Komax : 12 April 2023 – Annual General Meeting of Komax Holding AG Compensation Report

Content	Management	ESG	Corporate	Financial
Overview	Report	BReportricht	Governance	Report

COMPENSATION REPORT

Introduction by the Chairman
of the Remuneration Committee	86
Compensation in the 2022
financial year at a glance	87
Compensation philosophy of the Komax Group	88
Tasks and competencies of the
Remuneration Committee	89
Provisions of the Articles of Association
on compensation	91
Principles of compensation policy	92
Structure of the compensation system	93
Compensation and shareholdings
of the Board of Directors in 2022 (audited)	98
Compensation and shareholdings
of the Executive Committee in 2022 (audited)	99
Report on the audit of the Compensation Report	102

This Compensation Report explains the philosophy behind the compensation concept of the Komax Group and provides an overview of the compensation policy and compensation systems of Komax Holding AG, as well as the principles used to determine the compensation of the Board of Directors and the Executive Committee. In addition, the compensation paid in 2022 is disclosed in detail, including a comparison with the previous year. The Compensation Report has been drawn up in accordance with the provisions of the Swiss Code of Obligations, the Directive on Corporate Governance (DCG) of SIX Swiss Exchange, and the principles of the Swiss Code of Best Practice for Corporate Governance of economiesuisse.

85	Komax Group Annual Report 2022

Content	Management	ESG	Corporate	Compensation	Financial
Overview	Report	Report	Governance	Report	Report

• INTRODUCTION BY THE CHAIRMAN OF THE REMUNERATION COMMITTEE

Dear Shareholder,

The 2022 financial year was an intense and successful one for the Komax Group. The company recorded new record figures for order intake and revenues, while at the same time significantly increasing EBIT. The strategic financial targets set for 2023 were actually met in the year under review. Management worked tirelessly to address the numerous challenges, which included the supply chain situation, the still tangible effects of the coronavirus pandemic, and the repercussions of the war in Ukraine. On top of this came the combination with the Schleuniger Group, which was completed during the year.

As the Komax Group now has a new anchor shareholder, Metall Zug AG, Dr. Jürg Werner was appointed to the Board of Directors as its representative. The Remuneration Committee dealt with various personnel issues in 2022. These included the search for a successor to Executive Committee member Marcus Setterberg, who was responsible for the company's testing activities up to the end of 2021. A very experienced successor was found in the person of Oliver Blauenstein, who has strengthened the Executive Committee with effect from 1 January 2023. Furthermore, with a view to succession planning, the Committee also started its search for a new CFO. Andreas Wolfisberg, CFO of the Komax Group since 1996, will retire in 2023 after 32 years with the company. Christian Mäder, a highly distinguished management figure, will join the Komax Group on 1 August 2023. He will then assume responsibility for the CFO function on 1 October 2023, when he will also become a member of the Executive Committee.

The Komax Group stuck by its principle of fixed compensation for the Board of Directors in 2022, thereby guaranteeing independence in the supervision of the Executive Committee. Members of the Board of Directors receive a fixed compensation amount, which is regularly reviewed to ensure market conformity through a peer comparison with other listed, internationally active Swiss industrial companies of comparable size and complexity. Members of committees are paid an additional fixed sum.

The remuneration system for the Executive Committee was updated in 2021 and retained in the reporting year. In this system, the Komax Group adheres to a consistent pay-for-performance philosophy. In addition to a fixed base salary, members receive variable compensation which is largely determined by the commercial success of the company and the performance achievement level in respect of the targets set for the individual Executive Committee members. The remuneration policy of the Komax Group has been moderate for many years, and will remain so going forward. To ensure even greater transparency, the structure of the Compensation Report has been reworked.

For many years now, the Komax Group has adopted a sustainable approach to company develop- ment. To put an even greater focus on of this strategic principle, the Board of Directors will appoint a Sustainability and Innovation Committee after the next Annual General Meeting. This body will support and advise the Executive Committee in respect of the strategic development of the key themes of technology, innovation, and sustainability. Among other things, it will also monitor the sustainability principles and sustainability reporting of the Komax Group. The Sustainability and Innovation Committee will comprise three members.

