Wacker Chemie : Compensation Report

Compensation Report of Wacker Chemie AG for 2023

Compensation Report of Wacker Chemie AG for 2023

The Compensation Report provides detailed, personalized information about the compensation granted and owed to active and former members of the Executive Board and the Supervisory Board of Wacker Chemie AG in 2023 and the compensation and benefits promised them for the fiscal year. The Compensation Report follows the recommendations of the German Corporate Governance Code in the amended version that entered into force on April 28, 2022, and complies with the requirements of Section 162 of the German Stock Corporation Act ("AktG"), as amended by the German Act Implementing the EU Shareholder Rights Directive II ("ARUG II") of December 12, 2019. The Compensation Report for 2023 has been formally reviewed by the auditors in accordance with Section 162 (3) sentence 2 of the German Stock Corporation Act. It has also undergone a voluntary material review by the auditors. The report on the audit of the compensation report is included herein. The Compensation Report will be submitted to the Annual Shareholders' Meeting on May 8, 2024, for approval.

Approval of the 2022 Compensation Report by the 2023 Annual Shareholders' Meeting in Accordance with Section 120a (4) of the German Stock Corporation Act

The Compensation Report of Wacker Chemie AG for 2022 was prepared in accordance with Section 162 of the German Stock Corporation Act and was formally reviewed by the auditors in accordance with Section 162 (3) sentence 2 of the German Stock Corporation Act. The 2022 Compensation Report was approved by the Annual Shareholders' Meeting held on May 17, 2023, with 85.98 percent of the vote. Given this approval rate for the 2022 Compensation Report, there were no grounds for initiating a fundamental review of the manner of reporting. Some shareholder representatives and investors did, however, note that the report could be made clearer. That is why we have added new tables and supplementary clarifications to the 2023 Compensation Report to improve transparency and presentation.

Brief Overview of General Business Development in the 2023 Reporting Year

In 2023, the WACKER Group generated sales of €6.40 billion, well below the prior-year level (2022: €8.21 billion). The decline was prompted especially by lower selling prices across all business divisions. Group EBITDA declined

60 percent year over year, coming in at €823.6 million (2022: €2.08 billion). The EBITDA margin of 12.9 percent was

lower than in the previous year (2022: 25.4 percent). In addition to the marked drop in sales, persistently high costs for raw materials and energy, coupled with low plant-utilization rates as a result of the decline in sales, had a negative impact on EBITDA. At €1.08 billion, gross profit from sales was 50 percent lower year over year (2022: €2.16 billion). The cost of goods sold came in at €5.32 billion (2022: €6.05 billion). The gross margin was 16.9 percent (2022:

26.3 percent). Although WACKER was able to leverage efficiency gains to reduce the cost of goods sold, persistently high costs for raw materials and energy, coupled with low plant-utilization rates as a result of the decline in sales, reduced the gross margin considerably overall. The Group's cost-of-sales ratio rose from 74 percent to 83 percent year over year. Group earnings before interest and taxes (EBIT) totaled €404.9 million in the reporting period (2022: €1.68 billion), resulting in an EBIT margin of 6.3 percent (2022: 20.5 percent). In 2023, depreciation and amortization totaled €418.7 million (2022: €402.1 million). WACKER's financial result rose significantly year over year, coming in at €-17.9 million (2022: €-62.6 million). In 2023, WACKER reported tax expenses of €59.7 million (2022: €334.6 million). The Group's effective tax rate was 15.4 percent (2022: 20,7 percent). As a result of the effects mentioned, Group net income was €327.3 million, compared with €1,281.6 million in the previous year. The return on capital employed (ROCE) was 6.9 percent in the reporting year (2022: 34.7 percent). The drop was due to much lower EBIT and the increase in capital employed. Capital expenditures increased significantly in 2023 to €709.6 million (2022: €546.8 million). More than half of the capital expenditures were focused in Germany. The acquisition of ADL BioPharma S.L.U, León, Spain, involved capital expenditures (less acquired cash) of €110.4 million. Net cash flow for 2023 totaled €165.6 million (2022: €438.8 million). Net financial debt amounted to €83.7 million as of December 31, 2023 (Dec. 31, 2022: net financial assets of €409.2 million).

