Compensation Report

Introductory note from the Chairman of the Nomination and Compensation Committee

Dear shareholders,

On behalf of the Nomination and Compensation Committee of Zehnder Group, I am pleased to present the 2024 Compensation Report.

In a year characterised by weak construction activity and declining sales, we implemented targeted cost reduction measures in response to the challenging market environment and lower sales volume.

At the same time, investments in strategic initiatives remained a priority. In light of the weak construction market environment in 2024, no adjustments were made to the compensation for the Board of Directors nor for the members of the Group Executive Committee. This decision was underlined by a compensation benchmark for the Group Executive Committee, where the peer group was aligned with the previous year’s benchmark for the Board of Directors and the analysis showed the current compensation to be within market range.

A milestone in Zehnder’s history is the appointment of the first Group Executive Committee member in North America, which emphasises the strategic importance of this market for Zehnder Group. After a thorough selection process, Valentina Videva Dufresne was appointed as President North America by the Board of Directors and will become a member of the Group Executive Committee on 1 January 2025. This brings the percentage of women in the Group Executive Committee to 33%.

Another responsibility of the Nomination and Compensation Committee is the annual performance management of the CEO and the other members of the Group Executive Committee. Respective performance targets and development measures were derived for each executive. In addition to annual compensation and performance reviews, the Nomination and Compensation Committee analysed feedback from shareholders on compensation programmes and their disclosure in the compensation report, preparation of the compensation report, and the compensation proposals for the Annual General Meeting in order to align with your interests. We noticed a demand for additional transparency on compensation matters and have taken corresponding actions.

Looking ahead, we will continue with the ESG-based performance indicators in the long-term incentive plan with a weighting of 30% and focus on CO₂e emission reduction and an increase in gender diversity at management level. A compensation benchmark for the Board of Directors is planned as part of the continuous review of our compensation programmes.

We would like to take this opportunity to thank you for your support over the past year and look forward to continuing our partnership on the basis of an open dialogue, transparency, and trust.

Yours sincerely,

Riet Cadonau

Chairman of the Nomination and Compensation Committee