Full Press Release Details
The Company processes personal data as a data controller in accordance with the provisions of the General Data Protection Regulation ( GDPR ) and all other applicable laws. Details on the processing of personal data and the rights of shareholders and/or their proxies under the GDPR can be found on the Company's website at: www.freseniusmedicalcare.com/en/agm Hof (Saale), March 2024 Fresenius Medical Care AG The Management Board
Data protection information for shareholders and their proxies When shareholders register for the Annual General Meeting and exercise their shareholder rights in relation to the Annual General Meeting or issue a proxy author-ization, the Company collects personal data about the shareholders and/or their proxies in order to enable the shareholders and their proxies to exercise their rights in relation to the Annual General Meeting.
Voting instructions must be received by The Bank of New York Mellon by no later than 9 May 2024 prior to 12:00 hours (EDT) (UTC = EDT plus four hours). Persons whose ADR are held by a bank, a broker or another intermediary may be required to provide their voting instructions through their intermediaries, who will in turn forward such instructions to the depos-itary bank. 11.
Notice to the holders of American Depositary Receipts (ADR) regarding the Annual General Meeting Holders of ADR will generally submit voting instructions to The Bank of New York Mellon, in its capacity as the depositary bank, with respect to the shares represented by their ADRs. The Bank of New York Mellon will distribute to ADR holders (a) a notice informing ADR holders of the electronic availability of the invitation to the An-nual General Meeting and the agenda, as well as the materials referred to in the agenda, and (b) a voting instruction form.
In this case, unrestricted access to the live broadcast will be made available via the website: www.freseniusmedicalcare.com/en/agm 9. Time specifications in this invitation The time specifications in this invitation refer to the Central European Summer Time (CEST) unless explicitly stated otherwise. With regard to the Coordinated Universal Time (UTC) this translates to UTC = CEST minus two hours. 10.
In addition, it is intended to publish the speech of the chairwoman of the Manage-ment Board on the aforementioned website of the Company prior to the Annual Gen-eral Meeting. The voting results will also be published on the aforementioned website of the Com-pany after the Annual General Meeting. 8. Audio and visual broadcast The chairperson of the meeting is expected to arrange that all shareholders of the Company and interested members of the public can follow the introductory 42137067 Page 97 statement of the chairperson of the meeting and the speech of the chairwoman of the Management Board live on the internet in video and audio from 10:00 hours (CEST) on the day of the Annual General Meeting.
These documents to be made available will also be available for inspection by the shareholders at the Annual General Meeting. These documents will also be availa-ble for inspection by the shareholders at the offices of the Company, Fresenius Med-ical Care AG, Else-Kr ner-Stra e 1, 61352 Bad Homburg v. d. H he, Germany, from the date of the convening of the Annual General Meeting.
Information on the Company's website This invitation to the Annual General Meeting, the documents to be made available to the Annual General Meeting and further information in connection with the Annual General Meeting pursuant to sec. 124a AktG can be accessed via the website of the Company at www.freseniusmedicalcare.com/en/agm as of the convening of the Annual General Meeting.
This applies only to the extent that the information is necessary for a proper evaluation of an item on the agenda. The Management Board may refuse to provide information on the grounds listed in sec. 131 (3) sentence 1 AktG. Pursuant to sec. 131 (2) sentence 2 AktG in conjunction with Article 18 (2) sen-tence 2 of the Articles of Association of the Company, the chairperson of the meeting is entitled to reasonably limit the shareholders' speaking time and the time to ask questions at the beginning or during the Annual General Meeting, insofar as this is permitted by law. d) Further information on the rights of the shareholders Further explanations of the shareholders' rights under sec. 122 (2) AktG, sec. 126 (1) AktG, sec. 127 AktG and sec. 131 (1) AktG are available on the Com-pany's website at www.freseniusmedicalcare.com/en/agm. 7.
In addition, the Management Board is not obligated to publish an election proposal pursuant to sec. 127 sentence 3 AktG if such election proposal fails to contain the information required by sec. 124 (3) sentence 4 AktG and sec. 125 (1) sentence 5 AktG. c) Right to information pursuant to sec. 131 (1) AktG 42137067 Page 96 Upon request pursuant to sec. 131 (1) AktG, each shareholder shall in the Annual General Meeting be provided with information on the affairs of the Company by the Management Board including the legal and business relationships of the Company with affiliated companies and about the situation of the group and the companies included in the consolidated financial statements.
A countermotion and any reasons given do not need to be made accessible under the prerequisites of sec. 126 (2) sentence 1 AktG. Pursuant to sec. 126 (2) sen-tence 2 AktG, any reasons for a countermotion also do not need to be made availa-ble if they amount to more than 5,000 characters in total. Sec. 126 AktG applies mutatis mutandis to election proposals of a shareholder pursuant to sec. 127 AktG.
Any comments of the management of the Company on countermotions or election proposals will also be published under the aforementioned website. Countermotions and election proposals must be sent exclusively to one of the fol-lowing contact options: Fresenius Medical Care AG Investor Relations Else-Kr ner-Stra e 1 61352 Bad Homburg v.d. H he Germany or by e-mail: hauptversammlung@freseniusmedicalcare.com Countermotions or election proposals addressed elsewhere will not be considered.