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Compensation Report of Wacker Chemie AG for 2023

Changes in the Composition of the Executive Board and the Supervisory Board in the 2023 Reporting Year

The composition of Wacker Chemie AG's Executive Board changed as follows in 2023: Auguste Willems left the company at his own request on April 30, 2023. The Supervisory Board appointed Dr. Christian Kirsten as his successor effective May 1, 2023. At its meeting on June 21, 2023, Wacker Chemie AG's Supervisory Board confirmed Angela Wörl's membership on the Executive Board and renewed her contract for a further five years (until April 30, 2029).

Dr. Christian Hartel had already been reappointed as member of the Executive Board, president and CEO in December 2022. His new five-year term of office started on November 1, 2023.

As of January 1, 2023, Andreas Schnagl and Reinhard Spateneder joined the Supervisory Board as employee representatives to replace Peter Áldozó and Eduard-Harald Klein, who had left the Supervisory Board on December 31, 2022. At the Annual Shareholders' Meeting of 2023, the mandates of all Supervisory Board members ended as scheduled. The election of shareholder representatives to Wacker Chemie AG's Supervisory Board at the Annual Shareholders' Meeting of May 17, 2023, resulted in the following change: Prof. Dr. Patrick Cramer was elected by the Annual Shareholders' Meeting to succeed Franz-Josef Kortüm, who had not stood for re-election. All the other shareholder representatives were re-elected to the Supervisory Board. The employee representatives on the Supervisory Board had been elected by Wacker Chemie AG's employees and executives before the Annual Shareholders' Meeting. The following changes occurred: Dr. Benedikt Postberg and Stefan Entholzner replaced

Dr. Birgit Schwab and Andreas Schnagl as employee representatives on the Supervisory Board. The other employee representatives were re-elected, including both IG BCE (labor union) members. The Supervisory Board confirmed

Dr. Peter-Alexander Wacker as its chairman and Manfred Köppl as its deputy chairman at its inaugural meeting directly after the Annual Shareholders' Meeting.

Effective September 30, 2023, Beate Rohrig stepped down from the Supervisory Board. Harald Sikorski succeeded her as employee representative on the Supervisory Board on October 1, 2023. He was appointed at the Executive Board's request by order of the District Court of Munich dated September 13, 2023.

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Compensation Report of Wacker Chemie AG for 2023

1. Executive Board Compensation

I. Approval by Shareholders of the Revised Compensation System

At its meeting held on March 2, 2023, the Supervisory Board - following the recommendation of its Executive Committee

• approved a revised compensation system for the members of the Executive Board. The revised compensation system applies to the compensation years starting on January 1, 2023. It was submitted to the Annual Shareholders' Meeting on May 17, 2023, in accordance with Section 120a (1) of the German Stock Corporation Act, and approved by shareholders with 85.87 percent of the vote.

The system was revised to ensure Executive Board compensation that is in line with the market and is competitive.

II. Executive Board Compensation Components in 2023 at a Glance

The compensation of the members of the Executive Board comprises both fixed and variable components. The fixed components include the fixed annual base salary, additional benefits and the company pension. Variable compensation is based on transparent, performance-based parameters that reflect the company's business success and sustainability goals. The portion of long-term variable compensation greatly exceeds that of short-term variable compensation, placing the emphasis on the company's long-term performance. The system of compensation for members of the Executive Board is governed by the company's size, complexity and economic situation, as well as by its future prospects. It is further aligned with the corporate strategy, creating an incentive for successful and sustainable corporate governance. The compensation system helps promote Wacker Chemie AG's business strategy. This strategy focuses on profitable growth and on holding a leading competitive position in most of the business fields where the company is active, while observing the principle of sustainable development.

Compensation System for Compensation Years Starting on January 1, 2023

A complete description of the compensation system for the Executive Board can be found on the company's website at

https://www.wacker.com/cms/en-de/about-wacker/investor-relations/corporate-governance/compensation-system-board-of-directors.html.

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Compensation Report of Wacker Chemie AG for 2023

1. Fixed Compensation Components 1.1 Annual Base Salary

Objective and Relevance to Corporate Strategy

The annual base salary is based on the role and the area of responsibility of the respective Executive Board member and should provide an adequate basic income. It provides the basis and incentive for attracting highly qualified individuals to serve as members of the Executive Board and for retaining them over the long term.

Structure

The annual base salary is a fixed cash payment for the entire year and is remitted to members of the Executive Board as a salary in twelve monthly installments. It is paid pro rata in the case of an appointment beginning or ending during the year. In 2023, this applied to Mr. Willems and Dr. Kirsten, as they respectively left and joined the company during the year. The annual base salaries paid to Dr. Hartel and Dr. Ohler were also calculated on a pro-rata basis because their annual base salaries increased effective November 1, 2023.

