5. Remuneration Governance

Authority for decisions related to remuneration is governed by the Articles of Incorporation and the Organisational Regulations of the Board of Directors of Geberit AG.

• The prospective maximum aggregate amounts of remuneration of the members of the Board of Directors and of the Group Executive Board are subject to a binding shareholders’ vote at the Annual General Meeting.
• The Remuneration Report for the preceding period is subject to a consultative vote.

5.1 Nomination and Compensation Committee (NCC)

Pursuant to the Articles of Incorporation and the Organisational Regulations of Geberit AG (see also Articles of Incorporation), the NCC supports the Board of Directors (BoD) in the fulfilment of its duties and responsibilities in the area of remuneration and personnel policy, including:

• Establishment and periodical review of the Group’s remuneration policy and principles
• Pre-determine of annual expected short-term financial and ESG targets for the CEO and the other members of the Group Executive Board (GEB) and pre-definition of the annual performance target for the Long-Term Participation plan for the approval of the Board of Directors
• Yearly review of the individual remuneration of the CEO and of the other members of the Group Executive Board
• Yearly performance assessment of the CEO and of the other members of the Group Executive Board
• Preparation of the Remuneration Report
• Personnel development of the Group Executive Board
• Succession planning and nomination for positions on the Group Executive Board
• Pre-selection of candidates for election or re-election to the Board of Directors

Approval and authority levels on remuneration matters

The NCC meets at least three times per year and consists exclusively of independent and non-executive members of the Board of Directors who are elected annually by the shareholders at the Annual General Meeting. Since the 2021 Annual General Meeting, the NCC has consisted of Eunice Zehnder-Lai as Chair as well as Werner Karlen and Thomas Bachmann as members. In 2024, the NCC held three meetings covering the agenda items listed below. The participation rate for the NCC meetings was 100%.

As a general rule, the Chair of the Board of Directors, the CEO and the Head Corporate Human Resources participate in the meetings of the NCC. The Chair of the NCC may invite other executives as appropriate. However, the Chair of the Board of Directors and the executives do not take part in the sections of the meetings where their own performance and/or remuneration are discussed. At the end of each meeting, a closed session takes place among the members of the NCC only.

After each meeting, the Chair of the NCC reports to the Board of Directors on its activities and recommendations. The minutes of the NCC meetings are available to the full Board of Directors.

Role of external consultants

The NCC may decide to seek advice from external consultants from time to time for specific compensation matters. In 2024, Compensation Governance Services AG provided services related to executive compensation matters. In addition, internal compensation experts such as the Head Corporate Human Resources provided support and expertise.

5.2 Shareholder involvement

The shareholders are involved and have decision-making authority on various remuneration matters. They approve annually the maximum amounts of remuneration for the Board of Directors and for the Group Executive Board in separate votes, and they are asked annually for their opinion and feedback on our remuneration system in general via the consultative vote on the Remuneration Report. In addition, the remuneration principles are governed by the Articles of Incorporation, which have been approved by the shareholders.

5.3 Articles of Incorporation

As required by Swiss Company Law, the Articles of Incorporation of Geberit include the following provisions on remuneration:

• Principles applicable to performance-related pay (Article 21): The members of the Group Executive Board may be paid variable remuneration which may include short- and long-term elements and which is linked to the achievement of one or several performance criteria.
• Binding votes on maximum aggregate remuneration amounts of the Board of Directors and Group Executive Board (Article 22): Shareholders vote prospectively on the maximum aggregate remuneration amount for the Board of Directors until the next ordinary Annual General Meeting and for the maximum aggregate remuneration amount for the Group Executive Board for the following business year. Further, shareholders can express their opinion on the remuneration principles and structure through a consultative vote on the Remuneration Report.
• Additional amount for payments to members of the Group Executive Board appointed after the vote on remuneration at the Annual General Meeting (Article 23): For the remuneration of members of the Group Executive Board who have been appointed after the approval of the maximum aggregate remuneration amount by the Annual General Meeting, and to the extent that the maximum aggregate remuneration amount as approved does not suffice, an amount of up to 40% of the maximum aggregate remuneration amount approved for the Group Executive Board is available without further approval of the Annual General Meeting.
• Loans, credit facilities and post-employment benefits for members of the Board of Directors and the Group Executive Board (Article 26): No loans or credits shall be granted to members of the Board of Directors or the Group Executive Board.

