Ströer : Remuneration Report of Ströer SE & Co. KGaA for 2021

REMUNERATION REPORT

OF STRÖER SE & CO. KGAA FOR 2021

REMUNERATION REPORT OF STRÖER SE & CO. KGAA FOR 2021

Ströer SE & Co. KGaA (the 'Company') is a German pub-licly listed partnership limited by shares. It does not itself have a Board of Management. The general partner is Ströer Management SE, an entity that is not listed on a stock exchange. The Board of Management of Ströer Management SE conducts the business of this entity and thereby indirectly also that of Ströer SE & Co. KGaA.

The Company's remuneration report pursuant to sec- tion 162 of the German Stock Corporation Act (AktG) is presented below. It describes the remuneration granted and owed individually to the current and former members of the Board of Management and the Supervisory Board of the general partner (Ströer Management SE) and the Supervisory Board of Ströer SE & Co. KGaA in 2021. This report has been prepared jointly by the general partner

and the Supervisory Board of Ströer SE & Co. KGaA in line with the AktG requirements. With the aim of transparency, it includes all necessary and recommended disclosures on the structure and amount of the remu- neration of the Board of Management and Supervisory Board. The remuneration report is audited by the auditor in accordance with section 162 AktG and will be sub- mitted for approval by the annual shareholder meeting on June 22, 2022.

This report, including the enclosed audit report by the auditor, is also published on the website of Ströer SE & Co. KGaAhttps://ir.stroeer.com/investor-relations/financial-reports/

Cologne, March 11, 2022

On behalf of the Supervisory BoardOn behalf of the general partner

Christoph Vilanek

Chairman of the Supervisory Board of Ströer SE & Co. KGaA

Udo Müller Co-CEO of Ströer Management SE

Christian Schmalzl Co-CEO of Ströer Management SE

Henning Gieseke CFO of Ströer Management SE

Dr. Christian Baier COO of Ströer Management SE

Review of 2021 focusing on remuneration of the Board of Management

The COVID-19 pandemic continued to dominate the reporting year, as it had also done in 2020. Despite the difficulties and uncertainty caused by the pandemic, we recorded a significant year-on-year uptrend in all areas of the business in 2021. One particular development worthy of note was the growth in digital out-of-home advertising in 2021, reflected in the increase in additional advertising space and a generally high level of demand in the adver-tising market.

Strategy and remuneration of the Board of Management

We are one of the leading media enterprises in Germany and marry the pursuit of customer satisfaction with long-established sustainable and environmentally friendly business practices. Two key components of our 2030 sus- tainability strategy, efficiency and innovation, have always been part of our business model. The sustainability strat- egy combines our business strategy with environmental awareness and climate change mitigation, community- based approaches, and corporate governance aspects.

As our sustainability-oriented mindset can best be embed- ded in a meaningful way by making it a long-term pillar of corporate strategy with a direct link to the core business, these aspects must also be reflected in the remuneration of the Board of Management. Through approaches such as appropriate incentives for increasing earnings and reve- nue, the current remuneration system already encourages the Board of Management to implement the corporate strategy and generate lasting business growth. To maxi- mize value added, the one-year variable remuneration is heavily focused, for example, on generating cash, whereas the multi-year variable remuneration reflects an emphasis on consolidating and enhancing our infrastructure and market position over the long term. The new remuner- ation system introduces environmental, social, and cor- porate governance (ESG) targets, encompassing further sustainability approaches and stakeholder interests.

Board of Management remuneration: overview and key changes

The remuneration system for the Board of Management satisfies AktG requirements and is based on the recom- mendations set out in the German Corporate Governance Code. It is a major factor in helping to promote corporate strategy and the long-term growth of the Company.

In response to global trends and new regulations, the Supervisory Board of the general partner has decided to revise the remuneration system for the members of the Board of Management, so that there will now be an even stronger connection with sustainability and corporate strategy and a greater focus on the long term.