1.2 Company Pension

Objective and Relevance to Corporate Strategy

A competitive, attractive company pension is a strategic tool used to recruit highly qualified individuals and to retain them for the long term. Incorporating such a pension plan into our compensation structure not only signals our sense of responsibility toward our Executive Board members, it also allows us to strengthen our competitive standing when it comes to competing for the best talent.

Structure

Executive Board members are initially entitled to a basic company pension through the pension fund (Pensionskasse der Wacker Chemie VVaG), which covers income up to the contribution assessment ceiling of the German statutory pension insurance system. For this purpose, the company and the Executive Board make monthly contributions to the pension fund.

Executive Board members also receive pension commitments under defined benefit and defined contribution plans as follows:

Until the end of 2020, retirement benefits were based on defined benefit pension plans. In a defined benefit plan, Executive Board members are entitled to the payment of an annual pension when a pension event occurs, i.e. upon reaching the agreed retirement age or in the event of permanent occupational disability. The amount of the pension is calculated on the basis of the last pensionable fixed annual salary received and the length of Executive Board membership. A percentage of the pensionable annual base salary was defined as a base amount and was adjusted by an annual percentage rate of increase for each year of service.

Effective January 1, 2021, this defined benefit pension plan was switched to a defined contribution plan as described below: The company provides a pension contribution in the amount of 30 percent of the annual base salary to be credited to a virtual cash account in twelve equal installments. Until April 2022, the cash account earned interest at

2 percent p.a. Since May 2022, the monthly contribution amounts have been paid into a group CTA (contractual trust arrangement) and invested in the capital market, with no guarantee of surpluses. The pension account balance is the respective balance of the cash account. When it is paid out, the pension account balance will amount to at least the total of the contributions paid in. When a pension event occurs, the pension account balance can be paid out in one lump sum or in ten annual installments. Other pension payments are not offset against the pension. If the pension event occurs prematurely due to the disability or death of an Executive Board member, a minimum coverage amount of 2.5 annual base salaries is granted.

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Compensation Report of Wacker Chemie AG for 2023

The following transitional regulations were agreed for those Executive Board members who were active at the time of the switch:

No changes were made to the existing defined benefit pension plan for Dr. Staudigl (who left in May 2021) and

Mr. Willems (who left in May 2023) due to the short remaining terms of their contracts. They were not switched to the defined contribution plan. As in the case of former Executive Board members who had already left at the time of the switch, they therefore receive an annual pension under the defined benefit plan described above.

The following applies for Dr. Hartel and Dr. Ohler: They keep their entitlements earned as of December 31, 2020, (derived from the value of plan assets) under the contract terms then applicable (including the provisions for disability and survivor's benefits, and including consideration of benefits under other plans such as the supplementary company pension that they had earned as employees of the company before they were appointed to the Executive Board). They have been granted a lump-sum option for the entitlements they earned under the old system. Since January 1, 2021, they have received an additional defined contribution pension commitment as described previously, with annual contributions amounting to 30 percent (Dr. Hartel) and 25 percent (Dr. Ohler), respectively, of their base salary. The annual contributions were set taking into account the respective existing entitlements under the previous benefit plan.

Any ongoing deferred compensation agreements with members of the Executive Board were terminated effective December 31, 2020. The entitlements acquired in the past by Dr. Staudigl, Dr. Ohler and Ms. Wörl remain in effect.

1.3 Additional Benefits

Objective and Relevance to Corporate Strategy

Attractive additional benefits are aimed at recruiting and retaining highly qualified individuals for the Executive Board and at fostering the Executive Board members' efficiency, security and health. These compensation elements not only reflect the company's genuine interest in the well-being of its managers, but also reinforce our conviction that the long-term performance of the Executive Board feeds directly into the company's success.

Structure

One of the additional benefits granted to members of the Executive Board is a company car for private as well as business use. A driver is available when the car is used for business travel. The company additionally reimburses any taxes on non-cash fringe benefits for private use of a company car and for the commute from home to the workplace, as well as for the service of a driver. In addition, members of the Executive Board are included in an accident insurance policy covering accidents that occur both during and outside work. Moreover, Executive Board members receive health and long-term care insurance subsidies, as well as reimbursement of costs related to preventive medical checkups.

