Commerzbank : Remuneration Report 2021 pursuant to §162 AktG

Remuneration Report

2021

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Remuneration report

The following remuneration report describes the principles governing the remuneration of the Board of Managing Directors and Supervisory Board of Commerzbank Aktiengesellschaft and explains the level and structure of remuneration for the 2021 financial year. It complies with the requirements laid down in Art. 162 of the German Stock Corporation Act (AktG) and the recommendations of the German Corporate Governance Code.

Board of Managing Directors

Introduction

The Supervisory Board ratified the remuneration system for the members of the Board of Managing Directors in December 2014; it has been in force since 1 January 2015. It has since been amended to bring it into line with the revised version of the Remuneration Regulation for Institutions, the new requirements of the German Stock Corporation Act following implementation of the Second Shareholders' Rights Directive (SRD II), and the revised version of the German Corporate Governance Code. The 2020 Annual General Meeting approved the remuneration system, although there was also a certain amount of criticism. Through meetings with investors, the Supervisory Board was subsequently able to identify areas where the remuneration system could be better adapted to Commerzbank's new strategic direction.

At its meeting on 16 February 2022, the Supervisory Board of Commerzbank Aktiengesellschaft decided to further develop theremuneration system for the Board of Managing Directors in order to provide the best possible support for Commerzbank's successful transformation by ensuring that the remuneration system for the Board of Managing Directors is optimally adapted to the situation. The revised remuneration system is to be submitted to the 2022 Annual General Meeting for approval and will then apply from the 2023 financial year. The amount of remuneration for the new position of Deputy Chairperson of the Board of Managing Directors is to take effect in the remuneration system immediately after the system has been submitted for endorsement at the Annual General Meeting. See the "Outlook" section below for details.

This remuneration report significantly increases the transparency of reporting. In particular, the targets and target achievement of the members of the Board of Managing Directors are shown in more detail than in previous years. The new legal requirements laid down in the revised version of Art. 162 of the German Stock Corporation Act have also been implemented. The auditor also checked the content of the remuneration report in addition to ensuring that it meets the legal requirements.

Overview of the remuneration system

The following section provides an overview of the components of the remuneration system for the members of the Board of Managing Directors:

Component

Fixed remuneration

Chairman of the Board of Managing Directors: €1,674,247 gross Ordinary member of the Board of Managing Directors: €990,000 gross

Description

Non-monetary elements of remuneration

The non-monetary elements include the use of a company car with driver, security measures and insurance contributions, and the applicable tax thereon.

Retirement and surviving dependants' pension

The members of the Board of Managing Directors receive a defined contribution pension commitment that also provides for a pension for surviving dependants.

Target amount

The target amount of variable remuneration is €660,000 gross for the ordinary members of the Board of Managing Directors and €1,116,165 gross for the Chairman. The amount paid out is dependent on target achievement (Group, departmental and individual targets) in the past financial year. The Remuneration Regulation for Institutions stipulates a three-year accrual period for measuring the variable remuneration of members of the Board of Managing Directors, meaning that target achievement for the past financial year is also incorporated into overall target achievement for the two subsequent financial years.

Short-term and long-term variable remuneration (short-term incentive, "STI", and long-termincentive, "LTI")Variable remuneration consists of a short-term incentive (STI) and a long-term incentive (LTI) component.

The STI (40% of the total target achievement amount) is paid out half in cash after the end of the financial year. The other half is paid out on the basis of the share price after a retention period of 12 months, also in cash.

The LTI (60% of the total target achievement amount) is subject to a retrospective performance evaluation after a regular period of five years (deferral period). This retrospective performance evaluation allows the Supervisory Board to check whether the target achievement as originally determined is still appropriate in hindsight. If the success rewarded by the variable remuneration has not proved to be sustainable, the Supervisory Board has the option of amending its original assessment of target achievement. This may result in the LTI being reduced or revoked altogether. Half of the LTI is paid out in cash after the retrospective performance evaluation. The other half is paid out on the basis of the share price after a further retention period of 12 months, also in cash.

