121To Our Shareholders Supervisory Board Year in Review Combined Group Management Report Additional Information Market Units Corporate Governance Consolidated Financial Statements Tables and Explanations Compensation of the Members of the Board of Management Dr. Hans Michael Gaul retired from the Board of Management on March 31, 2007. The remaining other compensation of the members of the Board of Management consists primarily of benefits in kind from the personal use of company cars and, in the case of one member, temporary reimbursement for rental payments on a secondary residence. The performance rights granted in 2007 as the second tranche of the E.ON Share Performance Plan were quoted at their fair value of 83.24 per right on the date of their issuance and were included in the total compensation of the members of the Board of Management. This fair value is determined by means of a recognized option pricing model. The model, called a Monte Carlo simulation, simulates a large number of different scenarios for E.ON AG stock and its benchmark index, the Dow Jones STOXX Utilities Index (Return EUR). According to the terms and conditions of the E.ON Share Performance Plan, the intrinsic value of the performance rights is deter- mined for each scenario based on E.ON stock's outperformance or underperformance of its benchmark index and the stock's corresponding payout value. The fair value is equal to the discounted average of these intrinsic values. For purposes of internal communications between the Board of Management and the Supervisory Board, the target value is used instead of the fair value. The target value is equal to the cash payout amount of each performance right, if at the end of the maturity period, E.ON stock maintains its price and the performance equals the performance of the bench- mark index. The target value for the second tranche is 96.52 per right and equals the average E.ON stock price during the 60 trading days prior to the issuance of the rights on January 1, 2007. The Executive Committee of the Supervisory Board used the target value to determine the number of rights to be issued. These correspond to a target value of 1.35 million for the Chairman of the Board of Management, 0.8 million for Board of Management members, and 80 percent of 0.8 million for the members who joined the Board of Management in 2006. The German Commercial Code (Section 314, Paragraph 1, Item 6a, Sentence 9) requires supplemental disclosure of the Company's expenses for the performance rights granted in 2007 and all tranches existing in the 2007 financial year that were granted in prior years. The following expenses in accor- dance with IFRS 2 were recorded for the 2007 financial year: Dr. Bernotat (5.6 million), Dr. Bergmann (2.6 million), Mr. Dänzer-Vanotti (0.8 million), Mr. Feldmann (0.4 million), Dr. Schenck (0.4 million), and Dr. Teyssen (1.6 million). Income of about 0.1 million was recorded relating to Dr. Gaul for January 1 ­ March 31, 2007, due to a decline in the value of SAR and performance rights during this period. Additional detailed information about E.ON AG's stock-based compensation program can be found in Note 11 to the Con- solidated Financial Statements. No loans were outstanding or granted to members of the Board of Management in the 2007 financial year. Pages 14, 15, and 213 contain additional information about the members of the Board of Management. Payments Made to Former Members of the Board of Management Total payments made to former Board of Management mem- bers and to their beneficiaries amounted to 6.6 million in 2007 (2006: 11.7 million). Provisions of 97.4 million (2006: 99.9 million) have been provided for pension obligations to former Board of Management members and their beneficiaries. The total compensation of the members of the Board of Management in the 2007 financial year amounted to 20.4 mil- lion (2006: 21.7 million). Individual members of the Board of Management were paid the following total compensation: Dr. Wulf H. Bernotat Dr. Burckhard Bergmann Christoph Dänzer-Vanotti Lutz Feldmann Dr. Hans Michael Gaul (until March 31, 2007) Dr. Marcus Schenck Dr. Johannes Teyssen Total Compensation of the Board of Management 2007 Number of 2nd tranche performance rights granted 13,987 8,288 6,631 6,631 2,072 6,631 8,288 52,528 Fair value of 2nd tranche of perfor- mance rights 1,164,278 689,893 551,964 551,964 172,473 551,964 689,893 4,372,429 Total 5,331,519 3,228,832 2,580,067 2,601,882 806,579 2,595,307 3,286,208 20,430,394 Other compensation 47,241 28,939 18,103 39,918 6,606 33,343 86,315 260,465 Annual bonus 2,880,000 1,760,000 1,410,000 1,410,000 440,000 1,410,000 1,760,000 11,070,000 Fixed annual compensation 1,240,000 750,000 600,000 600,000 187,500 600,000 750,000 4,727,500