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Compensation Report of Wacker Chemie AG for 2023

2. Variable Compensation Components 2.1 Short-TermIncentive (STI)

Objective and Relevance to Corporate Strategy

The STI sets incentives for a sustainable corporate policy, promotes profitable growth and enhances the company's value over the long term, while taking into account the Executive Board's overall responsibility.

In the context of value-based management, an integral part of corporate policy, the amount of the STI depends on the achievement of agreed annual WACKER Group earnings targets set by the Supervisory Board for all Executive Board members.

The first of these targets concern two measures of operating performance: operating net cash flow (op. NCF) and business value contribution (BVC). They are determined based on the outlook for the compensation year and, among other things, support the corporate goal of increasing cash inflow from operating activities. The aim of BVC at WACKER is to generate a residual profit that exceeds the cost of capital, thereby creating value within the company. Net cash flow is defined as the sum of the cash flows from operating activities and from long-term investing activities before securities. Operating net cash flow is a simplified cash flow calculation depicting only selected operating transactions. Operating net cash flow indicates whether WACKER can finance ongoing operations and necessary capital expenditures with funds from its own operating activities. The company's goal is to generate sustained positive operating net cash flow. Because both targets are set based on the planning for the compensation year, they are referred to as "planned BVC" and "planned operating NCF."

The other two STI targets concern measures of strategic performance - target EBITDA margin and return on capital employed (ROCE) - for which absolute target values are set that are derived from the overriding goal of sustainably and continuously increasing the company's value in the long term. Both are important criteria for achieving the specific strategic goals of growing faster than the chemical-sector average, achieving attractive margins with products, and earning the cost of capital. ROCE is a clear indicator of how profitably the capital required for business operations is being employed. ROCE is defined as earnings before interest and taxes divided by capital employed. The EBITDA margin performance category shows how successful the company is compared with the competition and provides incentives for enhancing that relative performance even further. Because both measures are based on absolute target values, they are referred to as "target ROCE" and "target EBITDA margin."

Structure

The STI is a performance-related bonus with a one-year assessment period. The assessment period is the compensation year.

The payout under the STI amounts to 80 percent of the average annual base salary in the compensation year for 100- percent target achievement, and it is limited to a maximum of 144 percent of the average annual base salary. For initial appointments, the Supervisory Board may agree alternative arrangements, in particular by setting a minimum or maximum STI or a lower target amount for 100-percent target achievement and/or a lower maximum value. When she was initially appointed (for the period from May 12, 2021, through April 30, 2024), a target amount of 60 percent of her average annual base salary for 100-percent target achievement, and a maximum value of 108 percent, were set for her. When Dr. Kirsten was appointed, a minimum target achievement of 100 percent was set for him. for the 2023 compensation year, irrespective of the actual target achievement.

The basis for the STI is the achievement of the financial performance targets (target value, minimum value, maximum value) set by the Supervisory Board for each compensation year. The following performance criteria applied for the 2023 reporting year: target ROCE, planned BVC, target EBITDA margin and planned operating NCF.

The target value represents 100-percent achievement of each target. Target values or performance criteria cannot be changed retroactively during the compensation year.

Target achievement, i.e. the value actually achieved for each performance criterion, is ascertained by the Supervisory Board after the close of the compensation year.

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Compensation Report of Wacker Chemie AG for 2023

Target achievement is converted into a target achievement factor ("TAF") for each performance criterion, applying the following system.

The annual overall target achievement factor corresponds to the sum of the weighted target achievement factors for the individual performance criteria. Next, the overall target achievement factor is converted by means of a formula into a bonus percentage representing the target-achievement success level on a scale from 0 percent to a maximum of

144 percent (or a lower maximum for Executive Board members appointed for the first time). Upon her initial appointment to the Executive Board, a maximum of 108 percent was set for Ms. Wörl.

The gross STI payout amount is calculated by multiplying the bonus percentage by the average annual base salary for the compensation year.

The gross STI payout amount is determined by the Supervisory Board at its first meeting of the year that follows the compensation year.

2.2. Long-Term Incentive (LTI)

Objective and Relevance to Corporate Strategy

The LTI sets incentives for a sustainable corporate policy, promotes profitable growth and enhances the company's value over the long term, while taking into account the Executive Board's overall responsibility. Furthermore, this arrangement ensures that members of the Executive Board share in both positive and negative corporate trends over an extended period.

