Compensation governance

Nomination and Remuneration Committee

The Articles of Association, the Organizational Regulations of the Board of Directors and the Nomination and Remuneration Committee Regulations (on medmix.swiss/Investors/Governance; under Downloads) define the functions of the Nomination and Remuneration Committee. The Nomination and Remuneration Committee supports the Board of Directors in nominating and assessing candidates for the Board of Directors and Executive Committee positions, establishing and reviewing the compensation strategy and principles, and preparing the respective proposals to the Shareholders’ Meeting regarding the compensation of the members of the Board of Directors and of the Executive Committee.

The Nomination and Remuneration Committee is responsible for the following activities and submits all proposals concerning these activities to the Board of Directors, which has the final decision authority:

• Periodic assessment of the membership structure of the Board of Directors, determination of selection principles, and identification of potential candidates for the Board of Directors
• Succession planning for the CEO and other Executive Committee positions
• Periodic assessment of the compensation policy and programs
• Determination of performance targets for the CEO and the other Executive Committee positions for the purpose of the incentive plans
• Preparation of the respective proposals to the Shareholders’ Meeting on the maximum aggregate amounts of compensation for the Board of Directors and for the Executive Committee
• Determination of the target compensation for the CEO and for the other Executive Committee positions
• Preparation of the compensation report

The table below describes the levels of authority:

Compensation Governance: Levels of authority

The Nomination and Remuneration Committee consists of a maximum of three non-executive and independent board members. The members of the Nomination and Remuneration Committee are elected individually and annually by the Shareholders’ Meeting for the period of office until the following ordinary AGM.

On April 28, 2023, David Metzger was elected for the first time and Rob ten Hoedt (Chairman) and Barbara Angehrn were re-elected as members of the Nomination and Remuneration Committee. Grégoire Poux-Guillaume did not stand for re-election.

The Nomination and Remuneration Committee meets as often as the business requires, but at least twice a year. In 2023, the Nomination and Remuneration Committee held four meetings and information on attendance is available in the Corporate Governance section of this report.

The Chairman of the Nomination and Remuneration Committee reports to the next meeting of the full Board of Directors on the activities of the Nomination and Remuneration Committee and the matters discussed. The Chairman, as far as necessary, submits the respective proposals for approval by the Board of Directors. The minutes of the Nomination and Remuneration Committee meetings are available to all members of the Board of Directors. The Nomination and Remuneration Committee may appoint third parties to provide independent advice or perform services as it deems necessary for the fulfillment of its duties. Members of the management team do not participate in meetings where their compensation is being discussed and resolved.

Shareholders’ role and engagement

The company is keen to receive shareholders’ feedback on the compensation policy and programs. Further, the company proposes to regularly meet with shareholders and shareholder representatives to understand their perspectives. At the AGM, shareholders will consider and approve the maximum aggregate compensation amounts for the Board of Directors and for the Executive Committee in an annual binding vote. The compensation report will be submitted for shareholder approval in an advisory vote.

Further, the Articles of Association, which are also subject to shareholders’ approval, regulate the principles of compensation. Minor changes were made to the Articles of Association at the AGM 2023 as the Swiss Parliament adopted a revision of the corporate law on June 19, 2020, which entered into force on January 1, 2023 (subject to certain transitional provisions). Pursuant to the new corporate law, Swiss corporations are obliged to revise their corporate documents to comply with the new law by the end of 2024. Thus, Articles 30 and 32 of the Articles of Association were slightly amended:

• Article 30 no longer foresees an authorization to increase already approved compensation (supplemental amount) for internal promotions within the executive management.
•  Article 32 now includes a cap for a maximum non-compete compensation in connection with post-contractual non-compete agreements with members of the Board of Directors and the Executive Committee (max. average total annual compensation over the last three financial years).

The Articles of Association in the current version include the following provisions related to compensation: (the full version of the Articles of Association can be found on medmix.swiss/Investors/Governance, under Downloads).

• Principles of compensation (Article 31): non-executive members of the Board of Directors receive fixed compensation only. Members of the Executive Committee receive fixed and variable compensation elements. The variable compensation may include short-term and long-term variable compensation components. These are governed by performance metrics that take into account the performance of the company, the group or parts of it, targets in relation to the market, other companies or comparable benchmarks and/or individual targets, as well as strategic and/or financial objectives. Compensation may be paid in the form of cash, shares, options, financial instruments or similar units, in kind, in services, or in other types of benefits.
• Shareholders’ binding vote on remuneration (Article 29): the Shareholders’ Meeting shall approve the maximum aggregate amount of compensation for the Board of Directors for the next term of office and the maximum aggregate amount of compensation for the Executive Committee for the following financial year. The Board of Directors shall submit the annual compensation report to an advisory vote at the AGM.
• Additional amount for members of the Executive Committee hired after the vote on remuneration by the Shareholders’ Meeting (Article 30): if the maximum aggregate amount of compensation as approved by the Shareholders’ Meeting is insufficient, up to 40% of the maximum aggregate amount of compensation approved for the Executive Committee shall be available, without further approval, for the compensation of the members of the Executive Committee who were appointed after the AGM.
• Agreements with Members of the Board of Directors and the Executive Committee (Article 32): Employment agreements for a fixed term may have a maximum duration of one year. Renewal is possible. Employment agreements for an indefinite term may have a termination notice period not exceeding twelve months. Non-compete agreements for the time after termination of an employment agreement are permissible and shall not exceed one year. Their consideration shall not exceed the last total annual target compensation such member was entitled to prior to termination and shall in no event exceed the average of the compensation of the last three financial years.
•  Loans, credit facilities, and post-employment benefits for members of the Board of Directors and of the Executive Committee (Article 34): the company may not grant loans or credits to members of the Board of Directors and of the Executive Committee.

Activities in other organizations

Based on Article 734e of the Swiss Code of Obligations, the compensation report must specify the functions of the members of the Board of Directors and the Executive Committee in other for-profit entities within the meaning of Article 626 para. 2 no. 1 of the Swiss Code of Obligations (external mandates). For this, the following table includes the name of the company and the function exercised.