Siegfried : Annual Report 2022 Remuneration Report

Remuneration Report

Introduction

The Remuneration Report describes Siegfried Group's (Siegfried) remuneration principles and defines the competencies and responsibilities associated with setting remuneration for members of its Board of Directors and Executive Committee. The report also contains information about remuneration plans and remuneration paid to the members of the Board of Directors and the Executive Committee in the 2022 financial year.

This Remuneration Report was drafted in accordance with Siegfried Holding AG's articles of incorporation and with SIX Swiss Exchange's Directive on Corporate Governance, and contains all the information required as per former article 663bbis and article 663c paragraph 3 of the Swiss Code of Obligations (CO), as well as articles 13 to 17 of the former "Ordinance Against Excessive Compensation at Public Companies" (Verordnung gegen übermässige Vergütungen bei börsenkotierten Aktienge- sellschaften, VegüV), which continue to be applicable to the 2022 reporting period.

The Remuneration Report is structured as follows:

• Introduction by Chair of Remuneration Committee
• Competencies and tasks of Remuneration Committee
• Procedures for setting and approving the remuneration
• Principles of remuneration policy and remuneration elements
• Remuneration of Board of Directors
• Remuneration of Executive Committee
• Shareholdings of Board of Directors and Executive Committee at end of reporting year
• Contractual agreements, loans, credits, and additional contributions

Remuneration Report

Introduction

In this report, details pursuant to articles 14 to 17 VegüV, as applicable for the 2022 reporting period, are provided in the following sections:

Remuneration Report

Introduction

Introduction by Chair of

Remuneration Committee

Dear Shareholders

I am pleased to present our Remuneration Report for the 2022 financial year.

This report describes the remuneration policies, principles and elements applying to the senior management of the Siegfried Group and contains details about the remuneration paid to the members of the Board of Directors and the Executive Committee. Furthermore, the report provides an overview of the key activities and decisions of the Remuneration Committee during the 2022 reporting year. All the information disclosed in the report relates to the financial year ended December 31, 2022.

2022 was again a remarkable year with a lot of external challenges. As announced in last year's Remuneration Report, the Remuneration Committee completed the review of Siegfried's equity-based compensation plans and re-designed the performance management process and Short-Term Incentive (STI) framework.

After the implementation of the new Long Term Incentive Plan (LTIP) for senior management in 2022 (for the details see page 13), it was necessary to also review the equity-based remuneration elements for middle management and employees. The purpose of the review was to propose changes to maintain market attractiveness, but also to ensure that key elements such as retention are consistently embedded in all equity-based remuneration elements. The Remuneration Committee, together with the Executive Committee, has developed a new Share Matching Plan (SMP) for middle management and revised the current Employee Share Purchase Plan. Starting 2023, members of middle management will be able to annually invest up to 10% of their annual base salary in Siegfried shares and will after three years, subject to still being employed, receive for each share purchased one share for free. All employees not participating in the LTIP or SMP will have the possibility to participate in the Employee Share Purchase Plan (ESPP) and invest up to 10% of their annual base salary into Siegfried Shares. After a two-year holding period and subject to still being employed with Siegfried, they will receive for two (2) shares bought one (1) share for free. The new Employee Share Purchase Plan (ESPP) will be implemented in 2024.

The review of the performance management process and STI framework were the other focus areas in 2022. The features of the new performance management process are an increased focus on continuous individual feedback, employee development and more flexible ongoing target setting. The basic principles of the STI framework with corporate, functional and individual targets remain unchanged however, the KPIs for the corporate and functional targets have been revised to better align with the company strategy and sustainability targets. The new process will be rolled-out in the course of 2023.

As every year, the remuneration committee followed up on important people and organizational initiatives such as talent management, culture and leadership development and employee engagement. Good progress has been made in all areas. The talent management process has been fully implemented for all Siegfried sites and revealed a healthy overall talent structure. In some areas, initiatives will be launched to further strengthen the internal and external talent pipelines. The specific development of an effective talent pipeline in all fields and at all sites will continue to be a priority for us, as this is the foundation for the company's future growth. Furthermore, a new tool and process have been implemented to conduct quarterly employee engagement surveys. I am looking forward to report first results and trends in next year's annual report. The search and selection of a new member of the