The provisions of the Articles of Incorporation have been kept broad so that the Board of Directors has sufficient flexibility to make any necessary amendments to the remuneration programmes. The remuneration principles currently in place are more restrictive than the provisions of the Articles of Incorporation and are aligned with best practice in Corporate Governance; for example, the independent members of the Board of Directors are not eligible for any variable remuneration or retirement benefits (see also 6. Remuneration architecture for the Board of Directors).

5.4 Process of determination of remuneration

Benchmarking and comparative groups

Geberit reviews the remuneration of its executives, including that of the members of the Group Executive Board, every two to three years. This includes regular participation in benchmark studies on comparable functions in other industrial companies. The last benchmark analysis of the remuneration of the CEO and the other members of the Group Executive Board was conducted in 2023 by PricewaterhouseCoopers. The remuneration analysis was based on a comparative group composed of the following 15 industrial companies of similar scale in terms of market capitalisation, sales and net income, with headquarters in Switzerland: Barry Callebaut, Bucher Industries, Dormakaba, Georg Fischer, Givaudan, Holcim, Lonza, OC Oerlikon, Schindler, SFS Group, SGS, Sika, Sonova, Straumann and Sulzer. While many different factors, such as the individual role, experience in the role and contribution, company performance and affordability, are considered to determine remuneration levels, the policy of Geberit is to provide a target remuneration that is in principle positioned around the market median. The outcome of the benchmark analysis was considered for the 2024 compensation review and for the annual review of the remuneration programmes.

With regard to the remuneration of the Board of Directors, the system and amount are reviewed every two to three years by the NCC. This includes regular participation in comparative studies. In 2022, PricewaterhouseCoopers was mandated to provide a benchmark analysis of the compensation for the Board of Directors on the basis of a comparative group of 14 Swiss industrial companies traded on the SIX Swiss Exchange. The comparative group includes the following industrial companies with comparable market capitalisation, sales and employee numbers, with headquarters in Switzerland: Barry Callebaut, Bucher Industries, Dormakaba, Georg Fischer, Givaudan, Holcim, Lonza, OC Oerlikon, Schindler, SFS Group, Sika, Sonova, Straumann and Sulzer.

PricewaterhouseCoopers is the current auditing firm of Geberit, and there are clear rules in place to comply with the independence requirements of auditing firms which were consistently applied to this mandate.

Performance Management

The actual remuneration effectively paid out in a given year to the Group Executive Board members depends on the corporate results and on individual performance. The individual performance is assessed through the formal annual performance management process: company and individual performance objectives are approved at the beginning of the business year and achievement against those objectives is assessed after year end. The performance appraisal is the basis for the determination of the actual remuneration.

5.5 Remuneration principles

Principles of remuneration for the Board of Directors

The members of the Board of Directors receive fixed remuneration only in order to ensure their independence in exercising their supervisory duties. The remuneration is paid partially in cash and partially in blocked shares in order to closely align their remuneration with shareholders’ interests.

Principles of remuneration for the Group Executive Board

In order to ensure the company’s success and to maintain its position as market leader, it is crucial to attract, develop and retain the right talent. Geberit’s remuneration programmes are designed to support this fundamental objective and are based on the following principles:

• Remuneration is competitive with that of other companies with which Geberit competes for talents.
• Both company performance and individual contributions are recognised and rewarded.
• Remuneration programmes are balanced between rewarding short-term success and long-term value creation.
• Participation programmes foster the long-term commitment and mindset of executives and the alignment of their interests to those of the shareholders.
• Executives are protected against risks through appropriate pension and insurance programmes.