You will be able to vote on this year's Compensation Report at the Annual General Meeting of Shareholders on 12 April 2023. You can also express your opinion on our compensation system through the votes on the proposed maximum possible total compensation. This is very important to us. In order to ensure continuity, the current members of the Remuneration Committee will stand for re-election.

Yours sincerely

Prof. Dr. Roland Siegwart

Chairman of the Remuneration Committee

86	Komax Group Annual Report 2022

Content	Management	ESG	Corporate	Compensation	Financial
Overview	Report	Report	Governance	Report	Report

• COMPENSATION IN THE 2022 FINANCIAL YEAR AT A GLANCE

Compensation of the Board of Directors

In order to ensure their independence in their supervisory function, members of the Board of Directors receive a fixed proportion of their compensation in cash plus a fixed proportion in restricted shares. In 2022, the total compensation of the Board of Directors amounted to CHF 1.0 million, and was therefore in line with the maximum amount of CHF 1.1 million approved for the 2022 financial year at the 2021 Annual General Meeting. This maximum figure was adhered to despite the election of an additional member of the Board of Directors in the person of Jürg Werner at the 2022 Annual General Meeting in April.

in CHF

1 100 000

	985 961	954 309
	58 461
		56 809
	190 000		190 000
	737 500		707 500

Total compensation 2022

Total compensation 2021

Maximum total compensation for

2022 approved by the 2021 AGM

Fixed compensation in cash

Fixed compensation in shares

Social benefits

Compensation of the Executive Committee

The compensation of the members of the Executive Committee consists of a fixed base salary, a variable cash bonus, and a long-term incentive system in the form of performance share units (PSUs) with a three-year vesting period. In 2022, the total compensation of the Executive Committee amounted to CHF 3.7 million, and was therefore well below the maximum overall amount of CHF 5.2 million approved for the 2022 financial year at the 2021 Annual General Meeting.

CEO			Total other members of the Executive Committee
Variable compensation 2022: 53%		Variable compensation 2022: 44%
	7%			9%
19%	7%		16%	9%
		40%
	18%		14%
	40%
				51%	47%				Fixed compensation
				26%					Cash bonus
	35%							PSU allocation
		28%					Social benefits
	34%

2022 2021

87	Komax Group Annual Report 2022

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Overview	Report	Report	Governance	Report	Report

• COMPENSATION PHILOSOPHY OF THE KOMAX GROUP

The Komax Group pursues a long-term business strategy with a view to creating lasting value for the good of all stakeholder groups. Above-average profitability and sustainable growth are key objectives here. This goes hand in hand with environmentally conscious, socially aware, and responsible conduct towards all stakeholder groups.

The compensation philosophy is designed to be in alignment with this corporate strategy and the nature of the Komax Group's business model. The compensation amounts paid to the Executive Committee should be attractive in order to acquire and retain outstanding managers while at the same time setting incentives for the long-term success of the Komax Group. In addition, it should be fair, transparent, and proportionate. To this end, the Komax Group has created a compensation system that offers a balance of short-term and long-term as well as fixed and variable components. It adheres to both commercial and ethical principles in equal measure.

Principles of the Komax Group's compensation philosophy - what matters to us.

WE ...

• Pursue a clear pay-for-performance approach involving a mix of fixed and variable compensation.
• Align compensation with the commercial success of the Komax Group and the individual performance of Executive Committee members.
• Pay only performance-related bonuses, not guaranteed bonuses.
• Regularly align performance-related compensation with shareholder interests.
• Focus on sustainable success through a long-term incentive system in order to harmonize the interests of management and the long-term interests of shareholders.
• Are committed to fair compensation that is based on job profile, responsibility, competence, and experience.
• Provide transparency with regard to structure and the payment of compensation.
• Ensure that compensation is in line with market rates through regular external analysis of similar positions in comparable companies in order to attract and retain top-quality managers.
• Define clearly measurable targets for each Executive Committee member.
• Define ceilings for compensation in order to ensure moderation.
• Do not pay severance compensation ("golden parachutes").
• Do not reward short-term profit maximization and inappropriately high risks at the cost of long-term company success.
• Restrict notice periods for Executive Committee members to a maximum of twelve months.

