Encavis : remuneration report for financial year 2023

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1. Disclosures on item 6 of the agenda: remuneration report Remuneration report 2023

The Management Board and the Supervisory Board of Encavis AG ("Encavis" or "company") have together imple- mented the statutory requirements on the preparation of remuneration reports in accordance with section 162 AktG in the following remuneration report.

The remuneration report describes the basic features of the remuneration system for the members of the Manage- ment Board and the Supervisory Board and provides information on the individual remuneration granted and owed in the 2023 financial year for the current and former members of the Management Board and the current and former members of the Supervisory Board.

The company has decided to have the remuneration report substantively audited by the auditor extending beyond the requirements under section 162 (3) sentence 1 AktG.

After preparation by the Personnel and Nomination Committee, the current remuneration systems for the members of the Management Board and the Supervisory Board of the company have been adopted by the Supervisory Board in accordance with section 87 (1) and section 87a (1) AktG and were approved at the Annual General Meeting on 1 June 2023. You can find detailed information on this online on the company's website at https://www.encavis.com/ en/about-us/governance.

Resolution on the approval of the remuneration report for the previous financial year (2022)

A total of 107,761,785 no-par-value shares, equating to an equal number of votes and 66.92 % of the share capital, were represented at the Annual General Meeting on 1 June 2023 for the resolution on the approval of the remuner- ation report for the 2022 financial year, prepared and audited in accordance with section 162 AktG (agenda item 6). The resolution received 60,031,460 Yes votes (55.71 %), with 47,730,325 (44.29 %) voting against the resolution. The remuneration report for the 2022 financial year as prepared and audited was therefore approved by a majority. The company is responding to questions and comments from shareholders and shareholder representatives at previous Annual General Meetings. In the hope of increasing the approval rate, the company has enhanced the remuneration systems for the members of the Management Board and Supervisory Board with effect from 1 January 2023. The company adheres to the structure of the remuneration report resulting from the remuneration systems.

Resolution on the approval of the amended remuneration system for the members of the Management Board

Based on the recommendations of the Personnel and Nomination Committee, the Supervisory Board revised the system of remuneration for the members of the Management Board that was approved by the 2021 Annual General Meeting with effect from 1 January 2023. The correspondingly adjusted abstract remuneration system for the mem- bers of the Management Board was approved at the Annual General Meeting on 1 June 2023 with retroactive effect from 1 January 2023 with an approval rate of 86.50 %.

Resolution on the approval of the amended remuneration system for the members of the Supervisory Board

Based on the recommendation of the Personnel and Nomination Committee, the Supervisory Board enhanced the remuneration system for Supervisory Board members approved by the 2021 Annual General Meeting with effect from 1 January 2023 due to the constantly increasing demands on the Supervisory Board's monitoring and advisory activities as a result of the continuously growing legal and regulatory requirements. The correspondingly adjusted abstract remuneration system for Supervisory Board members was approved at the Annual General Meeting on 1 June 2023 with retroactive effect from 1 January 2023 with an approval rate of 98.85 %.

2 Encavis AG ¥ ¥ ¥ Remuneration report 2023

Preliminary remarks

Since the wording in section 162 (1) AktG is not specific, it is necessary to begin by explaining and substantiating the term "granted".

According to this section, remuneration is granted when it actually goes to the executive body member and is transferred to their assets (payment-related perspective). Alternatively, it is permitted to disclose remuneration (already) in the remuneration report for the financial year in which the activity on which the remuneration is based (one or more years) has been fully performed (vesting-related perspective). Encavis believes that this perspective allows for a reasonable comparison to be made, since the variable short-term remuneration for 2023, for instance, appears alongside the financial position for the 2023 financial year. For this reason, the company uses the vesting-related perspective for the "granted remuneration". The company's Management Board and Supervisory Board continue to employ the vesting-related perspective.

1. The remuneration of the Management Board in the 2023 financial year

1. Principles of the remuneration system

The remuneration system for the members of the Management Board was approved by the Annual General Meeting on 1 June 2023 by a majority of 86.50 % of the capital represented.

The remuneration system for the members of the Management Board makes an important contribution to the advance- ment of the business strategy and the long-term, sustainable and value-creating development of the company. In structuring the remuneration system and specifying Management Board remuneration, the Supervisory Board worked on the basis of the following principles:

Principles of the remuneration system

The Supervisory Board can take extraordinary circumstances, the effects of which are not sufficiently accounted for in target achievement, into appropriate consideration in defining targets in a small number of justified cases.