Countermo-tions and election proposals to be made available which are received by the Com-pany at least 14 days before the Annual General Meeting, not including the day of receipt and the day of the Annual General Meeting, i.e., no later than 1 May 2024, 24:00 hours (CEST), using one of the contact options below, will be made available to the other shareholders, including the name of the shareholder and any reasons, on the Company's website at www.freseniusmedicalcare.com/en/agm.
In addition, such requests are made accessible to shareholders on the Company's website at www.freseniusmedicalcare.com/en/agm without undue delay and communicated pursuant to sec. 125 (1) sentence 3 AktG. b) Motions and election proposals by shareholders according to sec. 126 (1), sec. 127 AktG Prior to the Annual General Meeting shareholders may submit countermotions re-garding proposals made by the Management Board and/or the Supervisory Board on specific agenda items as well as election proposals to the Company.
We ask shareholders to submit any supplemental requests to the following address: Fresenius Medical Care AG Vorstand Else-Kr ner-Stra e 1 42137067 Page 95 61352 Bad Homburg v.d. H he Germany Unless made public with the invitation of the Annual General Meeting, supplements to the agenda that are required to be published are published without undue delay upon receipt of the supplemental request in the German Federal Gazette (Bun-desanzeiger).
Applicants must provide evidence that they have held the minimum quantity of shares for at least 90 days prior to the day of the receipt of the supplemental request by the Company and that they hold the shares until the decision of the Management Board on the supplemental request (sec. 122 (2), (1) sentence 3 AktG). When cal-culating the shareholding period, sec. 70 AktG must be observed.
For each new item, reasons or a draft resolution must be attached. Supplemental requests must be received by the Company at least 30 days prior to the Annual General Meeting in writing; the day of receipt and the day of the Annual General Meeting are not included in that calculation. Therefore, the last possible date for receipt is 15 April 2024, 24:00 hours (CEST).
Information on shareholders' rights pursuant to sec. 122 (2), sec. 126 (1), sec. 127, sec. 131 (1) AktG a) Supplements to the agenda at the request of a minority according to sec. 122 (2) AktG Shareholders whose total combined shares amount to the twentieth part of the share capital or the proportionate amount of the share capital of EUR 500,000.00 (that is equivalent to 500,000 non-par value shares), can request, according to sec. 122 (2) AktG, that items be placed on the agenda and be published.
Shareholders who have properly registered and properly provided evidence of their shareholding can access this password-protected Shareholder Portal on the Company's website at: www.freseniusmedicalcare.com/en/agm Further information and deadlines for using the Shareholder Portal can also be found there. Access to the password-protected Shareholder Portal requires the entry of access data, which will be sent to shareholders or their proxies with the admission ticket after proper registration and provision of evidence of shareholding. 6.
Electronic transmission of proxy authorization and instructions, revocation of proxy authorizations and proof of authorization (Shareholder Portal) Proxy authorizations and instructions, the revocation of proxy authorizations and proof of authorization can until 15 May 2024, 24:00 hours (CEST) subject to tech-nical availability also be transmitted electronically to the Company via an internet-based authorization and instruction system ( Shareholder Portal ).
Registration and evidence of shareholding in due form and in a timely manner in accordance with the provisions stated above are also required in case a proxy au-thorization is granted to the proxies appointed by the Company (see Section III.2, 42137067 Page 94 Requirements for the participation in the Annual General Meeting and the exercise of voting rights ). 5.
If the Company receives divergent declarations in connection with the granting and revocation of a proxy authorization or instructions by different means of transmission and if the Company cannot identify which of these declarations was made last, these declarations shall be treated as binding in the following order of transmission: (1) au-thorization and instruction system for the Annual General Meeting (Shareholder Por-tal), (2) e-mail and (3) paper form.
This does not preclude the possibility to grant proxy authorization to the proxies ap-pointed by the Company and to give them instructions at the Annual General Meet-ing until the beginning of voting. The authorization of proxies appointed by the Company does not preclude a per-sonal participation in the Annual General Meeting. If a shareholder wishes to partic-ipate and exercise his or her shareholders' rights in person or via another proxy despite having already authorized the proxies appointed by the Company prior to the Annual General Meeting, participation in person or via such other proxy is deemed a revocation of the proxy authorization granted to the proxies appointed by the Company.
In this case, proxy authorization and voting instructions must be received by the Company for organizational reasons by 15 May 2024, 24:00 hours (CEST) at one of the following contact options: Fresenius Medical Care AG c/o Computershare Operations Center 80249 Munich Germany or by e-mail: anmeldestelle@computershare.de The submission may also be made via electronic communication using the pass-word-protected authorization and instruction system (Shareholder Portal) in accord-ance with the explanations under Section III.5.
After registration has been completed, the Company will provide a form together with the admission ticket that can be used to grant proxy authorization and issue instruc-tions. A corresponding form for granting proxy authorization and issuing instructions can also be downloaded from the Company's website at: www.freseniusmedicalcare.com/en/agm Proxy authorization including voting instructions for the proxies appointed by the Company may already be submitted to the Company prior to the Annual General Meeting.
