Corporate Governance

Corporate Governance


The corporate governance of 1&1 AG is geared to responsible and sustainable value creation. Efficient cooperation between the Management Board and the Supervisory Board, respect for the interests of the shareholders and open and transparent decision-making structures are of primary importance.

Corporate Governance


Corporate governance is defined as the responsible management and control of companies, applied with the aim of creating long-term added value. Factors such as efficient cooperation between the Management and Supervisory Boards, acting in the shareholders' interests, and transparent and open corporate communication all play a key role in this.

1&1 is a listed stock corporation under German law, that is, it is run by a Management Board and Supervisory Board. We value corporate governance highly and to this end both of our boards work closely together. Intensive and ongoing dialogue is essential for the efficient running of the company. We have further intensified this dialogue and improved it step by step in accordance with national and international standards. By providing open, prompt and regular information, as well as a transparent decision-making structure, we promote the confidence of our investors, customers, employees and the interested public.

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The principles of the German Corporate Governance Code - responsible management and control of the company - are not new for the Management and Supervisory Boards of 1&1 AG. Many of these requirements arise directly from the German Stock Corporation Act (Aktiengesetz), the German Securities Trading Act (Wertpapierhandelsgesetz) and other laws. As a result, we have focused strongly on these principles in the past and in the main, they are already firmly anchored in our corporate governance.

Version December 2021

Corporate Governance

Rules of Procedure of the Supervisory Board


Auditor


The Group’s accounting is based on the principles of the International Financial Reporting Standards (IFRS, as they are applicable in the EU) while taking into consideration the provisions of Section 315e HGB. The annual financial statements relevant for the disbursement and tax assessments, on the other hand, are prepared in accordance with the provisions of the German Commercial Code (HGB). Single and consolidated annual financial statements are audited by impartial chartered public accountants.

The General Meeting adopts a resolution appointing the auditor. PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf, has been appointed to perform the audit for fiscal year 2023. The Supervisory Board awards the audit engagement, determines the focal points of the audit and the audit fee and reviews the impartiality of the auditor.

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft has been the auditor for 1&1 AG and the Group since fiscal year 2022. Mr Erik Hönig, chartered public accountant, has been in charge of the audit since fiscal year 2023.

Abschlussprüfer

Declaration Of Conformity


The corporate management of 1&1 AG, a German stock corporation listed on the stock exchange, is governed first and foremost by German Company Law [Aktiengesetz, AktG] and the provisions of the German Corporate Governance Codex (DCGK).

The term corporate governance stands for responsible management and control of companies, applied with the aim of creating long-term added value. Efficient cooperation between management and supervisory boards, respect for shareholders' interests and openness and transparency of corporate communications are major aspects of good corporate governance.

The Management Board and Supervisory Board of 1&1 AG regard themselves to be bound by the obligation to secure the existence of the Company and sustained value creation by means of corporate management in awareness of their responsibilities and with an orientation to long-term results.

Show Declaration of conformity Archived Declarations of Conformity (German)

Declaration pursuant to Section 161 AktG regarding compliance with the recommendations of the German Corporate Governance Code

1&1 Aktiengesellschaft

Declaration of the Management Board and Supervisory Board of 1&1 AG
Regarding the Recommendations of the
“Government Commission on the German Corporate Governance Code”
Pursuant to Section 161 Stock Corporation Act [Aktiengesetz; AktG]

The Management Board and Supervisory Board of 1&1 Aktiengesellschaft declare that 1&1 Aktiengesellschaft has complied with the recommendations of the German Corporate Governance Code (“Code”) as last revised on 28 April 2022, which became effective upon publication in the Federal Gazette on 27 June 2022, on which the last Declaration of Conformity of 5 December 2022 was based, with the there declared exceptions and will continue in future to comply with the recommendations, with the following exeptions:

Clauses D.4
Formation of a nomination committees

The Supervisory Board does not form any other committees in addition to the Audit and Risk Committee, but performs all other tasks as a whole. The Supervisory Board considers this to be appropriate, as efficient plenary discussions and an intensive exchange of opinions are possible even with a six-member Supervisory Board. Accordingly, the Supervisory Board sees no need to establish a Nomination Committee.

Clauses G.1 to G.5
Remuneration of the Management Board — remuneration system

Taking into account the Act Implementing the Second Shareholders' Rights Directive ("ARUG II") and the new German Corporate Governance Code (“DCGK”), the Supervisory Board developed and agreed changes to the compensation system for members of the Executive Board.
With the recommendation to the Annual General Meeting in May 2021, the compensation system became the basis for employment contracts with Executive Board members concluded in the future. The remuneration system developed takes into account the recommendations in G.1 up to and including G.5 of the Code without any restrictions. Existing employment contracts with Executive Board members remain unaffected by this, which is why the deviation from the recommendations in G.1 up to and including G.5 of the Code is explained.