The remuneration system has been defined with the aim of being simple, clear and comprehensible.

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Management Board remuneration is primarily based on the financial position of the company as well as the performance of the Management Board as a whole. The company's long-term strategic growth targets as communicated in the strategy for the years leading up to 2027 represent key parameters in the short- and long-term variable remuner- ation.

With regard to long-term variable remuneration, the Supervisory Board has decided to introduce an additional long-termperformance-related remuneration component at the recommendation of the Personnel and Nomination Committee. Every year, the members of the Management Board receive a performance-related,long-term variable bonus for the achievement of ESG targets ("ESG bonus"). In consideration of the company's specific situation and its business strategy, the Supervisory Board is generally free to select and/or combine environmental, social and governance (ESG) targets at its due discretion that are suitable for ensuring reasonable, ESG-based incentives for the members of the Management Board in consideration of the company's interests. The term of the ESG bonus is three

1. years. Multipliers to measure the degree of target attainment are defined at the time that the ESG target or targets are announced. The first long-term variable remuneration payment based on ESG targets is due at the end of the 2025 financial year if the targets are met.

To that effect, the remuneration components of the performance-related remuneration form a key part of the overall structure:

Components of Management Board remuneration

2. Implementation and review of the remuneration system

The remuneration system applies to all members of the Management Board from 1 January 2023 as well as to all newly agreed or extended contracts with members of the Management Board and in the case of reappointment.

The Personnel and Nomination Committee regularly reviews the appropriateness and conventionality of the remunera- tion of the members of the Management Board and proposes amendments where necessary to the Supervisory Board in order to ensure a customary yet competitive remuneration package for the members of the Management Board. In accordance with the applicable remuneration system, the Supervisory Board has determined specific target remuner- ation for each member of the Management Board.

4 Encavis AG ¥ ¥ ¥ Remuneration report 2023

The Supervisory Board has also determined the performance criteria for each member of the Management Board in relation to the performance-related, variable remuneration components in the 2023 financial year, provided these are not already defined directly by the applicable remuneration system.

In the 2023 financial year, the Supervisory Board did not make use of the options set out in the remuneration system in accordance with the legal provisions to deviate temporarily from the remuneration system or to make adjustments when the targets are achieved in case of specific circumstances. No variable remuneration components were reclaimed in the 2023 financial year.

3. Total remuneration target

The Supervisory Board defines the total remuneration target for each member of the Management Board on the basis of the remuneration system for the upcoming financial year. The total remuneration target consists of the sum of fixed remuneration and variable remuneration.

Target total remuneration	Dr Christoph Husmann	Mario Schirru
(all amounts in TEUR)	Chairman of the	Member of the
		Management Board	Management Board
		Joined: 1 October 2014	Joined: 1 August 2022
		2023	2023
Fixed remuneration	500	390
Short-term variable remuneration	290	220
Total	790	610
Long-term variable remuneration	280	210
Long-term variable ESG component	30	30
Regular fringe benefits*	27	24
Total remuneration	1,127	874

*A target was not set for the regular fringe benefits in the 2023 financial year. The actual values granted are therefore indicated.

4. Maximum remuneration

The Supervisory Board has defined a maximum remuneration limit in accordance with section 87a (1) sentence 2 no. 1 AktG that includes the total remuneration to be granted (total of all remuneration amounts for the financial year in question, including fixed annual salary, fringe benefits and variable remuneration components) to the mem- bers of the Management Board. The maximum remuneration for one financial year has been defined as follows:

Maximum remuneration pursuant to	Chairman of the Management Board	Member of the Management Board
section 87a (1) sentence 2 no. 1 AktG	EUR 3.2 million	EUR 3.2 million

The Supervisory Board notes that the relevant metric in terms of maximum remuneration is the total remuneration granted to a member of the Management Board for a single financial year, irrespective of the precise date of payment of individual remuneration elements (in particular short-term variable remuneration and long-term variable remuner- ation) and that the maximum remuneration is based on this metric. As a result, compliance with the maximum remuneration for the financial year in question cannot be reviewed until future reporting periods.

In accordance with the current remuneration system for the members of the Management Board, the maximum remuneration for the 2023 financial year will be reviewed as soon as the long-term variable remuneration is paid out.

