Infineon Technologies : Remuneration Report

Remuneration Report 2022

Infineon Technologies AG

The remuneration report explains the principles of the remuneration system for the Management Board and Supervisory Board of Infineon Technologies AG and sets out, on an individual basis, the remuneration awarded or due to current and former members of the Management Board and Supervisory Board in the 2022 fiscal year (1 October 2021 to 30 September 2022) in a clear and understandable manner. It complies with the new requirements stipulated in section 162 of the German Stock Corporation Act (AktG) introduced by the German Act Implementing the Second Shareholder Rights Directive (ARUG II).

In this report, Infineon Technologies AG is also referred to as "the Company" and the Infineon Group is also referred to as "Infineon".

Due to rounding, individual figures in this report may not add up precisely to the totals provided, and the percentages shown may not reflect precisely the absolute values to which they relate.

KPMG Wirtschaftsprüfungsgesellschaft audited the remuneration report for compliance with the requirements of section 162, paragraph 3, sentences 1 and 2 of the German Stock Corporation Act (AktG), as well as for its content, and issued its unqualified audit opinion thereon.

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Contents

 2 Review of the 2022 fiscal year

 2 Successful 2022 fiscal year

 2 Changes in the composition of the Management Board and Supervisory Board

 3 Management Board remuneration 3 Remuneration system

3 Determining the remuneration

3 Strategic approach and appropriateness of the remuneration 4 Remuneration structure and components,

target/minimum/maximum remuneration

 9 Variable remuneration in the 2022 fiscal year

9 Short-term variable remuneration (Short-Term Incentive, STI) 12 Long-term variable remuneration (Long-Term Incentive, LTI)

18 Commitments to Management Board members upon termination of their Board activities

1. Benefits and pension entitlements in the 2022 fiscal year
2. Resignation of Dr. Reinhard Ploss
3. Resignation of Dr. Helmut Gassel

1. Remuneration awarded or due in the 2022 fiscal year

1. Active members of the Management Board

1. Former members of the Management Board

1. Other information

25 Supervisory Board remuneration

1. Remuneration structure and components
2. Remuneration awarded or due in the 2022 fiscal year
3. Comparative review of remuneration trends and Infineon's earnings performance

1. Independent auditor's report

Infineon Technologies AG|  Remuneration Report 2022

Review of the 2022 fiscal year

Review of the 2022 fiscal year

Successful 2022 fiscal year

In line with the principle enshrined in the remuneration system that excellent performance should be appropriately rewarded and failure to meet targets should result in a significant reduction in remuneration (the "pay for performance" principle), the very successful 2022 fiscal year - despite the difficult climate - is reflected in the variable remuneration of the Management Board. Not only financial success is con- sidered, but also environmental and social aspects. The remuneration of the Management Board members is therefore also aligned with the interests of the shareholders and of other stakeholders.

Changes in the composition of the Management Board and Supervisory Board

In the 2022 fiscal year, there were a number of changes in the Management Board team, principally as a result of the resignation of the former Chief Executive Officer, Dr. Reinhard Ploss, on the grounds of age. Dr. Reinhard Ploss resigned from office on 31 March 2022. His employment contract, supplemented by a transitional agreement, continues until 31 December 2022.

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At its meeting on 25 November 2021, the Supervisory Board reappointed Jochen Hanebeck as a member of the Management Board for the period from 1 April 2022 to 31 March 2027. At the same time, it appointed him as Dr. Reinhard Ploss's successor as Chief Executive Officer and Labor Director.

Moreover, at its meeting on 16 February 2022, the Supervisory Board appointed

Dr. Rutger Wijburg as a member of the Management Board (Chief Operations Officer) for the period from 1 April 2022 to 31 March 2025. He succeeds Jochen Hanebeck in his role as Chief Operations Officer.

Dr. Helmut Gassel resigned from office with effect from the close of 31 May 2022. His employment contract was terminated by mutual agreement at the close of 30 September 2022.

The Supervisory Board resolved on 27 April 2022 to appoint Andreas Urschitz as

a member of the Management Board (Chief Marketing Officer) for the period from 1 June 2022 to 31 May 2025. He succeeds Dr. Helmut Gassel in his role as Chief Marketing Officer.

Kerstin Schulzendorf retired from the Supervisory Board on 31 May 2022 on the grounds of age. She was succeeded on 1 June 2022 by Mirco Synde.

Infineon Technologies AG|  Remuneration Report 2022

Management Board remuneration

Management Board remuneration

Remuneration system

Determining the remuneration

The remuneration system for the Management Board (including the remuneration of individual Management Board members) is determined by the Supervisory Board on the recommendation of the Executive Committee and is reviewed on a regular basis.

The current remuneration system was established by the Supervisory Board on

20 November 2020 and approved by the Annual General Meeting held on 25 February 2021 in accordance with section 120a of the German Stock Corporation Act (AktG). It has applied in full since 1 October 2021. The previous remuneration system continues to apply for a transitional period with respect to the tranches in the Mid-Term Incentive (MTI) and Long-Term Incentive (LTI) schemes that were still outstanding when the new remuneration system was established.

