Siemens Healthineers : Compensation Report of Siemens Healthineers AG for Fiscal Year 2022

Compensation report 2022

siemens-healthineers.com

Compensation Report of Siemens Healthineers AG­ for Fiscal Year 2022

This Compensation Report describes the compensation awarded and due to each current and former member of the Managing Board and Supervisory Board of Siemens Healthineers AG­ (hereinafter: Siemens Healthineers­ or the Company) in fiscal year 2022 in the period from October 1, 2021, through September 30, 2022. The report gives a detailed and personalized account of the structure and amount of the different components of Managing Board and Supervisory Board compensation. The Compensation Report has been prepared jointly by the Managing Board and Supervisory Board; it complies with the requirements of the German Stock Corporation Act (Aktiengesetz, AktG) (section 162 of the AktG) and meets the recommendations of the German Corporate Governance Code (GCGC). Clear, comprehensible, and transparent reporting is of great importance to both the Managing Board and the Supervisory Board. That is why Siemens Healthineers AG,­ for the second time, is presenting a Compensation Report that complies with new requirements and has undergone a material audit by the independent auditors above and beyond the legal ­requirements of section 162 (3) of the AktG. This Compensation Report will be submitted to the Annual Shareholders' Meeting for approval on February 15, 2023.

A detailed description of the compensation systems for the members of the Managing Board and Supervisory Board of Siemens ­Healthineers AG can be found on the website  www.siemens-healthineers.com/investor-relations/corporate-governance.

This document is an English language translation of the German document. In case of discrepancies, the German language document is the sole authoritative and universally valid version.

Munich, November 25, 2022

Prof. Dr. Ralf P. Thomas	Dr. Bernhard Montag	Dr. Jochen Schmitz
Chairman of the Supervisory Board	Chief Executive Officer	Chief Finance Officer

Contents

Compensation of the members of the Managing Board of Siemens Healthineers AG	04
Summary of Managing Board compensation in fiscal year 2022	06
Determination of the compensation for fiscal year 2022	09
Target compensation and compensation structure	09
Appropriateness of Managing Board compensation	10
Maximum compensation	11
Variable compensation in fiscal year 2022	11
Short-term variable compensation (bonus)	13
Long-term variable compensation (Siemens Healthineers Stock Awards)	16
Malus and clawback provisions	22
Share Ownership Guidelines	23
Pension benefit commitments	24
Compensation awarded and due in fiscal years 2022 and 2021	25
Compensation of former Managing Board members in fiscal years 2022 and 2021	26

Compensation of the members of the Supervisory Board of Siemens Healthineers AG	27
Compensation system of the Supervisory Board	27
Supervisory Board compensation in fiscal years 2022 and 2021	28
Multiyear overview: Information on the development of Managing Board
and Supervisory Board compensation in relation to the compensation of
the overall workforce and the Company's earnings performance	29
Other	31
Independent auditor's report	32

Siemens Healthineers Compensation report 2022

Compensation of the members of the Managing Board of Siemens Healthineers AG­

Compensation of the members of the Managing Board of ­Siemens ­Healthineers AG

The compensation described below for the members of the Managing Board of Siemens ­Healthineers AG­ (hereinafter: Managing Board members) for fiscal year 2022 is based on the compensation system applicable since October 1, 2020, which was developed pursuant to section 87a (1) of the AktG and approved with a majority of 98.91 % by the Annual Shareholders' Meeting on February 12, 2021. Pursuant to section 120 a (1) sentence 1 of the AktG, the Annual Shareholders' Meeting of a listed company resolves to approve the compensation system for the Managing Board members presented by the Supervisory Board each time there is a ­material amendment to the compensation system, but at least every four years, i. e., at the latest at the 2025 Annual Shareholders'­ Meeting. The compensation system applied to all active Managing Board members in fiscal year 2022. A full description of the ­compensation system for Managing Board members is accessible to the public at  www.siemens-healthineers.com/investor-relations/corporate-governance/managing-board-compensation.

Major developments in fiscal year 2022

Despite additional challenges in the overall economic environment, the Managing Board and our employees helped ensure that we largely achieved the targets set for fiscal 2022. Disruptions in supply chains and pandemic-related lockdowns in China meant that there were some shifts in revenue to subsequent quarters. On a comparable basis, the Company increased its revenue by 5.9 % compared to the very good prior year. That figure was impacted positively by the rise in revenue from the rapid COVID-19 antigen tests to almost € 1,550 million, following around € 1,080 million in the prior year. Profitability was adversely affected year-over-year, mainly by cost increases, particularly in procurement and logistics, as well as by the lockdowns in China and negative currency effects. Adjusted basic earnings per share (adjusted basic EPS) increased by 13 % year-over-year to € 2.29 (2021: € 2.03). That was mainly attributable to the first-time inclusion of Varian's­ earnings contributions for a full fiscal year and the higher contributions from the sale of rapid COVID-19 antigen tests, which all in all more than offset the higher procurement and logistics costs and the negative effects from the lockdowns in China.