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5. Application of the remuneration system in detail

1. Fixed remuneration components
2. 1. Annual salary
      The annual salary is a fixed, single-year remuneration component paid in cash in twelve equal monthly instalments.
   2. Fringe benefits
      The maximum amount of fringe benefits is defined for each member of the Management Board for the respective upcoming financial year. The Supervisory Board defines an amount for this purpose in proportion to the basic remuneration. Fringe benefits granted to members of the Management Board include a company car or rental car, which can also be used privately, and a mobile phone, which likewise can also be used privately. The members of the Management Board receive an allowance for health and care insurance.
      Dr Husmann received fringe benefits totalling EUR 27 thousand in the reporting period. Mario Schirru received fringe benefits totalling EUR 24 thousand in the reporting period. No pension commitments exist.
      The option to grant members of the Management Board additional remuneration as part of the fringe benefits was not used in the 2023 financial year.

Fixed remuneration	Dr Christoph Husmann	Mario Schirru
(all amounts in TEUR)	Chairman of the	Member of the
		Management Board	Management Board
		Joined: 1 October 2014	Joined: 1 August 2022
		2023	2023
Fixed remuneration		500	390
Fringe benefits		27	24
Total fixed remuneration		527	414

1. Variable remuneration components
2. 1. Short-termvariable remuneration (annual bonus)
      The members of the Management Board receive a performance-related, variable annual bonus for each financial year. The annual bonus provides an incentive to contribute to the implementation of the business strategy during a financial year. The annual bonus is set out at EUR 290 thousand in the Management Board contract of Dr Christoph Husmann and EUR 220 thousand in the Management Board contract of Mr Mario
      Schirru.
      After the end of the financial year, the achievement of each individual target is determined and summarised as a weighted average. The bonus payment amount for each past financial year is calculated as the per- centage of the weighted target achievement multiplied by the individual target amount.
      Performance targets were based on a variety of performance criteria. The Supervisory Board is responsible for determining the choice and weighting of individual performance criteria based on the recommendations of the Personnel and Nomination Committee for the coming financial year. If members of the Management Board do not achieve their targets, variable remuneration can fall to zero. Likewise, if members of the Management Board significantly overachieve in terms of their targets, target achievement is limited to 200 % (cap).

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Five strategic targets and one individual target were agreed with the members of the Management Board for the determination of target achievement in the 2023 financial year.

Target achievement	Strategic	Implementation and		Target
by members of the	degree of target	Weighting	achievement
Management Board	KPI	achievement	of KPI	of KPI

Dr Christoph Husmann

Mario Schirru

Growth target:	In the financial year, 1,000	25 %	50 %
The realisation of approx. 750	GWh of growth was realised
GWh of growth through new	through new solar and/or
solar and/or wind projects	wind projects.
equates to target achieve-	The target achievement
ment of 100 %. Attainment of	is 200 %
900 GWh or more equates to
target achievement of 200 %
EPS target:	EPS of EUR 0.60 was achie-	20 %	20 %
Increase operating EPS for	ved in the financial year.
the Group to over EUR 0.60	The target achievement
in 2023.	is 100 %
ESG target:	In the financial year, the	10 %	5 %
Development and implemen-	coverage rate was 92 % for
tation of employee training in	corruption prevention, 95 %
the areas of Code of Conduct,	for the Code of Conduct and
corruption prevention and	91 % for the German Act on
the German Act on Equal	Equal Treatment.
Treatment with a coverage	The target achievement
rate of at least 95 % of the	is 50 %
workforce
Strategic target:	An investment model was	25 %	50 %
Implementation of the	established with Badenova
strategy/concept and	AG & Co. KG in the financial
development of the organi-	year and three projects were
sation for the provision of	acquired.
services in the area of client	In the client solutions
solutions and marketing,	segment, an investment was
as well as the participation	made in TokWise Ltd. The
model for municipal utilities.	company has also entered
	the field of direct marketing.
	The target achievement
	is 200 %
Cooperation:	The assessment of overall	10 %	15 %
Continuation and expansion	performance is the respon-
of the team concept in the	sibility of the company's
Management Board to	Supervisory Board.
support consistency (tone	The target achievement
from the top)	is 150 %