If an individual vote is to be taken on an agenda item without this having been communicated in advance of the Annual General Meeting, an instruction on this agenda item as a whole shall also be deemed to be a corre-sponding instruction for each item of the individual vote. The proxies appointed by the Company will not accept any instructions to speak, ask questions, propose mo-tions, submit election proposals or make statements for the record, either in the run- 42137067 Page 93 up to the Annual General Meeting or during the Annual General Meeting, nor will they exercise any other shareholder rights.
These proxies appointed by the Company must be granted proxy authorization in text form as well as express instructions for the exercise of voting rights. They will not exercise the voting rights at their own discretion but exclusively on the basis of the instructions given by the shareholder. If no explicit and unambiguous instructions have been given, the proxies appointed by the Company will abstain from voting on the relevant agenda items.
Voting procedure for proxies appointed by the Company and bound by in-structions given to them The Company offers its shareholders or their proxies the opportunity to be repre-sented by proxies appointed by the Company and bound by instructions. The proxies appointed by the Company are employees of the Company or of an affiliated com-pany of the Company who vote on the individual agenda items in accordance with the instructions given to them based on authorizations by shareholders or their prox-ies.
Registration and evidence of shareholding in due form and in a timely manner in accordance with the above provisions are also required in case a proxy authorization is granted (see Section III.2, Requirements for the participation in the Annual Gen-eral Meeting and the exercise of voting rights ). This does not preclude the granting of a proxy authorization after registration and providing evidence of shareholding. 4.
A corresponding form for granting proxy authorization can also be downloaded from the Company's website at www.freseniusmedicalcare.com/en/agm. If the Company receives divergent declarations in connection with the granting and revocation of a proxy authorization by different means of transmission and if the Company cannot identify which of these declarations was made last, these declara-tions shall be treated as binding in the following order of transmission: (1) authoriza-tion and instruction system for the Annual General Meeting (Shareholder Portal), (2) e-mail and (3) paper form.
This does not affect the possibility of granting proxy authorization to a third party at the Annual General Meeting on site. In order to allow a clear allocation of the proxy authorization, please state the full name or company, place of residence or business address, and admission ticket number of the shareholder. After registration has been completed, the Company will provide a form that can be used to grant proxy authorization together with the admission ticket.
The proxy authorization may be granted to the proxy or granted or proven to the Company. The proof of the authorization of a proxy may either be presented at the entrance to the meeting venue of the Annual General Meeting on the day of the Annual General Meeting or be submitted to the Company in advance to one of the following contact options: Fresenius Medical Care AG c/o Computershare Operations Center 80249 Munich Germany or by e-mail: anmeldestelle@computershare.de In case the proxy authorization or the proof of the authorization of a proxy is submit-ted to the Company in advance to the postal address or e-mail address stated above, we may for organizational reasons ask for a corresponding submission by 15 May 2024, 24:00 hours (CEST). 42137067 Page 92 The submission may also be made via electronic communication using the pass-word-protected authorization and instruction system (Shareholder Portal) in accord-ance with the explanations under Section III.5.
The text form requirement does not apply to the authorization of intermediaries as defined by sec. 67a (4) AktG, associations of shareholders, proxy advisors or other persons as defined by sec. 135 (8) AktG; intermediaries as defined by sec. 67a (4) AktG, associations of shareholders, proxy advisors or other persons as defined by sec. 135 (8) AktG, insofar as proxy author-ization shall be granted to them, may require different procedures, which need to be obtained from them in each case.
If the shareholder authorizes more than one person, the Company may reject one or more of these. For the authoriza-tion of the voting proxies appointed by the Company who are bound by instructions, the special features described under Section III.4 apply. The granting of proxy authorization, its revocation and the proof of authorization vis- -vis the Company must be in text form.
However, the Record Date has no relevance for dividend entitlement because this is solely linked to the shareholder status on the date of the resolution on the allocation of distributable profit by the Annual General Meeting. 3. Proxy voting procedure Shareholders may also have their rights in connection with the Annual General Meet-ing exercised by a proxy, e.g., an intermediary, an association of shareholders, a proxy advisor or another person of their choice.
This also applies accordingly to the acquisition of shares after the Record Date. Persons who do not yet hold shares on the Record Date and become shareholders only thereafter are entitled to participate in the Annual General Meeting and exercise voting rights for the shares held by them only to the extent that they are authorized by proxy or oth-erwise authorized to exercise rights.
The right of participation in the Annual General Meeting and the extent of the voting rights are solely determined by the shareholding on the Record Date. The Record Date is not accompanied by a lock on the sale of shares, i.e., shareholders may dispose of their shares even after 42137067 Page 91 registration. Even a full or partial sale of the shareholding after the Record Date does not affect the right to participate and the extent of the voting rights.