The performance of Siemens ­ Healthineers'­share reflects - like the whole stock market - the challenging economic environment prevailing at present. The share's closing price of € 44.28 at the end of the fiscal year was around 21 % below the prior-year level (2021: € 56.18).

Against the backdrop of macroeconomic challenges, the Company succeeded in pressing ahead with the merger with ­Varian Medical

Systems, Inc. (hereinafter: Varian)­ and significantly increased Varian's­ revenue compared to the previous year. With the transformative merger between Siemens Healthineers­ and ­Varian, the Company completed the second phase in the Siemens Healthineers­ Strategy 2025, the so-called "Upgrading" phase, sooner than originally planned and started into the third phase ("New Ambition") at the start of fiscal year 2022. As part of our joint future, the company culture was further developed, and the newly defined company purpose "We pioneer breakthroughs in healthcare. For everyone. Everywhere!" and the newly defined company values "Listen first", "Win together", "Learn passionately", "Step boldly", and "Own it" were created.

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Siemens Healthineers Compensation report 2022

Compensation of the members of the Managing Board of Siemens Healthineers AG­

We also concluded long-term strategic value partnerships, for example with the University of Miami Health System, Oulu University Hospital, and Penta Hospital International, with the aim of improving healthcare in Miami, Finland, and Slovakia. These new partnerships go beyond medical technology management and the provision of digital solutions to include innovation development, training programs, and consulting services for improving workflows.

Major developments in fiscal year 2022

New Ambition		Varian Integration		Again strong rapid		Reduced revenue		Macroeconomic
				COVID-19 antigen test		due to lockdowns and		headwinds
				business		supply bottlenecks

Strategy and Managing Board compensation

As a global leader in medical technology, Siemens Healthineers­ wants to contribute to mastering global healthcare challenges by providing innovative products and services. To this end, the Managing Board has defined the Siemens Healthineers­ Strategy 2025 to secure competitiveness and the Company's market leadership beyond 2025. In fiscal 2022, the Company initiated New Ambition, the third phase of the Siemens Healthineers­ Strategy 2025. Following the successful merger with ­Varian, New Ambition is a growth strategy that builds on the Upgrading phase and focuses on five growth vectors for fiscal years 2022 to 2025: "Access to Care", "China Healthcare", "Networked Care & Digitally Enabled Services", "Cardiovascular & Neurovascular Care", and "Comprehensive Cancer Care". The basis for focusing on these growth areas are the strengths of Siemens Healthineers:­ "patient twinning", "precision therapy" as well as "digitalization, data, and artificial intelligence". Backed by this expertise, Siemens Healthineers­ wants to help to further improve healthcare, combat the most dangerous diseases, support efficient workflows and improve access to healthcare globally. At the same time, the Company aims to be successful in its core markets and tap into new growth markets. The goal of the New Ambition phase is to generate an acceleration in comparable sales growth of 6 % to 8 % p. a. for fiscal years 2022 to 2025 by winning further market share and tapping new markets. The increase in adjusted basic earnings in the same period is to be between 12 % to 15 % p. a. based on comprehensive growth in margins.

The compensation system for the Managing Board shall incentivize the implementation of the Company strategy as well as the value-creating,long-term development of the Company while at the same time avoiding disproportionate risks. To this end, it shall provide the right incentives for increasing earnings - measured in terms of adjusted basic EPS (without major currency and portfolio effects) - and comparable revenue growth as well as other relevant strategic topics aimed at the Company's sustainable development.

Compensation in fiscal year 2022

Since the Managing Board compensation is closely linked to the Company's success, the performance achieved in this fiscal year is directly reflected in the compensation of the Managing Board members. In accordance with the strong pay-for-performance prin­ ciple anchored in the compensation system, extraordinary performance should be adequately rewarded and falling short of targets should lead to a noticeable reduction in compensation. The geopolitical and macroeconomic headwinds, as well as the effects of the COVID-19 lockdowns, had a negative impact on business developments in all segments, with the exception of the rapid antigen test business in Diagnostics, with the result that the original targets of the short-term variable compensation could not be fully met. The contributions from the rapid COVID-19 antigen tests, which were significantly higher than originally expected, had a limited impact on target achievement for fiscal 2022 and therefore made only a limited positive contribution to the key targets of comparable revenue growth and adjusted basic EPS (without major currency and portfolio effects).

Moreover, efforts undertaken in terms of environmental, social, and governance aspects were still included in a number of sustainability­

targets for both short-term and long-term variable compensation. Due to the additional focus on sustainability, Managing Board ­compensation is even more closely aligned with the interests of shareholders and stakeholders.

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