Commerzbank Remuneration Report 2021

Component	Description
Limit on the amount of	To discourage Board members from taking inappropriate risks, variable remuneration is limited to a
variable remuneration	maximum of 140% of fixed remuneration. Overall target achievement is also capped at a maximum of
150%, which means that the maximum total target achievement amount for ordinary members of the Board
of Managing Directors - without taking into account the performance of the STI and LTI share elements - is
€990,000 gross per financial year.
Maximum remuneration	The allocation from all remuneration components is limited to a maximum of €6m gross per financial year
for each member of the Board of Managing Directors.
Determination of the bonus	After the end of the financial year, the Supervisory Board determines the total amount available for variable
pool for variable	remuneration (bonus pool). The Supervisory Board has the option of reducing the bonus pool if specified
remuneration	economic or regulatory indicators are inadequate, in order to comply with regulatory requirements. This
may result in a complete loss of variable remuneration.
Adjustment of Group target	If extraordinary circumstances arise, the Supervisory Board may increase or reduce the Group's target
achievement if	achievement by up to 20 percentage points in order to neutralise positive and/or negative effects. This is
extraordinary	subject to the condition that the change in circumstances is beyond the Bank's control and was
circumstances apply	unforeseeable (e.g. windfall profits or decline in earnings due to losses caused by extreme natural
disasters). This provision allows the Supervisory Board to take extraordinary factors not related to the
performance of the individual members of the Board of Managing Directors into account when determining
the achievement of targets. Any application of this adjustment clause would be explained in detail in the
remuneration report.
Malus and clawback	If the retrospective performance evaluation conducted after a regular period of five years does not confirm
provisions	the original assessment of target achievement, this may result in the LTI being reduced or revoked
altogether (malus).
Furthermore, the Supervisory Board has the option, particularly in the event of serious misconduct on the
part of a member of the Board of Managing Directors, to reclaim previously paid variable remuneration (STI
and LTI) from the Board member in question and/or to void shares that have not yet been paid out
(clawback).

Principles of the remuneration of the Board of	Expansion of environmental targets for the 2022
Managing Directors	financial year
At the heart of Commerzbank's strategy is the Bank's commitment
Link between the remuneration system and strategy	to achieve net zero by 2050 at the latest. Commerzbank has thus
The remuneration system supports the long-term development of	aligned itself with the Paris Climate Agreement's goal of limiting
Commerzbank's Group strategy. It is aligned with the	global warming to a maximum of 1.5 degrees Celsius compared
requirements of the strategic agenda and the overall risk strategy,	with pre-industrial times.
and is consistent with the Bank's risk, capital and liquidity	To this end, Commerzbank has set itself the following targets in
structure. To strengthen successful corporate governance and	particular:
ensure it remains stable over the long term, variable remuneration

is based on a multi-year assessment. In addition, half of it is share-related and thus based on the Commerzbank share price. To encourage the Board of Managing Directors to act sustainably and thus achieve long-term value growth, 60% of the variable remuneration is structured as a long-term component (LTI). The malus and clawback provisions act as an incentive for sustainable action on the part of the Board of Managing Directors. The targets set annually for variable remuneration promote the long-term performance of Commerzbank. For a number of years, they have included targets relating to environmental, social and governance (ESG) aspects. In particular, these may include targets regarding sustainability, customer and employee satisfaction, and demographic change, along with specific targets for risk and reputation management and compliance targets. Sustainability is one of Commerzbank's key strategic objectives. With this in mind, the remuneration system is now geared more strongly to environmental targets, which are gradually being given a larger weighting.

• • The carbon emissions of the loan and investment portfolio are to be reduced to net zero by 2050 at the latest.

• • The volume of sustainable financial products is to be increased to €300bn by the end of 2025.

• • Commerzbank's own banking operations are to be net zero by 2040, including a climate-neutral supplier portfolio.

