Medacta : 2021 Remuneration Report

REMUNERATION REPORT

Medacta's Annual Report 2021

INDEX

1.	INTRODUCTION	86
2.	REMUNERATION GOVERNANCE	86
3.	REMUNERATION PHILOSOPHY AND PRINCIPLES	90
4.	REMUNERATION FRAMEWORK FOR BOARD OF DIRECTORS	91
5.	REMUNERATION FRAMEWORK FOR GROUP EXECUTIVE MANAGEMENT	94
6.	OWNERSHIP OF SHARES AND OPTIONS	102
7.	OTHER REMUNERATION-RELATED INFORMATION UNDER THE OAEC (AUDITED)	102
8.	RELATED PARTY COMPENSATION	102
9.	REPORT OF THE STATUTORY AUDITOR ON THE REMUNERATION REPORT	103

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AUGMENTED REALITY SURGICAL PLATFORM

An innovative solution that features advanced planning tools, revolutionary tracking system, and augmented reality to potentially improve surgery accuracy and efficiency, with low upfront capital investment and cost per case compared to other technologies.

A D V A N C E D P L A N N I N G

The protocol is based on CT derived images. These enable an accurate and personalized plan to optimize implant positioning and joint balancing. NextAR is a cloud-based system based on MySolutions platform, accessible from any device.

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LETTER FROM THE CHAIRMAN OF THE REMUNERATION COMMITTEE

Dear Shareholders,

On behalf of the Board of Directors and the Remuneration Committee, I am pleased to introduce Medacta's Remuneration Report for the financial year ending December 31, 2021. This report follows a similar structure to the prior year's report. However, our open and regular dialogue with shareholders and proxy advisors led to some developments in disclosure that we believe improve transparency on how Medacta's performance results impact the variable incentive payments of the Group Executive Management. Transparency is key for us, so we continuously work to improve our disclosures.

The results reached in the Financial Year 2020, along with the resilience and proven ability to adapt to a new world, allowed the Board of Directors and the Group Executive Management to not extend the compensation cut measure for the Financial Year 2021. Medacta operations in 2021 were still affected by the COVID-19 pandemic, with last quarter developments that were challenged by a worldwide surge of COVID-19 cases that stalled operations. Despite the challenging market conditions, Medacta continued executing its strategy, with an impressive 20.0% growth rate as compared to the previous year period, gaining market

shares, preserving margins, and investing in innovation, people, and technology to sustain our momentum. Medacta's expansion allowed to retain all our employee positions worldwide and add 158 jobs in critical areas to maximize the company's ability to execute our strategy.

As described in this report, Medacta's remuneration policy aims to support the Company's strategic plans; motivating Members of the Board of Directors and Group Executive Management on the near-medium terms and striving for future long-term success; attracting, engaging, and retaining the best talent in the MedTech industry. To this end, we have enhanced the remuneration structure in line with market practice, introducing a Long-Term Incentive Plan for our Group Executive Management, selected key managers and employees of Medacta, with a proposal at the Board of Directors meeting held on March 30, 2021. The plan approved by the Board of Directors provides the eligible Medacta employees with an opportunity to become shareholders of the company, and hence align their interests to those of Medacta's other shareholders, to participate in the future long-term success and prosperity of the Group, and to enhance and reward loyalty.

84 Medacta's Annual Report 2021 l Remuneration Report

#beMedacta culture is a key contributor for our sustainable success, as also described in the Sustainability Report 20201. Integrity, trust and accountability, results orientation, teamwork and loyalty are all values that define our culture. Our values and their evaluation are integrated in our recruiting process, in the onboarding activities and in the performance review. In 2021 we reviewed and adopted a Succession plan for key employees and key roles within the Group to identify, develop, retain and train employees that will fill leadership roles as they become available and keep alive our #beMedacta culture.

For the upcoming years we expect to continue our focus on evolving our variable incentive plans to reflect Medacta's corporate social responsibility and sustainable approach, relevant environmental, social, and governance targets to ensure that our compensation framework is attractive, effective in achieving our mission, and sustainable. We will also continue to evolve the structure of our variable incentive plans, particularly with respect to maintaining and further strengthening the strong link between pay and performance.

In accordance with the Articles of Association2, at the annual shareholders' meeting in May 2022, we will ask for approval of the maximum aggregate remuneration amount to be awarded to the Board of Directors for the period until the next annual shareholders meeting in 2023. In addition, the shareholders will be asked to approve (i)

the maximum overall fixed compensation of the Group Executive Management in 2023, (ii) the maximum overall variable short-term compensation for the Group Executive Management for the work performed in 2021, and (iii) the maximum overall variable long-term compensation of the Group Executive Management that may be allocated in 2023. Finally, the annual shareholders' meeting will approve the amount of remuneration to Board Members for consulting services in a function other than as Board Members until the next annual shareholders meeting as well as cast a consultative vote on this Remuneration Report.

On behalf of the Board of Directors, I would like to thank you for your continued feedback and ongoing support. We hope that you find this report informative, and we remain confident that our compensation system aligns well with our shareholder interests. We look forward to continued dialogue and collaboration.

Philippe Weber

Chairman of the Remuneration Committee

1. Medacta's Sustainability Report 2020 is available on Medacta's website at https://www.medacta.com/EN/sustainability.
2. Medacta's Articles of Association are available on Medacta's website at https://www.medacta.com/EN/corporate-governance?goto=organizational-regulations.

Remuneration Report l Medacta's Annual Report 2021

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