The overall target achievement factor for the LTI is based on financial and non-financial performance targets that are relevant to WACKER's strategy. In terms of the financial performance criteria, i.e. target ROCE, planned BVC, target EBITDA margin and planned operating NCF, the incentives to promote the business strategy described above for the STI also apply here. The overall target achievement factor additionally comprises non-financial strategic and ESG targets. When setting these targets, the Supervisory Board can focus in particular on key strategic topics for the compensation year in the categories of growth, competitive position, innovation, successful project completions or progress in digital transformation.

As one of the five strategic corporate goals, sustainability is a core element of WACKER's business model. When setting its targets, the Supervisory Board may especially take into account the sustainable development goals published in the non-financial report for the WACKER Group. These goals include, for example, reducing specific CO2 emissions and specific energy consumption, the overall accident rate, increasing the share of sustainable products in the product portfolio and even employee and customer satisfaction.

Structure

The LTI provides for a three-year assessment period and for a subsequent requirement to acquire shares coupled with a three-year holding period. The assessment period comprises the compensation year and the two fiscal years immediately preceding the compensation year. The three-year assessment period is thus forward-looking in relation to the compensation year and backward-looking in relation to the two preceding fiscal years.

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Compensation Report of Wacker Chemie AG for 2023

The LTI payout amounts to 100 percent of the average annual base salary in the compensation year for 100-percent target achievement, and the calculated bonus is limited to a maximum of 180 percent of the average annual base salary. The Supervisory Board may agree alternative arrangements for newly appointed members of the Executive Board, in particular by setting a lower target amount for 100-percent target achievement and/or a lower maximum value and/or freely setting the bonus percentages for the assessment period and, for example, using the target value or a minimum and/or maximum value as the basis. When Mrs Wörl was initially appointed (for the period from May 2021 through April 2024), a target amount of 80 percent of her average annual base salary for 100 percent target achievement, and a maximum value of 144 percent, were set for her.. A transitional arrangement had to be agreed for Dr. Kirsten, who was initially appointed to the Executive Board in the 2023 reporting year, because he was not yet a member of the Executive Board in 2021 and 2022, years that are included in the LTI calculation for the 2023, 2024 and 2025 compensation years: a hypothetical target achievement of 100 percent was agreed for 2021 and 2022, and a target achievement of at least 100 percent agreed for 2023.

The basis for the LTI is the achievement of the performance criteria defined by the Supervisory Board for the compensation year and for the two other fiscal years of the assessment period. The Supervisory Board defines the performance criteria, which relate to both financial and non-financial targets, for each compensation year. Two ESG targets that are particularly important to the strategy were chosen in the reporting year as part of the non-financial targets. WACKER has set itself the goal of halving its CO2 emissions (Scope 1 and 2) by 2030 compared with 2020, while safety is also a top priority for the company. Accordingly, the reduction of absolute CO2 emissions (Scope 1 and 2) and the accident rate (as measured by the WACKER Process Safety Incident Rate, WPSIR1) were defined as non- financial performance criteria for 2023. The financial LTI targets for the 2023 reporting year related to the following performance criteria: target ROCE, planned BVC, target EBITDA margin and planned operating NCF.

For the compensation year, the Supervisory Board sets a target value, a minimum value and a maximum value for each financial and non-financial performance criterion. The target value represents 100-percent achievement of each target. If the achievement of a non-financial target cannot be determined and measured, the Supervisory Board defines an alternative method for measuring achievement of that non-financial target as regards the compensation year and sets a target value and, where applicable, minimum and maximum values. Target values or performance criteria cannot be changed retroactively during the compensation year.

Target achievement, that is, the value actually achieved for each performance criterion, is determined by the Supervisory Board for each fiscal year of the assessment period after the close of the respective fiscal year.

Target achievement is converted into a target achievement factor ("TAF") for each performance criterion, applying the same system as that described above for the STI and shown in the chart under A. II. 2. 1.

The annual overall target achievement factor corresponds to the sum of the weighted target achievement factors for the individual performance criteria.

Next, the overall target achievement factor (sum of the target achievement factors in the performance criteria) for the compensation year is converted by means of a formula into a bonus percentage representing the target-achievement success level on a scale from 0 percent to a maximum of 180 percent (or a lower maximum for Executive Board members appointed for the first time). Upon her initial appointment to the Executive Board, a maximum of 144 percent was set for Ms. Wörl.

The calculated bonus under the LTI is derived from the bonus percentages for the compensation year and from averages of the bonus percentages for the two years immediately preceding the compensation year. An exception to this rule was made for Dr. Kirsten in the reporting year, applying the method described above and agreeing a hypothetical bonus percentage of at least 100 percent.