To ensure the timely receipt of the admis-sion tickets, we ask shareholders, in their own interest, to contact their depositary institution as early as possible to ensure an early registration and a timely receipt of the admission ticket. As regards the participation in the Annual General Meeting and the exercise of voting rights, only those who have duly provided evidence of shareholding are considered shareholders in relation to the Company.
Most depositary institutions will ensure that admission tickets are received in good time, provided that shareholders complete the admission ticket order forms sent to them by their depositary institution and return them to their depositary insti-tution in good time for the latter to be able to register and provide evidence of share-holding for the shareholder in good time.
Admission tickets to participate in the Annual General Meeting will be sent to eligible shareholders after the receipt of their registration and evidence of shareholding in due form and in a timely manner using one of the aforementioned contact options. Unlike the registration for the Annual General Meeting and the evidence of share-holding, the admission tickets merely serve as organizational aids and are not re-quired in order to participate in the Annual General Meeting or to exercise voting rights.
Evidence pursuant to sec. 67c (3) AktG is sufficient. The evidence of entitlement must unlike in previous years relate to the close of business on the 22nd day prior to the Annual General Meeting, i.e., 24 April 2024, 24:00 hours (CEST) ( Record Date ). This is due to the fact that the legislator has amended the provisions of the German Stock Corporation Act on the record date in sec. 123 (4) sentence 2 AktG through the German Act on financing of future-proof investments (Future Financing Act; Zukunftsfinanzierungsgesetz) (see also agenda item 11 under which the alignment of the Articles of Association to the wording of sec. 123 (4) sentence 2 AktG as amended by the Future Financing Act is proposed).
Therefore, there are 293,413,449 voting rights at the time of the convening of the Annual General Meeting. 2. Requirements for the participation in the Annual General Meeting and the ex-ercise of voting rights Only those shareholders are entitled to participate in the Annual General Meeting and to exercise their voting rights who have registered with the Company in text form 42137067 Page 90 in German or English by no later than the end of 9 May 2024, 24:00 hours (CEST) using one of the contact options below and have provided the Company with evi-dence of their entitlement to participate in the Annual General Meeting and to exer-cise their voting rights: Fresenius Medical Care AG c/o Computershare Operations Center 80249 Munich Germany or by e-mail: anmeldestelle@computershare.de As evidence of their entitlement to attend the Annual General Meeting and to exer-cise their voting rights, shareholders must, by the end of 9 May 2024, 24:00 hours (CEST) at the latest, provide evidence of their shareholding issued by the ultimate intermediary, usually their depositary institution, in text form in German or English to one of the aforementioned contact options.
Total number of shares and voting rights At the time of the convening of the Annual General Meeting, the share capital of the Company is composed of 293,413,449 non-par value shares and consists solely of bearer shares, having one vote per share. The Company does not hold any treasury shares at the time of the convening of the Annual General Meeting.
In accordance with Article 14 (7) of the Articles of Association, the members of the Supervisory Board shall be covered by insurance against pecuniary damage, taken out by and in the interest of the Company in an appropriate amount for corporate bodies and certain executives. The insurance premiums shall be borne by the Com-pany. III. Further information and notes regarding the convening 1.
This applies accordingly if members of the Supervisory Board hold their office in the Supervisory Board or in a committee of the Supervisory Board or hold the office of chairperson or deputy chairperson only during part of a full fiscal year. d) Reimbursement of expenses and insurance cover In accordance with Article 14 (6) of the Articles of Association, the members of the Supervisory Board are reimbursed for the expenses incurred in the exercise of their office, including any statutory value-added tax owed by them.
(3) Due date; pro rata payment The aforementioned remuneration for serving on the Supervisory Board and its com-mittees is payable in four equal instalments at the end of each calendar quarter in accordance with Article 14 (5) of the Articles of Association. There are no deferral periods for the payment of remuneration components. If a fiscal year is not a complete calendar year, the remuneration relating to a full fiscal year shall be paid on a pro rata temporis basis in accordance with Article 14 (4) of the Articles of Association.
The ad-ditional remuneration for serving as deputy chairperson of a committee in the amount of one and a half times the applicable remuneration for the members of the respec-tive committee shall be cancelled in line with standard market practice with effect as of 1 July 2024, because only in exceptional cases the function of deputy chairperson is associated with a considerable higher time commitment.
In line with standard market practice, no additional remuneration shall be paid for serving on the Mediation Com-mittee. In view of his or her additional duties and the corresponding higher time commitment, the chairperson of each committee shall as it is currently the case receive twice 42137067 Page 89 the applicable remuneration for the members of the respective committee.
The members of the Audit Committee and the Presiding Committee shall, in view of the extensive und complex tasks of these committees and the corresponding higher time commitment, each receive EUR 55,000.00 per year for their work on each of these committees. For serving as a member of each the Compensation Committee and the Nomination Committee, the amount of the remuneration shall in each case be EUR 40,000.00 per year; the same shall apply to any other committees which the Supervisory Board may choose to establish in the future.
