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 2022. 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 2022.

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 16 December 2019, on which the last Declaration of Conformity of 7 December 2021 was based, with the there declared exceptions, and will continue in future to comply with the recommendations of the Code as most recently revised on 28 April 2022, which became effective upon publication in the Federal Gazette on 27 June2022, with the following exceptions:

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).


Maintal, 05 December 2022

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

Director Dealings


With the coming into force of the Art. 15 a of the Securities Trading Act (Finanzmarktförderungsgesetz) on July 1, 2002, the members of the Executive Board and Supervisory Board of 1&1 AG are obligated to disclose the purchase or sale of 1&1 shares under Art. 15 a of the Securities Trading Act (Wertpapierhandelsgesetz). In addition to the direct purchase or sale of 1&1 shares, other securities transactions relating to 1&1 shares (e.g. purchase or sale of option certificates for stock) must also be disclosed. Securities dealings by spouses, registered life partners or close relatives are also subject to disclosure.

Current notifications

There are currently no reportable securities transactions.

Archived reports

Sustainability Report


For more than 25 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.

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Dear reader,

The more the process of digitalisation gathers speed, the greater the responsibility is to ensure that this process happens securely and is accessible to all. As one of Germany’s largest telecommunications providers with more than 15.4 million customer contracts and roughly 3,200 employees, we have a particular obligation as a company and to society – something that we take extremely seriously.

Digital inclusion is a top priority for us, especially in view of our new role as Germany’s fourth mobile network operator. As a new entrant to this business, we will be constructing a high-performance mobile network in the coming years that will make a difference. We are building the first fully virtualised mobile network in Europe to be based on the new OpenRAN technology. This innovative approach not only helps boost competition on the telecommunications market, but also allows full advantage to be taken of the potential offered by 5G. Thanks to our cooperation with established tower operators, we will largely be using existing antenna locations. This will help protect the environment and reduce the resources required, while also increasing our rollout speed.

Acting sustainably as a company is part of what we do every day. Our goal is to improve all the time and to meet our internal and external stakeholders’ growing expectations better and better every year.

2021 sees the publication of our fifth sustainability report, which provides a transparent, detailed overview of the measures we are taking to create sustainable value. Among other things, we focused in depth on the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz – LkSG), which was resolved by the federal government in 2021, and its implications, plus those parts of the EU Taxonomy that enter into force in 2022. The first stage of the Taxonomy provides a classification system for environmental issues such as climate protection or adapting to climate change in business contexts, and will have a decisive effect on our concrete action areas in the coming years. In addition, we incorporated insights from ESG (environmental, social and governance) ratings in our action areas in 2021.

We continued to expand our mobile working offering in view of the ongoing COVID-19 pandemic and helped our staff to stay safe and healthy during this challenging period by providing a wide range of digital healthcare courses. With respect to our products, we stepped up active marketing of refurbished devices in 2021 and further expanded our portfolio of sustainably produced smartphones.

We are proud to have made tangible progress with enhancing sustainability for the fifth year in a row. We intend to continue pursuing this journey and to live up both to our vision of doing business in an environmentally and socially responsible manner and to our goal of achieving long-term success as Germany’s fourth mobile network operator.

Best regards

Ralph Dommermuth, Markus Huhn and Alessandro Nava

Archived reports
Nachhaltigkeitsbericht

Compensation Report


Remuneration system for members of the Executive Board and Supervisory Board