Business ReportRemuneration ReportRemuneration Governance

Remuneration Governance

Remuneration and Nomination Committee

The Remuneration and Nomination Committee comprises at least two non- executive, independent members of the Board of Directors, who are elected individually by the Annual General Meeting for a one-year term of office prior to the next Annual General Meeting.

At the Annual General Meeting 2023, Sandra Emme (Chair) and Urban Linsi were re-elected as members of the Remuneration and Nomination Committee. Additionally, Ines Pöschel and Stefan Ranstrand were elected as new members of the Remuneration and Nomination Committee.

The Remuneration and Nomination Committee is assigned the following duties in support of the Board of Directors:

Determination of the remuneration policy of the Company at the highest corporate level in accordance with the Articles of Incorporation.
Preparation of motions to the Annual General Meeting related to the maximum amounts of remuneration of the governing bodies.
Evaluation of the yearly target achievement of the Executive Committee members and determination of their remuneration within the limits approved by the Annual General Meeting.
Submission of proposal on the amount of remuneration for the members of the Board of Directors within the limits approved by the Annual General Meeting.
Review and submission of the proposed Remuneration Report to the Board of Directors.
Performance of success planning and selection of suitable candidates for the Board of Directors and the Executive Committee.

In 2023, the Committee held three meetings of approximately two and a half hours each. The participation rate for meetings in 2023 was 100%.

	Sandra Emme, Chair	Prof. Adrian Altenburger, Member 1)	Urban Linsi, Member	Ines Pöschel, Member 2)	Stefan Ranstrand, Member 2)

February 14, 2023	X	X	X
September 4, 2023	X		X	X	X
November 21, 2023	X		X	X	X

1) Prof. Adrian Altenburger was member of the Remuneration and Nomination Committee until the 2023 Annual General Meeting.

2) Ines Pöschel and Stefan Ranstrand were elected as new members of the Remuneration and Nomination Committee at the 2023 Annual General Meeting.

The February and November meetings of the Remuneration and Nomination Committee each address standard agenda items. In February, those are:

Evaluation of the achievement of the qualitative targets of the previous fiscal year for the members of the Executive Committee.
Determination of the bonus amounts for the members of the Executive Committee to be paid out in March.

In November, they are:

Submission of the proposed amount of remuneration for the members of the Board of Directors for the following fiscal year.
Submission of the proposed amount of remuneration for the members of the Executive Committee for the following fiscal year.
Evaluation of the performance of the members of the Executive Committee.
Determination of the bonus amounts for the members of the Executive Committee to be paid out in December.
Submission of the proposed annual Remuneration Report to the Board of Directors.

The CEO and the Global Head of Human Resources are invited to attend the Committee meetings in an advisory capacity. The CEO and the Global Head of Human Resources do not attend the meeting when their own remuneration or performance is discussed.

The Chairwoman of the Remuneration and Nomination Committee informs the Board of Directors after each meeting of the activities of the Committee. The minutes of the meetings are available to all members of the Board of Directors.

Levels of Authority

The remuneration proposals and decisions are made on the basis of the following levels of authority:

Subject	CEO	Remuneration and Nomination Committee	Board of Directors	Annual General Meeting

Selection criteria and succession planning for the CEO and the members of the Board of Directors		Proposes	Approves
Selection criteria and succession planning for other members of the Executive Committee	Proposes	Reviews	Approves
Remuneration policies and guidelines, in line with the provisions of the Articles of Incorporation		Proposes	Approves
Maximum remuneration amounts for the Board of Directors / the Executive Committee		Proposes	Reviews	Approves (binding vote)
Individual remuneration of the members of the Board of Directors		Proposes	Approves
Individual remuneration of the CEO		Proposes	Approves
Individual remuneration of the other members of the Executive Committee	Proposes	Reviews	Approves
Performance objectives and assessment of the CEO		Proposes	Approves
Performance objectives and assessment of the other members of the Executive Committee	Proposes	Reviews	Approves
Remuneration Report		Proposes	Approves	Approves (consultative vote)

The Annual General Meeting votes with regard to the remuneration of the governing bodies:

Prospective approval of the maximum total remuneration for the current financial year for the members of the Board of Directors and the Executive Committee. If the Annual General Meeting withholds its approval, the Board of Directors may submit new proposals for approval at the same Annual General Meeting. If the Board of Directors makes no new proposals or the Annual General Meeting declines the new proposals, the Board of Directors must convene a new General Meeting within a period of three months.
Retrospective, consultative vote on the Remuneration Report for the financial year preceding the Annual General Meeting.

At the Annual General Meeting 2024, the Board of Directors will propose changes to the Articles of Incorporation, which include the following changes regarding the votes in relation to the remuneration of the governing bodies:

Prospective approval of the maximum total remuneration for the year following the Annual General Meeting for the members of the Board of Directors.
Prospective approval of the maximum remuneration for the fiscal year following the Annual General Meeting for the Executive Committee.