According to the proposed provision which shall apply as of 1 July 2024, a distinction shall be made, with regard to the amount of the remuneration, between the various committees in order to take greater account of the different tasks of the individual committees and their different meeting frequencies. This also reflects the fact that the Supervisory Board established, and was required to establish pursuant to appli-cable law, certain committees for the first time in the course of the change of legal form of the Company from a partnership limited by shares to a stock corporation which became effective last year on 30 November 2023.
(2) Remuneration for serving on committees of the Supervisory Board According to the current provision in Article 14 (3) of the Articles of Association, the members of a committee of the Supervisory Board, irrespective of its duties, receive an additional annual remuneration of USD 40,000.00. The chairperson and deputy chairperson of a committee receive twice and one and a half times of this committee remuneration, respectively.
According to the current provision, the chairperson of the Supervisory Board re-ceives additional remuneration of USD 160,000.00 and the deputy chairperson of the Supervisory Board receives additional remuneration of USD 80,000.00 (Arti-cle 14 (2) of the Articles of Association). In the future, the chairperson of the Super-visory Board and his or her deputy shall receive an additional remuneration of EUR 170,000.00 or EUR 85,000.00, respectively, and thus, in view of their additional duties and the corresponding higher time commitment, receive as it is currently the case twice and one and a half times the fixed remuneration, respectively.
Pursuant to the proposed provision which shall apply as of 1 July 2024, the fixed remuneration for each member of the Supervisory Board shall amount to EUR 170,000.00 per year. The associated moderate increase of the fixed remuneration appropriately reflects the further increase in the complexity of the re-sponsibilities of the Supervisory Board as well as the development of inflation in recent years since the last resolution on the remuneration of the members of the Supervisory Board in 2020.
At the same time, the currency of the remuneration shall be changed from US dollars (USD) to euros (EUR) in line with standard practice in German companies. (1) Remuneration for the membership in the Supervisory Board 42137067 Page 88 The fixed remuneration for each member of the Supervisory Board amounts to USD 160,000.00 per year pursuant to the current provision in Article 14 (1) of the Articles of Association.
The amendments to the remuneration of the members of the Supervisory Board pro-posed to the Annual General Meeting of the Company under agenda item 10 will each take effect upon registration of the corresponding amendment to the Articles of Association with the commercial register and shall each apply with effect as of 1 July 2024. c) Remuneration of the members of the Supervisory Board The remuneration of the members of the Supervisory Board shall be amended in order to appropriately take into account the further increased demands regarding the responsibilities of the Supervisory Board and certain committees of the Supervisory Board, the corresponding increased time commitment as well as the current market practice, while at the same time ensuring that the Company can continue to compete successfully for qualified candidates for the Supervisory Board in the future.
The remuneration and employment conditions of employees are not taken into account when determining the remuneration for members of the Supervisory Board, as Su-pervisory Board remuneration is granted for activities that due to their advisory and supervisory function are fundamentally different from those of employees. Potential conflicts of interest with respect to the review of the remuneration system for the members of the Supervisory Board are counteracted by the statutory provi-sions regarding competence, since the decision-making authority on the Supervisory Board remuneration is assigned to the General Meeting and a proposal for this res-olution is submitted to it by both the Management Board and the Supervisory Board, meaning that a system of mutual control is already provided for in the statutory reg-ulations.
In particular, the time commitment and scope of the duties of the Supervisory Board members as well as the financial situation of the Company are taken into account in the context of this review. Furthermore, the com-patibility of the remuneration with any statutory requirements, the recommendations of the German Corporate Governance Code and the expectations of the capital mar-ket as well as the market appropriateness of the remuneration are reviewed.
Prior to submitting the proposal to the General Meeting, the Management Board and the Supervisory Board review whether the remuneration of the members of the Su-pervisory Board in terms of its amount and structure continues to be in the interests of the Company and is appropriate in relation to the tasks of the Supervisory Board and the situation of the Company, whereby external remuneration consultants may also be consulted if necessary.
If the resolution is intended to amend the remuneration, this resolution re-quires a simultaneous amendment of the corresponding provisions of the Articles of 42137067 Page 87 Association; according to the current provisions of the Articles of Association, this requires a majority of three quarters of the share capital represented when the res-olution is passed.
If the Management Board and the Supervisory Board do not propose any changes to the remuneration of the Supervisory Board to the Annual General Meeting and the resolution therefore only concerns the confirmation of the remuneration of the mem-bers of the Supervisory Board, a simple majority of the votes cast is sufficient to pass the resolution. If a confirming resolution is not passed, a revised remuneration sys-tem must be presented for resolution at the latest at the following Annual General Meeting.
The members of the Supervisory Board do not receive any variable, performance-related remuneration. This takes into account the function of the Supervisory Board as an independent advisory and supervisory body. Also, there is no attendance fee for the participation in meetings of the Supervisory Board or its committees. (3) No remuneration-related legal transactions No remuneration-related legal transactions (such as agreements on pensions) within the meaning of sec. 87a (1) sentence 2 no. 8 AktG have been or will be concluded with the members of the Supervisory Board. b) Procedure for defining, reviewing and implementing the remuneration system for the members of the Supervisory Board Pursuant to sec. 113 (3) sentence 1 AktG, the General Meeting passes a resolution on the remuneration of the members of the Supervisory Board based on a proposal of the Management Board and the Supervisory Board at least every four years.
