Vonovia : Remuneration Report 2023 incl. Auditor's Report

Auditor's Report

Vonovia SE

Bochum

Remuneration Report pursuant to § 162 AktG for the Financial Year from January 1 to December 31, 2023

(Translation - the German text is authoritative)

Contents

Seite

Remuneration Report pursuant to § 162 AktG for the Financial Year from January 1, toDecember 31, 2023 ..................................................................................................................... 1

Auditor's Report .......................................................................................................................... 1

DEE00121653.1.1

Contents

1 Foreword

4	I.	Management Board Remuneration for the
2023 Fiscal Year
4	1.	Principles of Management Board Remuneration
6	2.	Overview of Management Board Members'
Remuneration System
9	3.	Remuneration System in Detail
18	4.	Obligation to Hold Shares
19	5.	Reclaim (Clawback) and Reduction (Malus) of
Performance-Related Remuneration
19	6.	Information About Payments in the Event of
Withdrawal From the Management Board
20	7.	Information on Third-Party Payments
21	8.	Information on the Level of Management Board
Remuneration in the 2023 Fiscal Year
23	II.	Remuneration of the Supervisory Board in the
2023 Fiscal Year
23	1.	Remuneration System of the Supervisory Board
24	2.	Remuneration of the Supervisory Board Members
25

III. Comparative Presentation of the Development in the Remuneration of Management Board Mem-bers, Supervisory Board Members and the Rest of the Workforce as Well as the Company's Earnings Development

Foreword

Dear Shareholders,

We are delighted to present to you the 2023 Remuneration Report of Vonovia SE.

The 2022 Remuneration Report was approved by the Annual General meeting held on May 17, 2023, with a large majority of 79.94% in accordance with Section 120a (4) of the German Stock Corporation Act (AktG). Nevertheless, the Management Board and the Supervisory Board have addressed feedback from individual shareholders in detail and incorporated this feedback into the revision of our renumeration report. Vonovia SE aims to provide clear and comprehensive reporting that is intended to lay the groundwork for broad acceptance by all stakeholders of the remuneration paid to executive bodies. When preparing the remunera-tion report, Vonovia SE followed national and international best practice benchmarks in order to meet the capital market's expectations of a high level of transparency and comprehensibility when it comes to remu-neration decisions. Vonovia SE's remuneration reporting far exceeds the regulatory requirements and takes into account feedback from dialogue with investors and voting right consultants.

In particular, even greater transparency is provided on the remuneration decisions made. Finally, the Super-visory Board would like to emphasize the fact that the pension scheme in the past was abolished completely for new hires as of the 2021 fiscal year, meaning that Management Board members are now only granted pension allowance in cash. This means that the only Management Board members covered by the pension scheme are those with legacy rights from the past.

Pay for Performance 2023

2023 was a challenging year for Vonovia SE. The increased interest rates and high inflation dealt a hefty blow to economic activity in the residential real estate sector: The transaction market slumped, as did construc-tion activity. Pressure on rents increased, as the shortage of housing was compounded by rising costs, too. In this environment, the Group continued to pursue its operational tasks and projects with determination. The rental of 546,000 of the Group's own apartments remained the main pillar of its business. The adjusted EBITDA from rental increased by 6.5%. This increase went some way to compensating for the decline in earnings in the other segments.

The change in the valuation of assets posed a major challenge for the company: Against the backdrop of the changes in the market environment, the Group had to recognize value adjustments amounting to € 10.7 billion on its real estate portfolio. The Management Board responded to this back in summer 2022 by priori-tizing freeing up liquidity over lifting earnings. The sale of assets amounting to € 4 billion in 2023 coupled with cost and investment discipline meant that the Group continues to enjoy a stable foundation. This was, however, at the expense of Group FFO (funds from operations) and FFO per share. The loan-to-value (LTV) ratio, one of the company's key performance indicators, is close to the target corridor. As the business model is fundamentally intact, the Management Board remains committed to its strategic path in general.

In order to explain the implications this had for the variable remuneration paid to the Management Board members, we would like to use the section below to address the key issues that were decisive for target

1

achievement for the 2023 fiscal year. Based on the results achieved in the 2023 fiscal year for the perfor-mance criteria Adjusted EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) and Group FFO, the target achievement level for the Short-Term Incentive (STI) 2023 is presented below:

STI 2023 target achievement - Vonovia

Target value	Actual value	Target achievement
in € million	in € million	in %
Group FFO	1,917.0	1,847.1	62.0
Adjusted EBITDA	2,810.1	2,652.4	41.6
Total target achievement	56.9

The Supervisory Board also defined "cash conversion from sales" as an overarching performance target for the 2023 fiscal year in the context of the STI and took this as a basis for developing and defining individual measures specific to the executive divisions and targets for the members of the Management Board. For the 2023 fiscal year, the target achievement level for the personal performance factor of each Management Board member was set at 1.2, resulting in an overall target achievement level for the purposes of the STI 2023 of 68.3% (56.9% x 1.2) against the backdrop of a challenging market environment.

The target achievement level for the long-term incentive plan (LTIP) 2020 tranche is therefore as follows:

LTIP tranche 2020 target achievement

Target value

(100% target achievement)Actual valueTarget achievement

Relative Total Shareholder Return1 (25% weighting)

Development of NAV per share2 (25% weighting)

same as index per-formance 3.0% growth p.a.

+3.08% above index 110.26% performance

0.85% growth p.a. 64.22%

Development of Group FFO per share3 (25% weighting)

4.0% growth p.a.

