Compensation Report

The Compensation Report provides an overview of the compensation programs and the method for determining compensation at Conzzeta. It documents the compensation awarded to the Board of Directors and the Executive Committee in financial year 2018.

The report conforms to the relevant provisions of the Ordinance against excessive pay in stock listed companies (“VegüV”), the standards relating to information on corporate governance issued by SIX Swiss Exchange, and the principles of the economiesuisse “Swiss Code of Best Practice for Corporate Governance”.

1 Compensation Governance

1.1 Shareholder involvement

At the last Annual General Meeting (AGM) of shareholders on Tuesday, April 24, 2018, the members of the Remuneration Committee, which was established in 2014, were re-elected by the shareholders. They also adopted the 2017 compensation report presented for an advisory vote and approved the maximum total compensation for the Board of Directors for the 2018/2019 term of office in the amount of CHF 1.5 million and for the Executive Committee for the 2019 financial year in the amount of CHF 8.2 million.

At the upcoming AGM on Tuesday, April 16, 2019, shareholders will be able to adopt a binding vote on the prospective total compensation to be awarded to the Board of Directors and to the Executive Committee respectively. They will also be able to voice their opinion retrospectively on this compensation report in a consultative vote.

1.2 Duties of the Board of Directors

At the request of the Remuneration Committee, the Board of Directors approves the personnel and compensation policy for the Group, and the general terms of employment of the members of the Executive Committee.

At the AGM, the Board of Directors puts forward its own total compensation amount and that of the Executive Committee for approval. It also approves the compensation to be awarded individually to the members of the Board of Directors and Executive Committee, based on the proposal of the Remuneration Committee and with reference to the total compensation amounts agreed at the AGM.

1.3 Duties of the Remuneration Committee

As determined in the Articles of Association and in the Organizational Rules of Conzzeta AG, the Remuneration Committee, which also performs additional tasks in its role as the Human Resources Committee (HR Committee), is responsible for preparing the proposals for the attention of the Board of Directors in relation to nomination and compensation matters:

Shareholder voting on compensation at the 2019 AGM

Nomination:

• Development of the selection criteria for positions on the Board of Directors and on the Executive Committee
• Succession planning for positions on the Board of Directors and on the Executive Committee
• Assessment and encouragement of the executives and talents
• Supervision of the human resources policy and personnel development plans
• Responsibility for the guideline on permissible external mandates for the members of the Executive Committee and preparation of the respective requests to the Board of Directors

Compensation:

• Motion to the Board of Directors on the compensation policy for members of the Board of Directors and of the Executive Committee
• Review of compensation system and related payments, and of their compliance with the provisions of the Articles of Association
• Preparation of motions to the AGM on the maximum total compensation for the Board of Directors and Executive Committee
• Proposal on the compensation of the individual members of the Board of Directors and of the Executive Committee
• Review and assessment of pension plans
• Preparation of the Compensation Report

The final decision on the compensation of the Board of Directors and the Executive Committee within the maximum compensation agreed at the AGM remains with the Board of Directors.

The Remuneration Committee consists of three members of the Board of Directors who are elected individually and annually by the Annual General Meeting of shareholders for a period of one year. At the 2018 Annual General Meeting of shareholders, Philip Mosimann (Chairman), Werner Dubach and Robert F. Spoerry were re-elected as members of the Remuneration Committee.

The Remuneration Committee meets as often as business requires, but at least three times a year. At the start of the year, the Remuneration Committee proposes to the Board of Directors the variable compensation of the Group CEO and the other members of the Executive Committee for the previous financial year based on the assessment of business and individual performance. The Committee also proposes the compensation of the members of the Board of Directors for the term of office completed and presents the Compensation Report to the Board of Directors. The meeting at year-end is dedicated on the one hand to nomination matters such as the succession planning for positions on the Board of Directors and on the Executive Committee, the definition of appropriate selection criteria for such positions and the review of personal development plans. At the same meeting, the (target) compensation amounts for the Group CEO and the other Executive Committee members for the following year are established.

Responsibilities

As a general rule, the Chairman of the Board of Directors, the Group CEO and the Head of Corporate Human Resources are invited to join the meetings of the Remuneration Committee in an advisory capacity. The Remuneration Committee Chairman may invite other members of the Executive Committee as appropriate.

The Remuneration Committee Chairman reports to the Board of Directors on the activities of the Committee after each meeting. The minutes of the Remuneration Committee meetings are made available to all members of the Board of Directors.