Thus, an appropriate remuneration of the members of the Supervisory Board contributes to the promotion of the Company's business strategy and long-term development. (2) No variable, performance-related remuneration; no attendance fee In accordance with a suggestion of the German Corporate Governance Code, the remuneration of the members of the Supervisory Board of the Company consists exclusively of a fixed remuneration.
In view of these tasks which carry a high degree of responsibility, the members of the Supervisory Board shall receive an ap-propriate remuneration which also takes into account the time required for the Su-pervisory Board office. In addition, Supervisory Board remuneration that is also ap-propriate with regard to the market environment ensures that the Company will con-tinue to have qualified candidates for the Supervisory Board in the future.
It is involved in the determination of the strategy and the planning as well as in all matters of fundamental importance to the Com-pany. Particularly relevant decisions by the Management Board require the Super-visory Board s approval. In particular, the Supervisory Board is responsible for ap-pointing and dismissing members of the Management Board, defining a compensa-tion system for the members of the Management Board and for resolving on the compensation of the Management Board.
Annex to agenda item 10: Remuneration system for the members of the Su-pervisory Board (Convenience Translation) a) Principles of remuneration of the members of the Supervisory Board (1) Contribution of the remuneration to the promotion of the business strategy and long-term development 42137067 Page 86 The Supervisory Board of the Company advises and monitors the management of the Company by the Management Board and performs the tasks assigned to it by law and the Articles of Association.
If the incentive effect of the Management Board compensation cannot be adequately restored by adjusting the existing compensation components, the Supervisory Board also may temporarily award additional compensation components or replace individ-ual compensation components with other compensation components in the event of extraordinary developments, subject to the same conditions as mentioned above. 3.
A temporary deviation from the Compensation System 2024+ is possible in relation to the following components: base salary, performance targets and the rules for set-ting targets for Short-Term and Long-Term Incentives, rules for calculating target achievement and payment dates, ranges of possible target achievement for the in-dividual components of variable compensation and compensation structure, includ-ing the relationship between the individual compensation components.
Unfavorable market developments are not considered special and extraordinary circumstances allowing for a deviation from the Compensation System 2024+. Even in the event of a deviation, the compensation must continue to be geared to-ward the long-term and sustainable development of the Company and reflect the performance of the Management Board. Any deviation from the Compensation System 2024+ under the circumstances re-ferred to above will only be made following a detailed examination of the specific circumstances and alternative courses of action and on the basis of a proposal by the Compensation Committee by adopting a Supervisory Board resolution to this effect, and would be disclosed in the compensation report for the relevant fiscal year.
Any payments under a post-employment non-compete covenant are to be offset against any sev-erance payments. The service agreements of the Management Board members do not contain any commitments that are triggered by a change of control. 6 Compensation System in the Event of Special and Extraordi-nary Circumstances In special and extraordinary circumstances (such as a severe financial or economic crisis), the Supervisory Board may temporarily deviate from the Compensation Sys-tem 2024+ in accordance with Section 87a(2), second sentence of the German Stock Corporation Act if this is necessary in the interests of the Company's long-term well-being.
If there is good cause for the termination of the service agreement, no severance payments will be made. The Supervisory Board may agree a post-employment non-compete covenant (na-chvertragliches Wettbewerbsverbot) for a period of up to two (2) years with Manage-ment Board members. If such post-employment non-compete covenant becomes applicable, the Management Board members may receive compensation for non-competition amounting to up to half of their respective base salary for each year 42137067 Page 85 during which the post-employment non-compete covenant applies.
The service agreements of the Management Board members contain a severance payment cap. Under such severance payment cap, payments in connection with early termination of a Management Board appointment may not exceed the value of two (2) years' compensation and may not compensate more than the remaining term of the respective service agreement. When calculating the respective annual com-pensation, only non-performance-based compensation components may be applied.
Any payment of variable compensation components will in principle be made in accordance with the targets and comparison parameters as well as the due dates or any holding periods stipu-lated in the plan terms as agreed to or referenced in the service agreements with the Management Board members. The Supervisory Board may also determine rules re-garding compensation for each compensation component in accordance with the above provisions for situations involving a temporary revocation of appointment pur-suant to Section 84(3) of the German Stock Corporation Act.
This includes situations such as retirement or full or partial reduction in earning capacity, death, termination of the service agreement without good cause, termination of the service agreement for good cause, or revocation of the appointment for good cause. For any such situation the Supervisory Board may determine the requirements ap-plying to the payment or forfeiture of all or some compensation components, in full or in part, prematurely or deferred, to the Management Board member or, in case of death, to the heirs of the Management Board member.
When a Management Board member is appointed for the first time, the term of ap-pointment and term of the service agreement are generally no longer than three (3) years. If a member is reappointed, the period for each of the appointment and the extension of the service agreement is up to five (5) years. The Supervisory Board may determine leaver rules for any compensation compo-nent and for any situation in which the service relationship of a Management Board member or their appointment as a member of the Management Board ends.