The calculated bonus under the LTI is arrived at by taking the average of the bonus percentages during the assessment period and multiplying it by the average annual base salary for the compensation year.

• The number of safety-related or environmentally relevant incidents per 1 million hours worked.

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Compensation Report of Wacker Chemie AG for 2023

The Supervisory Board has the option to increase or reduce this calculated bonus by as much as 30 percent at its own discretion, taking into account all circumstances, the Executive Board's performance and the achievement of ESG and strategic targets. This option was not applied in the reporting year. The virtual gross payout under the LTI thus obtained is determined by the Supervisory Board at its first meeting of the year that follows the compensation year. The amount of the calculated net payout is determined individually for each Executive Board member, depending on that member's personal tax situation, and invested in company stock. Any resulting fractions of shares are paid out in cash. The number of shares is governed by the Xetra closing price of WACKER shares on the first exchange trading day after the date of the Annual Shareholders' Meeting (record date). The company acquires the shares in the name and for the account of the respective Executive Board member. They are held in custody in a restricted securities account in the name of the respective Executive Board member at a bank designated by the company. The shares are subject to a vesting period of three years from the record date.

2.3 Joining or Leaving During the Year, Other Exceptional Incidents or Developments

If the Executive Board member has not worked for the company for twelve months in a fiscal year, the gross payout under the STI and the virtual gross payout under the LTI are prorated accordingly. In 2023, this applied to Mr. Willems and Dr. Kirsten - in the case of Mr. Willems, the (calculated) payout amounts under the STI and LTI were reduced by eight-twelfths, with a reduction by four-twelfths for Dr. Kirsten.

If the employment relationship is ended during the reporting year - as was the case for Mr. Willems in 2023 - the entitlements to the STI and the LTI nevertheless remain subject to the contract terms governing settlement and payout. In such cases, the respective vesting periods under the LTI remain in force until they expire. The vesting periods in the case of Mr. Willems are two years for those shares acquired under the previous long-term bonus up to and including 2020, based on the previous bonus rules, and three years for those shares acquired under the LTI beginning in 2021.

If the employment relationship is ended by death or permanent occupational disability, the prorated virtual gross payout for the LTI is disbursed in cash instead of shares in the month after it would be fixed under the contract. The vesting period for all shares acquired as variable compensation ends prematurely at the close of the calendar month in which the employment relationship ends. There were no such cases in the reporting year.

In the event of exceptional incidents or developments including, for example, the acquisition or disposal of an enterprise or a corporate unit, the Supervisory Board is authorized to make appropriate modifications to the plan terms of the STI and those of the LTI at its sole discretion. No such modifications were made in the reporting year.

3. Other

The Supervisory Board is authorized to grant additional benefits to newly appointed Executive Board members. Such benefits can be agreed for a limited time or for the full duration of the executive employment agreement. The benefits may include a sign-on bonus, reimbursements of forfeited variable compensation at a previous employer or of other financial disadvantages, as well as benefits associated with relocation (e.g. moving expenses, cost of running two households).

Benefits like these are often a prerequisite for recruiting highly qualified individuals for the Executive Board. This was the case in 2023 with Dr. Kirsten, with whom an agreement was reached on benefits including a sign-on bonus, compensatory payments for forfeited bonuses at his previous employer, and the assumption of moving and accommodation expenses (see A. III. 1). Part of the sign-on bonus and portions of the compensatory payments for forfeited bonuses at Dr. Kirsten's previous employer will not be owed and granted until 2024 and 2025.

The company also maintains a D&O insurance policy for its Executive and Supervisory Board members. The insurance covers the personal liability risk in the event that claims are asserted against these individuals for financial losses in connection with their work. The coverage for the Executive Board members has a deductible that meets the requirements set out in the German Stock Corporation Act.

Finally, members of the Executive Board may, in individual cases, be indemnified for legal expenses and attorney's fees (including any taxes imposed on the resulting in-kind benefit). Such indemnification is subject to the Supervisory Board determining, after an examination of the facts, that there are no indications of a breach of due diligence by the Executive Board member, and to agreement on a clawback clause if it is found that the Executive Board member acted in culpable breach of duty against the company. If the question of whether the Executive Board member applied the diligence of an prudent managing director is in dispute, the burden of proof is on that member (Section 93 (2) sentence 2 of the German Stock Corporation Act). No such scenario arose in 2023.

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