	Individual	Implementation and		Target
	degree of target	Weighting	achievement
	KPI	achievement	of KPI	of KPI
Dr Christoph	Content integration of equity,	The target achievement	10 %	11.5 %
Husmann	corporate debt, project finan-	is 115 %
	cing and asset management
	story
Mario Schirru	Maintaining the high tech-	The technical performance in	7 %	10.1 %
	nical performance of the PV	the financial year was 98.6 %.
	systems (97.5 %)	The target achievement
		is 144 %
	Maintaining the high tech-	The technical performance in	3%	1.4 %
	nical availability of the wind	the financial year was 94.7 %.
	parks (95.5 %)	The target achievement
		is 47 %

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Overall, the Management Board members Dr Christoph Husmann and Mario Schirru achieved their targets. In summary, the Supervisory Board decided on a target achievement of 151.5 % for each member of the Management Board. Payment will be made in 2024.

Dr Christoph Husmann

TEUR	1.515		TEUR
290		440

Mario Schirru

TEUR	1.515		TEUR
220		334

Short-term variable remuneration		Dr Christoph Husmann	Mario Schirru
(all amounts in TEUR)		Chairman of the	Member of the
		Management Board	Management Board
		Joined: 1 October 2014	Joined: 1 August 2022
	2023	2023
Annual bonus	440	334
Total short-term variable remuneration	440	334

bb) Long-term variable remuneration

1. The virtual share option programme
   The long-term variable remuneration based on share options is granted in the form of a virtual share option programme (SOP). The SOP is a programme that, in terms of its framework and objective, is designed as an annually recurring, long-term remuneration component based on the overall performance of the Encavis share. An allotment amount defined by the Supervisory Board is converted into virtual share options known as share appreciation rights (SARs).
   The Supervisory Board defines an allotment amount percentage for each Management Board member based on the fixed salary and annual bonus (at 100 % target achieved) as a target (approximately 30 %). The allotment amount is converted into a corresponding number of SARs for the respective member of the Management Board after the end of the financial year. The allocation takes place as at 1 July for the respec- tive current financial year.

Target	Option	Amount
value	of allotted
value
in EUR	SAR

8 Encavis AG ¥ ¥ ¥ Remuneration report 2023

1. Prerequisites
   One prerequisite for exercising SARs is the achievement of the financial success target, which also deter- mines the specific amount of the remuneration. The SARs can be exercised for the first time after a vesting period of three years from the respective year of issue, after which they can be exercised at half-yearly exer- cise dates (30 June and 31 December) within two years of the end of the three-year vesting period. There are therefore five exercise dates in total.
   A prerequisite for exercising a SAR is the achievement of a specific performance target. To achieve the per- formance target, the overall performance of the Encavis share in Xetra trading (or in a comparable successor system) on the Frankfurt Stock Exchange must exceed the basic price by at least 30 % (strike price) on the day on which the SAR is exercised, as measured by the interim price rise and the dividends paid since the issue of the SARs. The basic price is the arithmetic average of the daily closing prices of the Encavis share in Xetra trading on the Frankfurt Stock Exchange (or in a comparable successor system) during the six months before the allotment date of the respective SAR tranche.
   The payment is based on the value of the option at the time of exercise and is capped at three times the difference between the strike price and the basic price. If a member leaves the company of their own accord, or if their employment is terminated for good cause, the programme rules stipulate that any SARs granted are forfeited in whole or in part.
   An overview of the prerequisites for exercising SARs and the remuneration granted by it:

Vesting period 3 years

Price increase by at least 30 %

Active employment relationship*

*When the employment contract of the member of the Management Board ends, the granted SARs remain in place. After the vesting period has ended, the SARs are exercised during the exercise period at the respective terms of the allotment.

1. Application in the financial year 2023
   In line with the vesting-related perspective, the remuneration is granted when all the postponed or resolu- tory exercise conditions (e.g. achievement of performance target, holding conditions, exercise declaration) associated with these remuneration components have been met.
   In the 2023 financial year, Dr Christoph Husmann exercised the SARs allotted to him in 2020 in part; the performance target (strike price of EUR 14.26 as of 30 June 2023) and holding conditions had been met. The SARs allotted in the 2020 financial year had an option value of EUR 3.52 per SAR, and the target value amounted to EUR 240 thousand. Dr Christoph Husmann was issued a volume of 68,181 SARs in 2020. The option value amounted to EUR 6.67 per SAR on the exercise date (30 June 2023). Dr Christoph Husmann sold 34,090 SARs on the exercise date. The remaining 34,091 SARs were not sold in the 2023 financial year. The long-term variable share option-based remuneration for Dr Christoph Husmann therefore amounted to EUR 228 thousand in the 2023 financial year.

