25. Related party disclosures

Business transactions between the Group and non-consolidated subsidiaries and associates or their subsidiaries as well as joint ventures are carried out at arm’s length and are included in the following items of the Consolidated Financial Statements:

Receivables and liabilities with associates and joint ventures as well as with non-consolidated subsidiaries comprise both direct and indirect relationships.

In addition, there are business transactions with core shareholders that have a significant influence due to consolidation of the voestalpine shares using the equity method. Business transactions are carried out at arm’s length and can be depicted as follows:

The non-inclusion of non-consolidated entities in the Consolidated Financial Statements has no significant impact on the Group’s net assets, financial position, or results of operations.

Management Board

The fixed compensation of the Management Board is determined by the General Committee of the Supervisory Board pursuant to Austrian legal requirements and is reviewed periodically.

The award of a bonus is subject to a target agreement to be concluded with the General Committee of the Supervisory Board that consists of quantitative and qualitative targets. The maximum bonus is limited to 200% of the annual gross salary for members of the Management Board and to 250% of the annual gross salary for the Chairman of the Management Board. If the agreed target values for quantitative targets are achieved exactly, 60% of the maximum bonus applies; if the agreed target values for qualitative targets are achieved, 20% of the maximum bonus applies. The overachievement of the targets is taken into consideration proportionately until the maximum bonus is reached. The quantitative targets are “earnings before interest and taxes” (EBIT) and “return on capital employed” (ROCE). Specific target amounts are determined periodically (in each case for a period of three years) by the General Committee of the Supervisory Board in consultation with the Management Board. They are computed independently of the respective budget and/or the medium-term business plan, i.e. budget compliance does not mean that a bonus is granted. The stipulated qualitative targets for the business year 2017/18 were, first, presentation of a report to the Supervisory Board regarding the core elements of the digital transformation of the voestalpine Group and, second, presentation of the long-term fundamentals regarding sustainability and diversity in the voestalpine Group.

The amount of the contractually approved company pension payable to the members of the Management Board Dr. Eder, Mag. Dipl.-Ing. Ottel, and Dipl.-Ing. Eibensteiner depends on the length of their service. The amount of the annual pension equals 1.2% of the most recent annual gross salary for each year of service. However, the pension benefit cannot exceed 40% of the most recent annual gross salary (excluding variable compensation). A defined contribution arrangement was put in place for the members of the Management Board Dipl.-Ing. Rotter, Dipl.-Ing. Dr. Kainersdorfer, and Dipl.-Ing. Dr. Schwab (pursuant to which the Company pays 15% of their annual gross salary (excluding bonuses) into the pension fund). If an individual is appointed to the Management Board repeatedly, as of the current business year the defined contribution plan may be linked to the option to raise the given pension to a specific level upon retirement at the discretion of the General Committee of the Supervisory Board.

Upon termination of their director’s contracts, Management Board members are granted severance pay that is modeled on the approach set forth in the Austrian Employment Act (Angestelltengesetz – AngG); the maximum allowable under the law may not be surpassed.

D&O insurance has been taken out for the members of the Management Board (as well as for ex- ecutives) and for the members of the Supervisory Board at a cost of EUR 0.2 million (2016/17: EUR 0.1 million) that is borne by the entity.

The compensation paid to the members of the Management Board of voestalpine AG is structured as follows for the business year 2017/18:

In addition to the compensation contained in the above table, the following service costs (personnel expenses) are recognized in the Consolidated Financial Statements for members of the Management Board with defined benefit pension agreements: Dr. Eder EUR 0.00 million (2016/17: EUR 0.00 million), Mag. Dipl.-Ing. Ottel EUR 0.35 million (2016/17: EUR 0.30 million), and Dipl.-Ing. Eibensteiner EUR 0.31 million (2016/17: EUR 0.27 million). Given the potential upgrading described above, a de facto defined benefit pension agreement with past service costs has been recognized as follows in the Consolidated Financial Statements for the Management Board members with defined contribution pension agreements: Dipl.-Ing. Rotter EUR 0.37 million, Dipl.-Ing. Dr. Kainersdorfer EUR 0.88 million, and Dipl.-Ing. Dr. Schwab EUR 0.24 million; in the business year 2017/18, pension fund contributions of EUR 0.12 million in each case (2016/17: EUR 0.12 million in each case) are expensed in the Consolidated Financial Statements for these Management Board members. Pension payments amounting to EUR 1.00 million (2016/17: EUR 0.96 million) were paid by the pension fund for former members of the Management Board with defined benefit pension agreements.

As of the reporting date, the outstanding balance of the variable compensation was EUR 8.22 million (2016/17: EUR 6.64 million). No advances or loans were granted to the members of the Management Board of voestalpine AG.

Directors’ dealings notices of the members of the Management Board are published on the Company’s website (www.voestalpine.com).

Supervisory Board

Under Article 15 of the Articles of Incorporation, the shareholder representatives on the Supervisory Board of voestalpine AG are paid compensation of 0.1% of the profit after tax pursuant to the adopted Consolidated Financial Statements. The total amount is distributed as follows based on an allocation key: 100% for the Chairman, 75% for the Deputy Chairman, and 50% for each of the other members, with a minimum compensation of EUR 27,000 for the Chairman, EUR 20,000 for the Deputy Chairman, and EUR 13,000 for each of the other members of the Supervisory Board pursuant to the amendment of Article 15 of the Articles of Incorporation resolved by the Annual General Meeting 2016. The compensation of the Supervisory Board is limited to four times the stated amounts. The members of the Supervisory Board nominated by the Works Council do not receive any compensation. All members of the Supervisory Board are paid an attendance fee of EUR 500 per meeting. No separate compensation is paid for meetings of the committees of the Supervisory Board, but an attendance fee of EUR 500 per meeting is paid nonetheless.

According to this arrangement, the shareholder representatives on the Supervisory Board were paid the following compensation for the business year 2017/18: Dr. Joachim Lemppenau (Chairman): EUR 108,000 (2016/17: EUR 108,000); Dr. Heinrich Schaller (Deputy Chairman): EUR 80,000 (2016/17: EUR 80,000); all other shareholder representatives: EUR 52,000 (2016/17: EUR 52,000).

The Articles of Incorporation have contained finalized rules as to the annual compensation of the members of the Supervisory Board and the method of calculating it since the 2006 Annual General Meeting. As a result, the Annual General Meeting need not adopt a separate resolution every year.

The compensation of the Supervisory Board (including attendance fees) for the business year 2017/18 totaled EUR 0.54 million (2016/17: EUR 0.55 million). The compensation of the Supervisory Board for the business year 2017/18 is paid out at the latest 14 days after the Annual General Meeting on July 4, 2018. No advances or loans were granted to members of the Supervisory Board of voestalpine AG.

Directors’ dealings notices of the members of the Supervisory Board are published on the Company’s website (www.voestalpine.com).

As legal counsel to voestalpine AG and its subsidiaries, the law firm of Binder Grösswang Rechtsanwälte GmbH, of which the Supervisory Board member Dr. Michael Kutschera is a partner, provided legal services in the business year 2017/18 particularly in connection with matters related to antitrust and real estate law. Fees for these matters were invoiced at the general hourly rates of the law firm of Binder Grösswang Rechtsanwälte GmbH applicable at the time. For the business year 2017/18, total net fees of EUR 15,808.00 (2016/17: EUR 32,098.00) were incurred for services provided by Binder Grösswang Rechtsanwälte GmbH.