Information on the applied performance targets, target values, adjustments and the respective performance target achievement will be disclosed ex post after the end of the performance period in the compensation report for the relevant fiscal year. 5 Compensation-Related Legal Transactions The service agreements of the Management Board members are entered into for the term of their appointment and extended for the term of each reappointment.
In this case, the Supervisory Board may increase or decrease the overall target achievement which has been calculated to reflect this. This also applies if capital adjustments (e.g., capital increases, spin-offs or stock splits) are carried out. If the Supervisory 42137067 Page 84 Board resolves to make use of this option, the rationale will be adequately explained and disclosed.
The Supervisory Board may make the payout in cash or settlement in shares dependent on further conditions, such as the continuation of the service re-lationship. When determining the degree of overall target achievement, the Supervisory Board in accordance with the corresponding recommendation of the GCGC has the option of appropriately taking into consideration extraordinary developments (including, but not limited to, certain extraordinary commercial, tax or similar impacts that are not related to the respective Management Board member's performance).
The average price to be applied relates to a period beginning before the respective vesting date and to be determined by the Supervisory Board. The payment in cash or settlement in shares is capped at 400% of the allocation amount, without prejudice to any reduc-tion that might be required in order to comply with the applicable Maximum Com-pensation.
The overall target achievement can range from 0% to 200% (cap). The same applies to the number of Performance Shares to vest. After the final number of Performance Shares to vest has been finally determined, it is multiplied by the average price of the shares in the Company in order to calculate a corresponding amount for payment in cash or settlement in shares of the final Performance Shares.
For this purpose, the target achievements for the three performance targets during the performance period will be determined and included in the calculation of the overall target achievement ac-cording to their weighting. Based on the overall target achievement, the final number of Performance Shares is determined for each Management Board member and may increase or decrease over the performance period compared to the number at the allocation.
An Actual CO2e Reduction of more than the value of CO2e emissions defined for the target achievement of 200% will not lead to a further increase in target achievement. The target achievement for the performance target Sustainability is calculated as the average of the respective target achievements in the three (3) fiscal years of the performance period. 42137067 Page 83 The target achievement curve for the sustainability target reduction in CO2e emis-sions is as follows for the 2024 allocation: At the end of the performance period, the Supervisory Board will determine the over-all target achievement for the Long-Term Incentive.
The Planned CO2e Reduction is oriented towards Fresenius Medical Care's expressed goal to reduce Scope-1 and Scope-2 emissions by 50% by 2030 compared to 2020 and to achieve climate neutrality by 2040. In addition to the Planned CO2e Reduction, the Supervi-sory Board will set values that lead to a target achievement of 50% and 200%. If the Actual CO2e Reduction is less than the value of the CO2e emissions set for the target achievement of 50%, the target achievement is 0%.
Notwithstanding the above, the target achievement of the performance target Relative TSR in the per-formance period is capped at 100% if the TSR for the Company for such perfor-mance period is negative. After determining the target achievement within the rele-vant comparison groups over the performance period, the target achievement for the performance target Relative TSR over the performance period is determined taking into account the weighting defined by the Supervisory Board for the respective com-parison groups. 42137067 Page 82 The target achievement curve for the performance target Relative TSR is as follows for the 2024 allocation: For the sustainability target reduction in CO2e emissions , the target achievement for a fiscal year is 100% if the reduction in CO2e emissions actually achieved in a fiscal year of the performance period, measured in tons of CO2 equivalents (CO2e) ( Actual CO2e Reduction ), corresponds to a percentage of CO2e emissions deter-mined by the Supervisory Board ( Planned CO2e Reduction ).
A positioning at or below the 30th percentile leads to a target achievement of 0% in the respective performance period. Positioning at or above the 75th percen-tile leads to a target achievement of 200% in the respective performance period. The Supervisory Board may adjust the values relevant for target achievement for tranches that have not yet been allocated; this applies in particular in the event of a change in the comparison groups relevant for the Relative TSR.
For this purpose, the TSR values of the peer companies within the respective comparison groups over the performance period are ranked and the relative positioning of the Company within the respective com-parison group is determined on the basis of the percentile achieved. The following applies within the respective comparison group: A 100% target achievement in the respective performance period is given if the TSR for the Company is at the 55th percentile.
If the actual average annual fig-ure falls below the planned average annual figure for the fiscal years of the relevant performance period by a value to be determined by the Supervisory Board, the target achievement is 0%. If the actual average annual figure exceeds the planned average annual figure for the fiscal years of the relevant performance period by a value to be determined by the Supervisory Board, the target achievement is 200%. 42137067 Page 81 The target achievement curve for the performance target ROIC is as follows for the 2024 allocation: The target achievement of the performance target Relative TSR is determined us-ing the percentile ranking method.
The target achievement for the performance target profitability (in general ROIC ) is determined on the basis of the average of the annual figures in the three (3) fiscal years of the relevant performance period. A 100% target achievement is given if the actual average annual figure corresponds to the planned average annual figure for the fiscal years of the relevant performance period.