The previous remuneration system, which still applied to all members of the Board of Management in 2021, consisted of a basic salary, fringe benefits, and variable remuneration, the latter comprising one-year variable remuneration (short-term incentive, STI) and multi-year variable remuneration (long-term incentive, LTI). This proven pay-for-performance model is generally retained in the new, revised remuneration system. The system adjustments decided by the Supervisory Board of the general partner mainly relate to the structure of the vari- able remuneration components and satisfy the relevant requirements for the latest generation of remuneration systems:

• • Clear focus on corporate strategy

• • Simple, straightforward, and transparent approach

• • Significant reference to capital markets

• • Standard yet competitive system

• • Satisfaction of regulatory requirements.

Ströer SE & Co. KGaA is aiming to ensure that the busi- ness has an even greater focus on sustainability, social responsibility, and corporate governance going forward. Environmentally friendly practices and long-term profit- able growth are equally of the utmost importance. The new remuneration system for the members of the Board of Management, particularly the structure of the variable remuneration components and the selection of perfor- mance targets, is a key factor in support of these strategic objectives.

Overview of the main changes to the remuneration system

2021 structure

Future structure

Variable

Fixed

Stock options

Performance cash planShort-term incentive

Option plan discontinued

Cash-based plan switched to a share-based plan

Performance (phantom)

share plan

elbairaVESG performance criteria added

Short-term incentiveFringe benefitsBasic salaryFringe benefitsBasic salary

dexiF

The new system will be used for new and extended employ- ment contracts from now on. The current members of the

Board of Management have grandfather rights and were thus still remunerated using the previous system in 2021.

The details of the remuneration system used in 2021 were as follows:

Board of Management remuneration system in 2021

Remuneration component

Fixed remuneration components

Basic salary

Fixed annual salary paid in 12 equal amounts at month-end

Fringe benefits

Variable remuneration components

Short-term incentiveLong-term incentive

Other benefits

2021 structure

No change to the system

Certain customary benefits, e.g. company carsPlan type: Annual target bonus Performance criteria: Cash flows from operating activities (100%)

Cap: 150% or 200% of the target amount Payment: In cash in the month following approval of the consolidated financial statements for the financial year in questionPlan type: Performance cash plan Performance criteria: - ROCE (50% pro rata)

- Organic revenue growth (50% pro rata) Cap: Varies according to member of the Board of Management (150%/200%/300% of the target amount)

Measurement period: 3 years going forward Payment: In cash in the month following ap-proval of the consolidated financial statements for the final year of the performance periodPlan type: Stock options Performance criteria: - Adjusted EBITDA - Share price

Cap: 300% of potential profit Measurement period: 4-year holding period, 7- or 8-year exercise period Payment: In cash or shares

Non-compete clause, relatedMembers of the Board of Management are not compensation

Change of controlMalus/clawback provisions

Maximum remuneration

permitted to involve themselves in any com-peting activities for a period of 2 years after their employment contracts come to an end. For the period of this prohibition, they are paid compensation equating to half of the benefits last received under their respective contracts. There are no commitments to benefits if a member of the Board of Management prema-turely terminates his or her employment con-tract as a consequence of a change of control. There are no malus/clawback provisions.

Absolute maximum amountMaximum remuneration that can be granted

for 2021:

Udo Müller: EUR 5,871,000

Christian Schmalzl: EUR 4,860,000

Christian Baier: EUR 9,435,8001

Henning Gieseke (pro rata): EUR 4,896,6991

No change to the system

Plan type: Annual target bonus Performance criteria:

• - Cash flows from operating activi-ties (100%)

• - ESG targets (multiplier: 0.8-1.2) Cap: 240% of the target amount Payment: In cash in the month fol-lowing approval of the consolidated financial statements for the financial year in question

Plan type: Performance phantom share plan

Performance criteria:

• - ROCE (50% pro rata)

• - Organic revenue growth (50% pro rata)

• - Inclusion of share price performance

Cap: 300% of the target amount Measurement period: 4 years going forward

Payment: In cash in the month following approval of the consolidated financial statements for the final year of the performance period

No change to the systemNo change to the systemMalus/clawback provisions introducedAmount that can be received: Co-CEOs: EUR 7,000,000 Ordinary members of the Board of Management: EUR 3,000,000

Future structure

Objective

Ensures an appro-priate basic income based on the roles and responsibilities of the relevant member of the Board of Management.

