP), based on achieving ESG targets. These ESG targets aim to reduce the net absolute GHG Scope 1 and 2 emissions (weighted with 20%) and improve diversity at the OMV Group (weighted with 10%). The GHG targets in the annual bonus (i.e., reducing Scope 1 and 2 emissions) and the LTIP (i.e., reducing the net absolute GHG Scope 1 and 2 emissions) are clearly linked to and directly derived from the OMV GHG emissions reduction targets for 2030 and the required reduction pathways up to 2030 compared to the base year 2019.
The Remuneration Committee has established an OMV-specific catalog of criteria derived from OMV’s Strategy 2030, based on which it chooses and approves the specific ESG targets and their weighting for each LTIP tranche. Based on the current Remuneration Policy, reducing GHG emissions will always constitute an ESG target in the LTIP. GHG and ESG targets and their weighting are published in the Remuneration Report for the grant year, which can be found on the OMV website. Based on predefined criteria (e.g., fatalities, TRIR, process safety) and in comparison, to industry benchmarks, a health and safety malus of between 0.8 and 1.0 is applied to the overall target achievement for both the annual bonus and the LTIP. In the event of severe incidents, the Remuneration Committee may reduce the payout to zero. This malus considers OMV’s commitment to health and workplace safety. An external review of actual target achievement is performed by OMV’s auditor, and the results are communicated to the Remuneration Committee and Supervisory Board.