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SIEMENS HEALTHINEERS AG

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Siemens Healthineers : Compensation Report 2021 (pdf) 0.84 MB

11/25/2021 | 02:10am EST

Compensation report 2021

siemens-healthineers.com

Compensation Report of Siemens Healthineers AG­ for Fiscal Year 2021

This Compensation Report describes the compensation awarded and due to each current and former member of the Managing Board and Supervisory Board of Siemens Healthineers AG­ in fiscal year 2021 in the period from October 1, 2020, through Septem- ber 30, 2021. The report gives a detailed and personalized account of the structure and amount of the different components of Managing Board and Supervisory Board compensation. The Compensation Report has been prepared jointly by the Managing Board and ­Supervisory Board; it complies with the requirements of the German Stock Corporation Act (Aktiengesetz, AktG) (section 162 of the AktG) and meets the recommendations of the German Corporate Governance Code (GCGC). Clear, comprehensible, and transparent reporting is of great importance to both the Managing Board and the Supervisory Board. For this reason, Siemens Healthineers AG­ implemented the new requirements early on a voluntary basis and, in the year of initial implementation, further asked the independent auditors to conduct a material audit of the Compensation Report, above and beyond the legal requirements of section 162 (3) of the AktG. This Compensation Report will be submitted to the Annual Shareholders' Meeting for approval on February 15, 2022.

A detailed description of the compensation systems for the members of the Managing Board and Supervisory Board of Siemens Healthineers AG­ can be found on our website  www.siemens-healthineers.com/investor-relations/corporate-governance.

This document is an English language translation of the German document. In case of discrepancies, the German language document is the sole authoritative and universally valid version.

Munich, November 23, 2021

Prof. Dr. Ralf P. Thomas

Dr. Bernhard Montag

Dr. Jochen Schmitz

Chairman of the Supervisory Board

Chief Executive Officer

Chief Finance Officer

Contents

Compensation of the members of the Managing Board of Siemens Healthineers AG

04

Summary of Managing Board compensation in fiscal year 2021

06

Determination of the compensation for fiscal year 2021

09

Target compensation and compensation structure

09

Appropriateness of Managing Board compensation

10

Maximum compensation

11

Variable compensation in fiscal year 2021

11

Short-term variable compensation (bonus)

13

Long-term variable compensation (Siemens Healthineers Stock Awards)

16

Malus and clawback provisions

21

Share Ownership Guidelines

21

Pension benefit commitments

22

Compensation awarded and due in fiscal years 2021 and 2020

22

Compensation of former Managing Board members in fiscal years 2021 and 2020

23

Compensation of the members of the Supervisory Board of Siemens Healthineers AG

24

Compensation system of the Supervisory Board

24

Supervisory Board compensation in fiscal years 2021 and 2020

25

Multiyear overview: Information on the development of Managing Board

and Supervisory Board compensation in relation to the compensation of

the overall workforce and to the Company's earnings performance

26

Other

28

Independent auditor's report

29

Siemens Healthineers Compensation report 2021

Compensation of the members of the Managing Board of Siemens Healthineers AG­

Compensation of the members of the Managing Board of ­Siemens ­Healthineers AG

The compensation described below for the members of the Managing Board of Siemens ­Healthineers AG (hereinafter: Managing Board members) for fiscal year 2021 is based on the compensation system applicable since October 1, 2020, which was developed pursuant to section 87a (1) of the AktG and approved with a majority of 98.91 % by the Annual Shareholders' Meeting on Febru- ary 12, 2021. Pursuant to section 120 a (1) sentence 1 of the AktG, the Annual Shareholders' Meeting of a listed company resolves to approve the compensation system for the Managing Board members presented by the Supervisory Board each time there is a material amendment to the compensation system, but at least every four years, i. e., at the latest at the 2025 Annual Shareholders' Meeting. The compensation system applied to all active Managing Board members in fiscal year 2021. A full description of the compensation system for Managing Board members is accessible to the public at  www.siemens-healthineers.com/investor-relations/corporate-gov-ernance/managing-board-compensation.