The main components of the remuneration system are described below. A more detailed description of the remuneration system can also be found on Infineon's website.

www.infineon.com/management-board-remuneration-system

Strategic approach and appropriateness of the remuneration

In accordance with legal requirements and the recommendations of the German Corporate Governance Code (DCGK), the remuneration of the Management Board members is intended to reflect the typical level and structure of management board remuneration at comparable companies as well as Infineon's economic position and future prospects. Other aspects to be taken into account are the duties, responsibilities and performance of each individual Management Board member and Infineon's wider pay structure. The relationship between Management Board remuneration and the remuneration of senior management and of the workforce as a whole are considered, including changes over time.

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The remuneration structure is designed to promote sustainable and long-term development. The level of remuneration should contribute towards Infineon's business strategy and long-term development, with a cap in place in the event of exceptional developments. The Company sets remuneration at a level that is com­ petitive both nationally and internationally, with the aim of inspiring and rewarding dedication and success in a dynamic environment.

Strategic approach

The Management Board remuneration system is closely linked with Infineon's strategy and makes a significant contribution to the achievement of its corporate targets. Incorporating Infineon's key performance indicators into the remuneration of the Management Board incentivizes long-term sustainable growth and growing profit- ability. Account should also be taken of efforts that contribute towards Infineon's strategic, technological and structural development. The review of Infineon's performance in comparison with that of relevant competitors should encourage long-term outperformance for Infineon, while simultaneously uniting the interests of the Management Board more closely with those of the shareholders. At the same time, the Supervisory Board is aware of Infineon's responsibility as part of society. There- fore, non-financial factors mainly from areas of Environmental, Social & Governance (ESG) are also relevant for the remuneration of the Management Board.

Appropriateness

To ensure the appropriateness of the Management Board remuneration, the Supervisory Board performs horizontal and vertical comparisons on a regular basis.

Horizontal comparison

The horizontal view involves the comparison of the remuneration of the Management Board of the Company with that of similar companies. The relevant peer group is taken to be the DAX 40 companies.

Infineon Technologies AG|  Remuneration Report 2022

Management Board remuneration

Vertical comparison

In addition to the horizontal comparison, a vertical view is also taken. Here, the internal remuneration structure is examined by comparing the remuneration of the Management Board with that of the workforce as a whole in Germany. In addition to the current status, changes in the level of remuneration over time are also considered.

Review of appropriateness in 2022

In the 2022 fiscal year, the Supervisory Board commissioned a review of the Management Board remuneration system by an independent remuneration expert to ensure its compliance with legal requirements and objective appropriateness. On this occa- sion, a review was also performed of the target total remuneration of the individual Management Board members. The conclusion of the independent expert's report was that Infineon's remuneration system complied both with the legal requirements and with the recommendations of the German Corporate Governance Code (DCGK). In particular, the report concluded that the variable remuneration was oriented towards the Company's sustainable and long-term development. It also noted that the remuneration of the Management Board was appropriate, although in some areas the level of remuneration was below normal market rates. When a comparison was made with the market, other companies were also more heavily weighted towards the variable remuneration component. The results presented in the review by the remuneration expert were discussed in detail on 22 April 2022 by the Executive Committee and on 19 May 2022 by the Supervisory Board.

Remuneration structure and components, target/minimum/maximum remuneration

Overview of the remuneration structure and remuneration components

The currently effective remuneration system for the Management Board comprises the fixed and variable remuneration components presented in the following over- view. Fixed remuneration includes the basic annual salary, fringe benefits and the company pension plan. The variable (performance-related) remuneration comprises the one-yearShort-Term Incentive (STI) and the four-yearLong-Term Incentive (LTI).

Fixed remuneration

Basic annual salary

Fringe benefits

Company pension plan

Variable (performance-related) remuneration

Short-Term Incentive (STI) - short-term variable remuneration

Performance criteria

Modifier (0.7 to 1.3)

Performance period

Limitation/Cap

Payment

Long-Term Incentive (LTI) - long-term variable remuneration

Plan type

Performance criteria

Performance period

Limitation/Cap

Payment

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Fixed, non-performance-related remuneration paid in twelve equal monthly installments

Primarily a company car with chauffeur (also for private use), and an allowance for health and nursing care insurance as well as various insurance and general employee benefits

Defined contribution plan that provides an annual pension contribution and capital market-oriented interest rate

• 1/3 Return on Capital Employed (RoCE) as planned
• 1/3 Free Cash Flow (FCF) as planned
• 1/3 Segment Result Margin (SRM) as planned
• Collective performance of the Management Board using specific criteria
• Extraordinary developments

One year

250 percent of the contractual allocation amount

In cash

Performance Share Plan

• 80 percent relative Total Shareholder Return (TSR)
• 20 percent ESG targets

Four years

250 percent of the allocation amount

Generally in shares

Infineon Technologies AG|  Remuneration Report 2022