The Supervisory Board may also set additional target val-ues that lead to a target achievement of between 0% and 200%. Target achievement in the range between two adjacent target values will be determined by linear inter-polation, unless the Supervisory Board has determined otherwise. When setting the target values, the Supervisory Board will consider, among other things, factors in-cluding the market and competitive environment, medium-term planning and strate-gic growth targets, shareholder interests and Fresenius Medical Care's sustainability strategy.
The Supervisory Board is also entitled to adjust the comparison groups for Relative TSR for good cause, such as a discon-tinuation of the relevant index. The achievement of the sustainability performance target is determined on the basis of adequate information. For example, the Non-Financial Group Reports (or any suc-cessor corporate sustainability reports) for the relevant fiscal years reviewed by the Supervisory Board and reviewed by an independent auditor are used to determine the target achievement of the reduction in CO2e emissions performance target ini-tially determined for the allocation in 2024. 4.3.3Performance Target-Setting and Determination of Target Achievement The Supervisory Board will define the target values of the underlying financial figures that lead to a target achievement of 0% (lower threshold), 100% and 200% (cap) for each performance target.
For the calculation of the Relative TSR for tranches not yet allocated, the Supervisory Board may determine one or more other comparison groups if it concludes that a comparison with one or more other groups appears more suitable (e.g., based on the correlation with the relevant index) for providing effective incentives for the Management Board members and taking ap-propriate account of shareholders' interests.
In general, STOXX Europe 600 Health Care and S&P 500 Health Care indices are determined as comparison groups. To compensate for possible share price fluctua-tions, the average closing price of the last 30 trading days in the XETRA trading system of Deutsche B rse AG in Frankfurt/Main or a comparable successor system 42137067 Page 80 before the beginning (January 1) and end (December 31) of the performance period is taken as the relevant share price.
These principles apply mutatis mutandis in the event that the Supervisory Board chooses to use ROCE as performance indicator to meas-ure profitability. The achievement of the Relative TSR is determined based on the percentile ranking of the TSR performance of the Company in comparison to the TSR performance of companies in one or more comparison groups determined by the Supervisory Board.
ROIC is calculated on the basis of the Company's approved consolidated financial statements for the fiscal years in question, with the proviso that the financial figures used to calculate ROIC can be adjusted for certain effects to ensure comparability of the financial figures with respect to the operational per-formance, e.g., effects from certain acquisitions and divestments and changes in IFRS accounting standards.
The performance targets have a weighting of 40% (profitability (in general ROIC)), 40% (Relative TSR) and 20% (sustainability) when determining the overall target achievement. ROIC is defined in accordance with the Company's approved consolidated financial statements for the fiscal year in question. In principle, ROIC is equivalent to the ratio between operating income after adjusted income tax to the average invested capital over a certain period.
The sustainable development of Fresenius Medical Care is given special consideration by incorporating a sustainability target. The Relative TSR performance target fo-cuses on a comparison with relevant competitors and thus ensures that the Long-Term Incentive provides effective incentives to take appropriate account of share-holders' interest in a positive capital markets performance of Fresenius Medical Care.
For future fiscal years, other sustainability targets (one or more, e.g., from the areas patients, employees, quality, innovation and environment) that are likewise also relevant for Fresenius Medical Care, con-sistent with its strategy, ambitious and transparently measurable can be selected instead of, or in addition to, the reduction in CO2e emissions. 42137067 Page 79 These performance targets have been chosen since they, with a view to the devel-opment of the enterprise value, reflect Fresenius Medical Care's strategic priorities of increasing profitability and capital efficiency, and have a long-term focus.
Sustainability is an essential and integral part of the corporate strategy of Frese-nius Medical Care. By considering key ESG objectives in the context of Long-Term Incentives, also investor-specific and social requirements are met and the long-term, sustainable development of Fresenius Medical Care is promoted. For the 2024 allocation of the Long-Term Incentive, the reduction in CO2e emissions was defined as the sustainability target.
Instead of ROIC, the Supervisory Board can also use return on capital employed ( ROCE ) to measure profitability for future fiscal years if it concludes that it ap-pears more suitable as a performance indicator for providing effective incentives for the Management Board members. Relative TSR addresses investor-specific requirements regarding the inclusion of measuring performance compared to relevant competitors, is in line with both national and international current common market practices and is a relevant in-dicator of Fresenius Medical Care's long-term capital markets performance.
The performance targets are (i) the profitability target (in general ROIC), (ii) the Relative TSR and (iii) a sustainability target: ROIC is a strategically relevant internal performance target and describes the profitability of invested capital. ROIC provides information on how efficiently the Company works with the available capital in the long term and how efficiently capital is used for investment projects.
The average share price will be the average share price over a period to be determined by the Supervisory Board prior to each allocation date. The number of Performance Shares to vest for each Man-agement Board member depends on the achievement of the performance targets. 4.3.2Performance Targets The Long-Term Incentive is measured based on the achievement of a financial per-formance target, a capital markets target and a non-financial performance target: The performance targets in the Long-Term Incentive are important performance in-dicators of the Company and support the implementation of the long-term strategy of the Company.