To support these targets, the Supervisory Board has already expanded the ESG targets for the 2022 financial year. They form an essential basis for setting individual targets and are also anchored in the departmental targets of the individual members of the Board of Managing Directors. For example, the Supervisory Board has given departmental targets for both Thomas Schaufler and Michael Kotzbauer as the members of the Board of Managing Directors responsible based on the target from the sustainability strategy of increasing the volume of sustainable financial products to €300bn. The Bank's sustainability strategy is also to be further developed in line with the objectives mentioned above, which will

also form the basis for ESG targets. ESG targets are key core objectives within individual targets. This includes the requirement for each member of the Board of Managing Directors to consistently implement and engage with sustainability topics in the Bank's segments and back office functions in order to implement the targets within the Bank. Further details on sustainability can be found on the Commerzbank website under the heading "Our Responsibility".

amount of variable remuneration based on target achievement and notification to the member of the Board of Managing Directors in question. Half of this remuneration component is payable in cash after the end of the financial year; the other half is payable after a 12-month retention period, also in cash but based on share price performance. This half is linked to the performance of the Commerzbank share since the January following the end of the financial year.

Core elements of the remuneration system

The core elements of the remuneration system are fixed (non-performance-related) and variable (performance-related) remuneration components.

Fixed remuneration components

The fixed remuneration components include the basic annual salary and non-monetary elements. The basic annual salary is €990,000 for ordinary members of the Board of Managing Directors and €1,674,247 for the Chairman. The basic annual salary is payable in 12 equal monthly instalments. The non-monetary elements mainly consist of the use of a company car with driver, security measures and insurance contributions, and payment of the applicable tax thereon. Members of the Board of Managing Directors are also entitled to company pension arrangements, which are set down in pension agreements and described in the separate "Pension provision" section below.

Performance-related remuneration components (variable remuneration)

The remuneration system provides for variable remuneration linked to the achievement of targets set by the Supervisory Board at the start of each financial year. Variable remuneration consists of a short-term incentive (STI) and a long-term incentive (LTI). It is calculated based on (i) target achievement by the Commerzbank Group, (ii) target achievement by the departments (segments and/or shared functions) for which the member of the Board of Managing Directors in question is responsible, and (iii) achievement of individual performance targets. Target achievement for the Group and the department and individual performance can each be between 0% and 200%; however, the overall level of target achievement from these three components is limited to 150%. Multiplying the overall level of target achievement by the

Long-term incentive (LTI) The remaining 60% of the variable remuneration takes the form of a long-term incentive. Entitlement to the LTI arises only after a regular five-year deferral period and is subject to a retrospective performance evaluation. The purpose of the retrospective performance evaluation is to enable the Supervisory Board to check whether the total target achievement amount determined is still appropriate in retrospect, for example whether risks were underestimated or not recognised or whether unexpected losses were incurred. The Supervisory Board also adjusts the LTI, if necessary, based on the follow-up review of the bonus pool (shown below). The retrospective performance evaluation can thus result in the LTI being reduced or cancelled altogether. Half of the LTI element resulting from the retrospective performance evaluation is payable in cash and half after a further 12-month retention period, also in cash but on the basis of the share price. As with the share-based part of the STI, the performance of the Commerzbank share since the January following the end of the relevant financial year is taken into account. The share-based half of the LTI therefore reflects the performance of the Commerzbank share during the regular five-year retention period and the subsequent 12-month retention period.

Target amount The target amount for variable remuneration is €660,000 for the ordinary members of the Board of Managing Directors and €1,116,165 for the Chairman, based on target achievement of 100%.

Target setting Before the beginning of each financial year, the

Supervisory Board sets targets for the members of the Board of Managing Directors. The setting of targets is based on the corporate strategy and multi-year planning and is geared towards promoting success-oriented, sustainable corporate governance:

target amount for variable remuneration purposes gives the total	•	Company targets The Supervisory Board sets targets based
amount of variable remuneration based on target achievement.	on economic value added (EVA) or another ratio that it may
Thus, the total amount of variable remuneration based on target	choose for the Group and for the departments for which the
achievement is likewise capped at a maximum of 150% of the	member of the Board of Managing Directors in question is
Board member's target variable remuneration.	responsible.
Short-term incentive (STI) 40% of the variable remuneration	• Group target The Supervisory Board sets the Group target
takes the form of a short-term incentive. Entitlement to the STI	for all members of the Board of Managing Directors
arises upon determination by the Supervisory Board of the total	uniformly as a performance curve. As in previous years, the