1.63% growth p.a. 52.63%

Customer satisfaction (CSI)4 (25% weighting)

+ 5 points

+ 7.4 points 200.00%

Total target achievement 106.78%

• 1 Difference between Vonovia's TSR and the development of the FTSE EPRA/NAREIT Germany Index.

• 2 Relative change in the NAV at the end of the performance period divided by the number of ordinary shares compared with the same figure before the start of the perfor-mance period.

3

Relative change in the Group FFO at the end of the performance period divided by the average number of ordinary shares compared with the same figure on the last day before the start of the performance period.

4 Difference between the CSI ("Customer Satisfaction Index") at the end of the performance period and the CSI at the beginning of the performance period.

Personnel Changes Within the Management Board and Supervisory Board

The 2023 fiscal year brought personnel changes on the Management Board of Vonovia SE. Helene von Roeder resigned from the Management Board of Vonovia SE with effect from June 30, 2023. Ruth Werhahn was appointed to the Management Board of Vonovia SE to head up the newly created HR executive division with effect from October 1, 2023.

There were also personnel changes in the composition of Vonovia SE's Supervisory Board in the 2023 fiscal year. The term of office of the Supervisory Board members Jürgen Fitschen (Chair), Prof. Dr. Edgar Ernst (Deputy Chair) and Daniel Just expired at the end of the Annual General Meeting held on May 17, 2023. We would like to express our sincere thanks to those members who have left. Dr. Daniela Gerd tom Markotten was elected to the Supervisory Board at the Annual General Meeting held on May 17, 2023. The new appoint-ments and reappointments to the Supervisory Board were based on a strategic succession planning process, which was discussed in detail by the Executive and Nomination Committee. This also resulted in the propo-sal to amend the Articles of Association so as to reduce the number of members from twelve to ten and to have the members' terms of office expire at different times, creating a staggered board. When Clara C. Streit took over as Chair of the Supervisory Board in the past fiscal year, the tasks of the committees were also reassigned and distributed across four committees. Since then, the committees of the Supervisory Board are the Governance and Nomination Committee, the Audit, Risk and Compliance Committee, the HR and Remuneration Committee and the Strategy, Finance and Sustainability Committee.

The Supervisory Board's HR and Remuneration Committee will continue to work intensively on further enhancing the remuneration system for the company's executive bodies and will take suggestions and findings from dialogue with stakeholders into account in this regard.

On behalf of the Supervisory Board, we would like to kindly ask for your support for the 2023 Remuneration Report. Further information on these and other topics related to remuneration can be found in the 2023 Remuneration Report and in the invitation to the 2024 Annual General Meeting.

Clara C. Streit

Dr. Ariane Reinhart

Chair of the Supervisory Board

Chair of the HR and Remuneration Committee

I. Management Board

Remuneration for the 2023 Fiscal Year

This remuneration report describes the principles and structure of the remuneration system for Vonovia SE Man-agement Board and Supervisory Board members while explaining the structure and amount of individual remunera-tion granted and owed to Management Board and Supervi-sory Board members for the 2023 fiscal year. The report has been prepared by the Management Board and Supervisory Board in accordance with the requirements of Section 162 of the German Stock Corporation Act (AktG) and complies with the recommendations of the German Corporate Gover-nance Code (GCGC) as amended on April 28, 2022. In addition, the guidelines of the Working Group on Sustain-able Management Board Remuneration were taken into account in their current version.

As a residential real estate company, Vonovia SE is a corpo-rate citizen. This explains why the activities of Vonovia SE are never focused exclusively on financial aspects, but also take social factors into account. Vonovia SE is aware of its special role and responsibility: As a service provider and the provider of homes for around one million people, its focus is on its customers and their needs. This is why it strives to maintain its building stock and make an active contribution to shaping neighborhoods. Vonovia SE offers its customers modern apartments that meet their needs while at the same time developing services for higher quality of living. Vonovia SE is committed to the principles of the social market economy and profitability and accepts a level of responsibili-ty for safe, decent and affordable housing.

The remuneration report and attached report on the audit of the remuneration report conducted by Pricewaterhouse-Coopers GmbH Wirtschaftsprüfungsgesellschaft in accor-dance with the requirements of Section 162 (3) AktG both in terms of form and content can be found on the Vonovia SE website:Investor-Relations-website

1. Principles of Management Board Remuner-ation

The Supervisory Board of Vonovia SE considers it a central part of its remit to ensure that the structure of the remuner-ation paid to Management Board members is clearly linked to the implementation of the overarching corporate strategy. As a result, it ensures that strategy and corporate success as well as remuneration for the Management Board's perfor-mance are clearly linked (pay-for-performance).

Based on this fundamental principle, a high proportion of the Vonovia SE Management Board's remuneration consists of performance-related components. Due to the consideration of strategically relevant key figures for corporate manage-ment as performance criteria, Management Board remuner-ation is closely linked to business development.

The Vonovia SE Management Board remuneration system is an effective instrument for ensuring that Vonovia fulfills this role and at the same time successfully implements its corpo-rate strategy. In addition to the Group's key financial perfor-mance indicators, Management Board remuneration also takes into account environmental, social, governance (ESG) and sustainability performance aspects.

The performance criteria used to measure Management Board remuneration reflect the corporate strategy and in particular provide incentives for long-term, sustainable corporate growth. The Management Board remuneration system reflects the Management System's key figures in line with the corporate strategy. Through these, incentives are determined to align the interests of the Management Board with those of shareholders and other stakeholders such as customers and employees. In addition to considering sus-tainability performance targets, comparison with relevant market participants in relative terms also has a role to play here.

Vonovia SE Remuneration Report 2023