Clause G.10
Remuneration of the Management Board — long-term variable remuneration

According to G.10 of the Code, the variable remuneration components granted to members of the Management Board should be granted primarily as shares of company stock or granted on the basis of company stock. Moreover, any such grants to board members should be subject to a blackout period of four years. Share-based remuneration is awarded in the form of the Stock Appreciation Rights (SARs) programme as a long-term remuneration programme for the Management Board. The term of this programme totals six years. Within this period of six years, a Management Board member can redeem a portion (25 percent) of the vested SARs at certain points in time — at the earliest, however, after two years. This means that a Management Board member can obtain a part of the long-term variable remuneration after only two years. After 5 years, full exercising of all SARs is possible for the first time.
The Supervisory Board is of the opinion that this system of long-term remuneration has proven its value and sees no reason to postpone any further the possibility of obtaining remuneration earned under the programme. The Supervisory Board believes that the linking of the programme to the 1&1 AG share price and the opportunity for Management Board members to redeem their shares to satisfy the claims from the programme secure reasonable participation of Management Board members in the risks and opportunities of the company 1&1 AG. Since the programme has been designed with a term of six years and the awarded SARs are vested proportionately over this term and at the earliest after two years, the Supervisory Board is of the opinion that the programme achieves an optimal commitment effect and incentive control in the interest of 1&1 AG and does not require any changes.

Clause G.11
Remuneration of the Management Board — withholding/clawback of variable remuneration

According to G.11 of the Code, the Supervisory Board should have the possibility to withhold or claw back variable remuneration in justified cases. The current employment contracts of the Management Board members do not contain such provisions. A claw-back clause for the reclaim of variable compensation has been included in the new compensation system and will be taken into account in future employment contracts to be concluded with Executive Board members.

Clause G.13
Remuneration of the Management Board — benefits upon termination of contract

According to G.13 of the Code, payments to a Management Board member in the event of premature termination of Management Board activities should not exceed the value of two years’ remuneration and should not remunerate the member for a period longer than the remaining term of the employment contract. If and when there is a post-contractual non-competition clause, any such severance payment should also be offset against the waiting period compensation. The employment contracts for Management Board members do not currently provide such an offset option. However, there are plans to incorporate this option into the remuneration system and into newly concluded employment contracts of the Management Board members (and any related termination agreements).


Montabaur, 18 December 2023

On behalf of
the Supervisory Board          The Management Board
Kurt Dobitsch                        Ralph Dommermuth      Markus Huhn      Alessandro Nava

Director Dealings


With the effective date of Art. 19 EU Market Abuse Regulation ("MMVO") on 3 July 2016, the members of the Management Board and Supervisory Board of 1&1 AG must report the purchase or sale of 1&1 shares. In addition to purchase and sale transactions in 1&1 shares, other securities transactions relating to the 1&1 share (e.g. purchase or sale of warrants on the 1&1 share) must also be reported. Furthermore, securities transactions of so-called closely related persons, such as spouses, partners who are equal to a spouse, dependent children or relatives who have belonged to the same household for at least one year, as well as legal entities, trusts or partnerships that are directly or indirectly controlled by a member of one of the aforementioned bodies, must be reported.

Current notifications

There are currently no reportable securities transactions.

Sustainability Report


For almost 30 years, we have been active as one of the major German telecommunications providers. Our work goes hand in hand with corporate and social responsibility, a topic that we take seriously.

For this reason we publish our annual Sustainability Report in which we describe, transparently and in detail, our measures to secure sustainable added value. As we strive to meet the increasing demands of our internal and external stakeholders, we remain in constant dialogue with customers, business partners, shareholders, investors and our employees. We would otherwise be unable to optimise our products and services and further specify our action areas relating to sustainability.

Archived reports
Nachhaltigkeitsbericht

Compensation Report


Remuneration system for members of the Executive Board and Supervisory Board


Responsibility in supply chains


1&1 assumes corporate responsibility to respect human rights and environmental standards. This applies to our own business operations as well as to our supply chains.

Responsible supply chains are an important element in making our value creation sustainable beyond our own business area and thus contributing to the environment and society. Close business relationships based on partnership form the basis for successful cooperation and resilient supply chains. This has become even more important with the requirements of the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz - LkSG).

To ensure compliance with social and environmental standards, 1&1 has established appropriate due diligence processes - both within the company and in its relationships with business partners. To realize our corporate responsibility, we rely on cooperation - with employees, business partners and suppliers. Only together, we can effectively counter risks in our supply chains.

Our approach and processes for implementing the German Supply Chain Due Diligence Act are described in our Declaration of Principles on Human Rights.

Our Supplier Code of Conduct formulates the expectations for the implementation of corporate due diligence obligations by our business partners and describes the minimum requirements that must be observed in business transactions. Good and intensive cooperation with business partners is of the utmost importance to 1&1. Together, we want to place sustainable business practices at the centre of our actions and continue to improve.

Verantwortung bei Lieferketten