2. Foreword by the Chair of the Nomination & Compensation Committee

Dear shareholders,

On behalf of the Nomination and Compensation Committee (NCC), I am pleased to present the 2023 Remuneration Report.

An extremely difficult year is behind us. Volumes were significantly lower due to the declining building construction industry in Europe and the high volume level in the prior year. Furthermore, the sanitary industry in some countries was negatively impacted by the shift in demand from sanitary to heating solutions. However, the global and regional supply chains eased somewhat in the reporting year. There was good availability of raw materials and components, and the delivery times were much shorter than in the previous year. Despite the very difficult market environment, operating margins were significantly higher compared to the previous year. This was primarily due to the high level of operational flexibility, especially in the plants and logistics, the significant fall in energy prices, and consistent price management. As a result, it was also possible to absorb most of the impacts of the Swiss franc, which was significantly stronger compared to most currencies. All in all, this bears witness to our structural and financial strength as well as the resilience of our business model. This enabled us to further consolidate our position as leading supplier of sanitary products and gain market shares.

The NCC performed its regular activities on remuneration matters throughout the year, such as the annual review of the remuneration programmes, the performance goal setting of the Group Executive Board at the beginning of the year and their performance assessment at year end, the determination of the remuneration of the members of the Board of Directors and the Group Executive Board, as well as the preparation of the Remuneration Report and of the say-on-pay votes at the Annual General Meeting.

Furthermore, the NCC refined the remuneration model for the Group Executive Board. Effective from 2023, the short-term incentive target and the long-term incentive allocation are expressed as a percentage of the Annual Base Salary, a change to the previous method where they were calculated as a percentage of the total target compensation. This adjustment aims to enhance the transparency and understanding of the remuneration model. Importantly, this change does not result in an increase in the total compensation level for individual members of the Group Executive Board. The NCC established that the remuneration design for the Group Executive Board is well aligned with the business strategy and shareholders’ interests. There were no changes to the remuneration programmes for the Group Executive Board for 2023.

There were no changes to the remuneration system of the Board of Directors in the reporting year. The remuneration system and the amount of remuneration for Geberit’s Board of Directors conform to standard market practice and the Board of Directors confirmed that no changes were necessary.

At the 2024 Annual General Meeting, we will request your approval of the total remuneration amount to be awarded to the Board of Directors for the period until the following Annual General Meeting, and the maximum aggregate remuneration awarded to the Group Executive Board for the 2025 business year. Additionally, you will have the opportunity to express your opinion on this Remuneration Report in a consultative vote. You will see in the report that the remuneration awarded to the Board of Directors for the remuneration period ending with the 2024 Annual General Meeting and the remuneration awarded to the Group Executive Board in 2023 were within the limits approved at the 2023 Annual General Meeting and 2022 Annual General Meeting respectively.

Looking ahead, we will continue to assess and review our remuneration programmes to ensure that they continue to fulfil their purpose in the evolving context in which the company operates. We will pursue an open and regular dialogue with our shareholders as we continue to enhance the remuneration system.

This report contains all relevant information on the remuneration paid to the Board of Directors and to the Group Executive Board in 2023. Our remuneration system rewards performance in a balanced and sustainable manner and aligns well with shareholders’ interests.

The NCC appreciates your ongoing input and feedback on our remuneration programmes. We look forward to the AGM in April 2024.

Yours sincerely,

Eunice Zehnder-Lai
Chair of the Nomination & Compensation Committee