34,090	EUR		TEUR
SARs	6.67		228

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In the 2023 financial year, Mr Mario Schirru fully exercised the SARs allocated to him in 2020, i.e. before his appointment to the Management Board. The performance target (strike price of EUR 14.26 as at 30 June 2023) and the holding condition were met. The 14,205 SARs allotted in the 2020 financial year had an option value of EUR 3.52 per SAR, and the target value amounted to EUR 50 thousand. The option value amounted to EUR 6.67 per SAR on the exercise date (30 June 2023). The long-term variable share option-based remuneration for Mr Mario Schirru therefore amounted to EUR 95 thousand in the 2023 financial year.

14,205	EUR		TEUR
SARs	6.67		95

Total variable remuneration	Dr Christoph Husmann	Mario Schirru
(all amounts in TEUR)	Chairman of the	Member of the
	Management Board	Management Board
	Joined: 1 October 2014	Joined: 1 August 2022
	2023	2023
Annual bonus	440	334
Long-term variable share-based remuneration	228	95
Total variable remuneration	668	429

6. Remuneration-related legal transactions

1. Terms and provisions for contract termination, including notice periods
   The Management Board members' contracts have the following residual terms and are subject to the following provisions regarding termination:
2. • The contract with Dr Christoph Husmann expires on 24 January 2029.
   • The contract with Mario Schirru expires on 24 January 2029.

The contracts are extended for the period for which the Supervisory Board resolves the reappointment of said member of the Management Board with their approval. The contract ends in the event of termination without notice for good cause or in the case of early unilateral resignation for good cause.

1. Change of control
   There is no special right of termination due to a change of control, nor are any commitments made for the pay- ment of any benefits due to the early termination of the Management Board contract following a change of control.
2. Early termination of the Management Board contract at the request of the Management Board member or by the company for good cause
   The contracts contain provisions regarding settlements for early termination.
   In the event of the early termination of the Management Board contract without good cause, the payments to the Management Board member, including fringe benefits, may not exceed the value of two years' remuneration and may not provide remuneration for more than the remaining term of the contract (severance cap). The calculation of the severance cap is based on the total remuneration for the previous financial year. Under certain circum- stances, it may also take into account the expected total remuneration for the current financial year.

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In the event of the early termination of the Management Board contract for reasons for which the Management Board member bears responsibility, the Management Board member will not be entitled to compensation for the remuneration for the remaining term. All SARs not yet exercised will also be waived.

Once their contracts expire, the members of the Management Board are subject to a non-competition clause for a period of two years. During this period they are entitled to compensation amounting to 50 % of their last fixed annual salary plus 50 % of the annual bonus, assuming 100 % target achievement.

1. Clawback
   In addition to the statutory regulations on the subsequent reduction of remuneration, the contracts of the mem- bers of the Management Board contain provisions that give the Supervisory Board the right to fully or partially retain or claw back variable remuneration components not yet paid. The Supervisory Board may exercise said right at its due discretion.
   In the event of wilful violations of material provisions of the Encavis Code of Conduct and/or material breach- es of contract, as well as substantial violations of the duty to exercise skill and care within the meaning of section 93 AktG, the Supervisory Board may partially or fully reduce to zero variable remuneration not yet paid for the assessment period in which the violation occurred. If it gains knowledge of any of the aforementioned violations, the Supervisory Board may demand the reimbursement of variable remuneration components already paid (compliance clawback).
   In addition, the Supervisory Board may claw back any variable remuneration already paid or calculated if the pay- ment or calculation was based on erroneous consolidated financial statements or a deficient sustainability report. The reimbursement must compensate for the difference determined in the corrected calculation (performance clawback).
   A clawback is not possible if the payment was made more than three years ago.
   The company's claims to compensation for damages (especially in connection with section 93 (2) sentence 1 AktG), the right of the company to revoke the appointment and the right to terminate the contract without notice remain unaffected.
   There was no subsequent reduction of remuneration in the 2023 financial year.
2. Assumption of executive functions at consolidated companies
   The members of the Management Board have a contractual obligation to transfer any remuneration received for the performance of executive functions at internal group companies or consolidated companies to the company. In addition, no remuneration was paid to the members of the Management Board on the part of third parties.