BB Biotech : Remuneration Report

Remuneration Report

Remuneration Report	75-81
Introduction	76
1. Responsibilities and authorities with respect to remuneration	76
2. Remuneration of the members of the Board of Directors	77
3.	Remuneration of related parties at non-market conditions (audited)	79
4.	Remuneration of former members of the corporate bodies (audited)	79
5.	Loans and credits to the members of the Board of Directors (audited)	79
6.	Contractual terms at retirement from BB Biotech AG	79
7. Management contracts	79
Report on the audit of the Remuneration report	80

76	BB Biotech Annual Report 2021 - Remuneration Report

Remuneration Report

This remuneration report for the fiscal year 2021 outlines the remuneration system as well as the remuneration of the members of the Board of Directors of BB Biotech AG. The content and scope of the information contained in this report is in accordance with the provisions of the Ordinance Against Excessive Compensation in Public Corporations (the Ordinance) and with the Directive on Information relating to Corporate Governance (DCG) of the SIX Swiss Exchange.

1. Responsibilities and authorities with respect to remuneration

1.1 Introductory remarks relating to the specific structure of BB Biotech AG as an investment company

The Board of Directors of BB Biotech AG has not made use of its competence to delegate the executive management of all or part of the Company's business pursuant to article 716b CO and therefore manages the business of the Company itself, to the extent it has not been delegated to Bellevue Asset Management AG as investment manager and administrator within the framework of the management contract. Accordingly, BB Biotech AG does not have an executive management pursuant to article 716b CO or the Ordinance.

For details, please refer to note 7.

1.2 Responsibilities and authorities with respect to the remuneration

The Remuneration and Nomination Committee is responsible for ensuring that the process relating to the determination of the remuneration is held on a fair and transparent basis and that such process is controlled effectively. The adopted remuneration process shall serve as a basis for an adequate decision with respect to services rendered as well as an appropriate incentive to the individual members of the Board of Directors, taking into account the long- term interests of the shareholders and the Company's success. In addition, the Remuneration and Nomination Committee assists the Board of Directors in determining the principles of the remuneration strategy of BB Biotech AG.

The Remuneration and Nomination Committee submits proposals to the Board of Directors for resolution in the following areas:

Amount and composition of the aggregate remuneration of the Board of Directors; Amount and composition of the remuneration of the Chairman of the Board of Directors; Amount and composition of the remuneration of the Vice-Chairman as well as the other members of the Board of Directors;

Amount and composition of the additional remuneration of the members of a Board of Directors Committee.

Furthermore, the Remuneration and Nomination Committee assists the Board of Directors in resolving on conclusion, termination, or amendment of contracts entered into with external asset managers and thus in particular on the amount of the compensation to be paid under the respective contracts.

77BB Biotech Annual Report 2021 - Remuneration Report

2. Remuneration of the members of the Board of Directors

2.1 Principles

The remuneration of the members of the Board of Directors is based on the scope of activity and responsibility of the individual members (Chairman of the Board of Directors, Vice- Chairman of the Board of Directors, member of the Board of Directors; involvement in committees: chairmanship of a committee, member of a committee).

The remuneration of the Board of Directors consists of the following elements:

Fixed remuneration (disbursement by cash compensation);

Social insurance contributions and duties.

The limitation to a fixed remuneration ensures that the focus of the Board of Directors lies on the long-term success of BB Biotech AG. Its amount takes account of the workload and responsibility of the individual members of the Board of Directors. Therefore, the remuneration of the Board of Directors has been separated from the compensation of the investment manager; thus, the Board of Directors does not have an incentive to take excessively high risks.

Upon request of the Remuneration and Nomination Committee, the entire Board of Directors resolves once a year on the amount of the remuneration of the members of the Board of Directors and the committees.