Promotes the strategic objective of profitable growth and now also the impor-tance of the environ-mental, social, and corporate governance factors.

Promotes the strategic objective of competitive growth and ensures that the incentives have a long-term impact on conduct. Going forward, the new structure will have an even stronger refer-ence to the capital markets and take even greater account of the long-term interests of investors.

1 Mr. Baier and Mr. Gieseke were the only members of the Board of Management to be allocated stock options in 2021 (40,000 options for Mr. Baier and 20,000 options for Mr. Gieseke), which means that the relationship between the maximum remuneration of the Co-CEOs and that of the ordinary members of the Board of Management differed significantly in 2021 from that which would normally be the case.

Adoption of a resolution to approve the remuneration system for the members of the Board of Management

The new remuneration system was submitted to the annual shareholder meeting on September 3, 2021 in accordance with section 120a (1) AktG and approved by a majority of 87.5%.

Changes to the composition of the Board of Management

The Supervisory Board of the general partner appointed Henning Gieseke as a member of the Board of Manage- ment and Chief Financial Officer (CFO) with effect from June 1, 2021. As a result of this appointment, the number of members of the Board of Management increased from three to four in 2021. We are delighted that Mr. Gieseke joined our management team in 2021.

Basic principles for setting remuneration

Specifying target remuneration

At the beginning of 2021, the Supervisory Board of the general partner specified the amount of target remune- ration for the individual members of the Board of Management based on the previous remuneration system.

The following principles were taken into account when specifying the target remuneration. The total target remuneration had to be in reasonable proportion to the responsibilities and activities of the member of the Board of Management concerned and also take account of the position, market environment, and performance of the Company. Particular care was taken to ensure that remu- neration amounts were both appropriate and typical for the market. The absolute target amounts were deter- mined on the basis of the differing demands placed on each Board of Management function, which meant that the target remuneration varied between the individual Board of Management members.

The remuneration of the Board of Management comprises fixed and variable components. Variable remuneration is linked to the attainment of previously defined targets. If these targets are surpassed, the remuneration may rise up to a predetermined cap. Within variable remuneration, the long-term component accounts for a greater proportion than the short-term component.

The following tables show the contractual target remu- neration for the members of the Board of Management, together with the remuneration structure as a percentage of the total remuneration for 2021.

As Henning Gieseke was only appointed to the Board of Management with effect from June 1, 2021, his remu- neration is reported proportionately.

Target remuneration in 2021 for the individual members of the Board of Management and percentage breakdown

EUR k

EUR k	2021	2021 (%)
Basic salary	1,360	42.2
Fringe benefits	111	3.4
Pension payment	0	0.0
Total fixed remuneration	1,471	45.7
2021 one-year variable remuneration	850	26.4
Multi-year variable remuneration
LTI 1 (2021-2023 revenue growth)	450	14.0
LTI 2 (2021-2023 EBIT/ROCE)	450	14.0
Total variable remuneration	1,750	54.3
Other (e.g. severance payment)	0	0.0
Service cost for occupational pension plan	0	0.0
Total remuneration	3,221	100.0

EUR k

EUR k	2021	2021 (%)
Basic salary	1,300	48.0
Fringe benefits	10	0.4
Pension payment	0	0.0
Total fixed remuneration	1,310	48.3
2021 one-year variable remuneration	650	24.0
Multi-year variable remuneration
LTI 1 (2021-2023 revenue growth)	375	13.8
LTI 2 (2021-2023 EBIT/ROCE)	375	13.8
Total variable remuneration	1,400	51.7
Other (e.g. severance payment)	0	0.0
Service cost for occupational pension plan	0	0.0
Total remuneration	2,710	100.0

Udo Müller,

Co-CEO, member of the Board of Management since 2002

Christian Schmalzl

Co-CEO, member of the Board of Management since 2012