Highlights of fiscal year 2021

Despite the ongoing COVID-19 pandemic and the associated global uncertainties and exceptional challenges, both the Managing Board and all employees worldwide contributed to making fiscal year 2021 to the most successful year since the IPO in 2018. The Company had raised the outlook three times in a row and ended the fiscal year with revenue at a record high of around € 18 billion, a comparable increase of approximately 19 % compared with the prior year. Adjusted basic earnings per share (EPS) of € 2.03 (2020: € 1.61) was also significantly higher. The share price performance reflected this positive business development and the closing price of € 56.18 at the end of the fiscal year was around 50 % higher than the prior-year level (2020: € 38.30) and double the price since the IPO in March 2018. The inclusion in the DAX 40 index should also be mentioned in this context. In mid-August, the share price reached a record high and has since settled at a stable high level.

Key factors in this performance, alongside a consistent increase in revenue from COVID-19 antigen rapid tests (from € 100 million in fiscal year 2020 to more than € 1 billion in fiscal year 2021), were further market share gains contributing to record growth and the success in maintaining supply chains. Despite the ongoing COVID-19 pandemic, the Company has successfully ensured the medical care through its products and services and reliably maintained production and supply chains at times of high additional demand.

Another key factor was the combination with Varian Medical Systems, Inc. (hereinafter: Varian) in April 2021. As a result of the business combination with cancer specialist Varian - one of the biggest acquisitions in the industry - Siemens Healthineers­ has further expanded its position as a holistic partner in healthcare, thereby completing the Upgrading Phase of Siemens Healthineers­ Strategy 2025 ahead of the original schedule. In addition, we have worked with our colleagues at Varian to set our strategic course for the years ahead and are starting the new fiscal year as a healthcare company with enhanced relevance and a record order backlog.

Moreover, we were able to successfully drive forward our research and development: To mention just one example, the photon-counting computed tomography scanner, in connection with which the U.S. Food and Drug Administration (FDA) has been referred to as the "first significant new technology for computed tomography in nearly a decade". The fundamentally new detector technology can not only increase image quality, but also has the potential to reduce the radiation and dosage of contrast media for our patients.

04

Siemens Healthineers Compensation report 2021

Compensation of the members of the Managing Board of Siemens Healthineers AG­

The rollout of our holistic global Sustainability Program, including the Sustainability Report and our commitment to the Science Based Target initiative (SBTi), further demonstrates that we are sharpening our focus on sustainable actions.

Highlights of fiscal year 2021

COVID-19 antigen

Gain of market

Meaningful new

Combination with

Siemens Healthineers

Sustainability

rapid test business

shares

products

Varian in April 2021

share price at all-time

Sustainability Report,

high & DAX40

SBTi commitment

inclusion

Strategy and Managing Board compensation

As a global leader in medical technology, we want to contribute to mastering global healthcare challenges by providing innovative products and services. To this end, the Managing Board has defined Siemens Healthineers­ Strategy 2025, which pursues the strategic goal of addressing new growth opportunities and securing our market leadership beyond 2025. The Upgrading Phase specified for the fiscal years 2020 through 2022 was aimed at continuous growth in existing markets as well as entry into new markets. At the same time, comparable revenue growth in excess of 5 % p. a. and an increase in adjusted basic earnings per share growth of around 10 % p. a. should be achieved. Supported by the acquisitions of ECG, Corindus, and Varian as well as by the successful Core Business, the Company was able to achieve all key goals of the Upgrading Phase ahead of the original schedule.

The compensation system for the Managing Board shall incentivize the implementation of the Company strategy as well as the value-­creating,long-term development of the Company, while at the same time avoiding disproportionate risks. To this end, it shall provide the right incentives for increasing earnings and revenue growth as well as other relevant strategic topics aimed at the Com- pany's sustainable development.

Compensation in fiscal year 2021

Since the Managing Board compensation is closely linked to the Company's success, the outstanding performance achieved in the fiscal year is directly reflected in the compensation of our Managing Board members. In accordance with the strong pay-for-performance principle anchored in the compensation system, extraordinary performance should be adequately rewarded and falling short of targets should lead to a noticeable reduction in compensation. This most successful year for Siemens Healthineers is therefore reflected in the Managing Board compensation - the integration of Varian had been set as one of the targets for the short-term variable compensation. Growth and the creation of value for our shareholders - measured in terms of adjusted basic EPS - were further key targets. Moreover, efforts undertaken in terms of environmental, social, and governance aspects were included in a number of sustainability targets for both short-term and long-term variable compensation. Due to the additional focus on sustainability, Managing Board compensation is even more closely aligned with the interests of our shareholders and stakeholders.

05

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Siemens Healthineers AG published this content on 25 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 November 2021 07:09:06 UTC.


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