The Board of Directors had determined the fixed remuneration of its members (as a member of the Board of Directors or a committee) as follows:

	2021	2020
	in CHF	in CHF
Function/Responsibility
Chairman	360 000	360 000
Vice-Chairman	250 000	250 000
Members	625 000	562 500
Chairman of the Remuneration and Nomination Committee	15 000	15 000
Member of the Remuneration and Nomination Committee	12 500	10 000
Chairman of the Audit Committee	15 000	15 000
Member of the Audit Committee	10 000	10 000
	1 287 500	1 222 500

2.2 Remuneration of the individual members of the Board of Directors in the reporting year (audited)

In the reporting year 2021, the five members of the Board of Directors received a total remuneration of CHF 1 332 853 (2020: CHF 1 272 316). From this amount, CHF 1 287 500 (2020: CHF 1 222 500) have been paid in the form of a fixed remuneration for the work on the Board of Directors and on the committees of the Board of Directors. The social insurance contributions and the duties amounted to a total of CHF 45 353 (2020: CHF 49 816).

78BB Biotech Annual Report 2021 - Remuneration Report

The individual members of the Board of Directors were paid the following remuneration:

Fiscal year 2021

Name/Function	RNC1)	AC2)	Period	Fixed	Commit-	Social	Total
				remu-	tee remu-	insurance
				neration	neration	contributions
						and duties
Hunziker Erich, Chairman			01.01.2021 -	360 000	-	24 086	384 086
			31.12.2021
Meanwell Clive, Vice-Chairman	X	X	01.01.2021 -	250 000	25 000	-	275 000
			31.12.2021
Galbraith Susan, Member	X		01.01.2021 -	125 000	2 500	-	127 500
			02.07.2021
Krogsgaard Thomsen Mads, Member	X		01.01.2021 -	250 000	7 500	-	257 500
			31.12.2021
von Planta Thomas, Member	X	X	01.01.2021 -	250 000	17 500	21 267	288 767
			31.12.2021

1. RNC = Remuneration and Nomination Committee (Thomas von Planta until March 18, 2021, Susan Galbraith from March 18, 2021 until July 2, 2021, Mads Krogsgaard Thomsen from March 18, 2021)
2. AC = Audit Committee

Fiscal year 2020

Name/Function	RNC1)	AC2)	Period	Fixed	Commit-	Social	Total
				remu-	tee remu-	insurance
				neration	neration	contributions
						and duties
Hunziker Erich, Chairman			01.01.2020 -	360 000	-	23 995	383 995
			31.12.2020
Meanwell Clive, Vice-Chairman	X	X	01.01.2020 -	250 000	25 000	-	275 000
			31.12.2020
Galbraith Susan, Member			01.10.2020 -	62 500	-	-	62 500
			31.12.2020
Krogsgaard Thomsen Mads, Member			19.03.2020 -	187 500	-	-	187 500
			31.12.2020
Strein Klaus, Member	X		01.01.2020 -	62 500	2 500	4 251	69 251
			19.03.2020
von Planta Thomas, Member	X	X	01.01.2020 -	250 000	22 500	21 570	294 070
			31.12.2020

1. RNC = Remuneration and Nomination Committee (Klaus Strein until March 19, 2020, Thomas von Planta from March 19, 2020)
2. AC = Audit Committee

79BB Biotech Annual Report 2021 - Remuneration Report

3. Remuneration of related parties at non-market conditions (audited)

In the reporting year 2021, no remuneration which was not at arm's length terms was paid to related parties (2020: none).

4. Remuneration of former members of the corporate bodies (audited)

In the reporting year 2021, no remuneration was paid to former members of the corporate bodies (2020: none).

5. Loans and credits to the members of the Board of Directors (audited)

The articles of incorporation of BB Biotech AG do not provide that loans and credits may be granted to the members of the Board of Directors. Accordingly, no loans or credits which BB Biotech AG has granted to current or former members of the Board of Directors or to related parties were outstanding as of December 31, 2021 (December 31, 2020: none).

6. Contractual terms at retirement from

BB Biotech AG

No member of the Board of Directors has a contract with BB Biotech AG providing for a severance payment in the event of leaving BB Biotech AG.

7. Management contracts

On behalf of the Company, the Board of Directors has entered into a management contract with Bellevue Asset Management AG (investment manager). In this contract, the investment manager commits to carry out management services relating to the investment activity and management of BB Biotech AG. The management contract is valid for an indefinite period and can be terminated by either party with a notice period of twelve months with effect as per the end of the following calendar year. The remuneration of the investment manager is determined by the respective contract and corresponds to a fixed fee of 1.1% p.a. on the average market capitalization without any additional fixed or performance-based elements.