Compensation architecture for the Board of Directors

The compensation of the Board of Directors is fixed and does not contain any performance-based variable component. This ensures that the Board of Directors is truly independent in fulfilling its supervisory duties towards the Executive Committee.

The compensation of the Board of Directors is governed by a compensation regulation, is reviewed by the Nomination and Remuneration Committee annually and, if necessary, adjusted by a decision of the full Board of Directors based on a proposal by the Nomination and Remuneration Committee.

The compensation of the Board of Directors consists of a fixed cash component and a restricted share unit (RSU) component with a fixed grant value. The fixed grant value equals 50% of the Board fees (total amount, including the basic fees and any additional fees but excluding any lump-sum expenses) while the other 50% are paid out in cash. Each RSU represents a right to receive a medmix share free of charge after a certain period, as further detailed below. Further, members of the Board of Directors are entitled to a lump-sum to cover business expenses. In addition to the lump-sum amounts, members of the Board of Directors living abroad will be reimbursed for any expenses incurred in connection with the traveling to attend Board meetings.

The ongoing compensation structure and amounts for the members of the Board of Directors are described in the table below:

Compensation structure of the Board of Directors ¹⁾

The RSU component strengthens the long-term alignment of the interests of the Board of Directors with those of the shareholders. To reinforce the focus of the Board of Directors on the long-term strategy and to strengthen its independence from the Executive Committee. The compensation of the Board of Directors contains no performance-related elements and members of the Board of Directors are not entitled to pension benefits.

The amount of compensation for the Chairman and for the other members of the Board of Directors is determined through the assessment of the level of compensation offered by peer companies in Switzerland. The compensation reflects the responsibility and complexity of their respective function, the professional and personal requirements placed on them, and the expected time required to fulfill their duties.

The members of the Board of Directors are remunerated for their service during their term of office (from one AGM to the next AGM). The cash compensation is paid in quarterly installments for the members of the Board of Directors. The RSUs are granted once a year. The expense lump-sum is typically paid out in December.

The number of RSUs is determined by dividing the fixed grant value by the volume-weighted average share price of the last three weeks prior to the grant date (“grant reference price”).

One-third of the RSUs vest each year, over a period of three years. Notwithstanding the above, if an individual ceases to be a member of the Board, the company has the right to withhold a number of Shares corresponding to an amount sufficient to cover any withholding liabilities arising from the vesting of RSUs on behalf of the individual. For the avoidance of doubt, this includes, without limitation, sell-to-cover and withhold-to-cover processes.

The following table summarizes the awarded RSUs and the corresponding grant reference price and the corresponding vesting schedule of the awarded RSUs:

RSUs for the Board of Directors