The Komax Group is a globally active technology company in the machinery industry, and primarily sells industrial capital goods. Its business model is subject to economic fluctuations. These are reflected in the variable component of compensation in order to reflect the Komax Group's strict pay-for-performance approach. As the company has its headquarters in Switzerland, the compensation of the Board of Directors and Executive Committee is also aligned with that of other internationally active Swiss industrial companies.

As is the case for other employees, the compensation of the Executive Committee is based on job profile, responsibility, competence, and experience. There are key differences in the amounts of variable compensation. The cash bonus for the Executive Committee is higher than that of other employees who receive variable compensation, in order to ensure a direct link between business development and individual performance. Furthermore, a long-term incentive system dependent on the financial success of the company is in place in the form of performance share units. The Komax Group takes care to ensure that the compensation of members of the Executive Committee is in reasonable proportion to that of other employees, as well as in line with market rates.

88	Komax Group Annual Report 2022

Content	Management	ESG	Corporate	Compensation	Financial
Overview	Report	Report	Governance	Report	Report

• TASKS AND COMPETENCIES OF THE REMUNERATION COMMITTEE

Under the Articles of Association, Organizational Regulations, and Regulations of the Remuneration Committee of Komax Holding AG, the Remuneration Committee is the supervisory body for staff and compensation policy within the Komax Group. The Committee amalgamates the tasks of a remuneration and nomination committee:

• Development and regular review of staff policy and compensation policy, including the principles of variable compensation and participation programs.
• Annual review of, and proposals for, the maximum total compensation payable to the Board of Directors and the Executive Committee, as well as preparation of the related proposals to the Annual General Meeting.
• Proposal on the individual compensation amounts payable to members of the Board of Directors and the CEO within the limits approved by the Annual General Meeting.
• Resolutions on the compensation payable to the other members of the Executive Committee within the limits approved by the Annual General Meeting.
• Succession planning for the Board of Directors, Executive Committee, and other key functions.
• Annual assessment of the independence of the members of the Board of Directors.
• Annual assessment of the performance of the CEO and the members of the Executive Committee.
• Preparation of the Compensation Report.

The Committee monitors and regularly discusses trends and developments in the area of compen- sation, including any changes to statutory provisions or changes to provisions on corporate gover- nance. The overall responsibility for the tasks and competencies assigned to the Remuneration Committee essentially remains with the Board of Directors.

Delineation of competencies

		CEO		Committee		Board of		Annual General Meeting
						Directors
Compensation policy, including the principles of variable
compensation and participation programs				proposes		approves
Maximum total compensation for the Board of Directors								approves
and the Executive Committee				proposes		submits		(binding vote)
Individual compensation of the members of
the Board of Directors				proposes		approves
Evaluation of the performance of the CEO				proposes		approves
Compensation of the CEO				proposes		approves
Evaluation of the performance of the other
members of the Executive Committee		proposes		approves
Individual compensation of the other
members of the Executive Committee		proposes		approves
Compensation Report				proposes		approves		confirms (advisory vote)

Under the Articles of Association, the Remuneration Committee consists of a maximum of three non-executive members of the Board of Directors. The Committee is elected by the Annual General Meeting. The members' term of office ends with the conclusion of the next Annual General Meeting. Re-election is permissible. The 2022 Annual General Meeting elected Roland Siegwart (Chairman), Andreas Häberli, and Beat Kälin to the Committee. The Remuneration Committee meets as often as business requires, but at least twice a year, generally in March and in December.

89	Komax Group Annual Report 2022