Remuneration Board of Directors

Set-up of the remuneration of the Board of Directors

The Remuneration approach is designed to engage qualified independent directors who possess the right balance of personal skills, competencies, and experience required to execute the responsibilities and tasks assigned to the Board of Directors by law or by the Articles of Association. To ensure the Company provides a fair and competitive remuneration, regular benchmarks are conducted. As it is market practice to review the remuneration of the Board of Directors against practices in the country of domicile, the companies included in the Swiss Market Index (SMI) serve as the benchmark (excluding companies whose compensation levels are considered materially higher than the SMI companies). The fees set, are below the median of the reference group.

The remuneration consists of a Base Fee and Committee Fees. The fees aim to ensure that the Members of the Board of Directors utilize their skills and competences to the maximum extent possible and reflects the nature of responsibilities and the time spent. At his request, the Chair does not receive any fees concerning his participation in any of the Committees. To safeguard independence, fees are not linked to the achievement of any predefined individual or Company performance targets.

The fees for the Members of the Board of Directors, are set and paid in CHF. As of 18 April 2023, Base Fees and Committee Fees on annual basis are set as included in the below table.

To align the interests of the Members of the Board of Directors with other stakeholders, half of the Base Fee is awarded for in Restricted Share Units (RSUs) i.e., the right to receive a dsm-firmenich share at vesting. It is explicitly noted that RSUs are not tied to any individual or Company performance targets. The grant of RSUs is subject to the following guidelines:

• The number of RSUs to be granted will be calculated considering the average share price of the dsm-firmenich share over a reference period
• RSUs do not carry voting rights and do not provide eligibility for dividend payments
• Vesting and holding period: 3 years, starting at grant date
• The possibility to conduct a sell-to-cover transaction at vesting to settle taxes due at the respective moment in time
• Upon leaving the Board, all outstanding RSUs recorded as unvested at termination date shall vest, subject to a holding obligation of the vested shares of a minimum of one year

The Company pays employer contributions to social security systems in line with applicable laws in any relevant geography. These amounts are not included in the maximum amount for remuneration of the Board of Directors as approved by the General Meeting. Other than mandatory contributions to the company pension plan (‘second pillar’) applicable because of Swiss regulations, the fees are not pensionable.

No mandatory shareholding requirement applies for the Members of the Board of Directors. No loans will be provided to the Members of the Board of Directors.

Expenses incurred in fulfilling duties are reimbursed, to be paid upon submission of a statement of expenses.

Remuneration Board of Directors in 2023

Assignment to Committees

Ms. Sze Cotte-Tan joined the Board of Directors as of 1 May 2023, whereas the other Members were appointed with effect from 18 April 2023. During 2023, no further changes occurred in the composition of the Board of Directors. The Members of the Board of Directors are assigned to the various Committees.

Remuneration provided to the Members of the Board of Directors in 2023

Considering the decision that 50% of the Base Fee will be awarded for in cash and the remaining 50% in equity, the below table provides an overview of the total cash remuneration between 18 April to 31 December 2023 and the RSU grant.

The Company has not provided any loans to the Members of the Board of Directors, nor were payments made by subsidiaries of dsm-firmenich (except for payments to members of the Scientific Advisory Board, as included under ‘Other’). No payments have been made to persons closely connected to the Members of the Board of Directors (i.e., Associated Persons, defined as their spouse, their children under 18 years of age, legal entities owned or controlled by them, or any person acting as their fiduciary) (Audited).

Compensation voting

The General Meeting of Danube AG (renamed DSM-Firmenich AG) on 18 April 2023 approved a maximum total amount of remuneration for the Board of Directors of € 850,000 (CHF850,000 applying the Assumed Fx rate) for the period starting 18 April 2023 until 29 June 2023. In establishing the amounts, the Assumed Fx rate (EUR 1 = CHF1) was considered. The EGM of DSM-Firmenich AG on 29 June 2023 approved (97.18% in favor) a maximum total amount of remuneration for the Board of Directors of €3.6 million (CHF3.6 million based on Assumed Fx rate) for the period 29 June 2023 until the next AGM (7 May 2024). Since the underlying assumptions are the same, the two amounts are herein combined into one overall maximum total amount of remuneration for the Board of Directors of €4.45 million (CHF4.45 million) covering the period starting 18 April 2023 and ending 7 May 2024 (386 days). The approved amount was based on the following considerations:

• The amount does not include the company-related portion of social security contributions paid in line with applicable laws in any relevant geography
• Share price development and exchange rate fluctuations are not included
• Other than mandatory contributions to the company pension plan (‘second pillar’) applicable because of local Swiss regulations, the fees are not pensionable
• An amount of € 160,000 (CHF160,000) is included to cover the fees of the Members of the Board of Directors who also are a member of the Scientific Advisory Board
• An amount was included to cover for unforeseen circumstances as well as offset an appreciation of the share price on grant date compared to the reference (average price over August 2023) used to determine the number of RSUs

The below table provides an overview of the total maximum amount of remuneration as approved by the General Meeting for the period 18 April 2023 until 7 May 2024 and the actual remuneration (excluding social security contributions) awarded in 2023 and to be paid over the period 1 January 2024 until 7 May 2024, thereby considering the Average Fx rate that applied for 2023).

The total remuneration provided in 2023 to the Members of the Board of Directors amounted to €3,031,614 (excluding social security charges for the account of the Company). This includes the value of the RSU grant: €1,462,957 based on the face value (i.e., opening price) at the grant date. It is estimated that the total remuneration for the Board of Directors for the period 1 January 2024 until 7 May 2024 will amount to €737,461. Added to the remuneration provided in 2023, the total amount of €3,769,075 remains within the approved maximum amount. 

Shareholding

By the end of 2023, the Members of the Board of Directors, including Associated Persons, held 16,078,901 ordinary shares and 18,239 RSUs. The below table provides an overview, detailing:

• The number of Ordinary dsm-firmenich shares held by each individual member of the Board of Directors on 31 December 2023
• The number of outstanding RSUs held by each individual Member of the Board of Directors, granted in 2023