Wienerberger : Remuneration Report 2023

2023 | Remuneration Report

Remuneration Report

CONTENT

3	16		19
I. Introduction	IV. Supervisory Board	VI. Shareholder Feedback
	Remuneration
4	20
II. Executive Summary	18		Independent Assurance
6	V. Shareholdings of Members	Report1
of Managing Board and
III. Managing Board	Supervisory Board
Remuneration

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Remuneration Report

I. Introduction

Remuneration Policy

The Remuneration Policies for the Managing Board and the Supervisory Board were approved by shareholders at the 151st Annual General Meeting in 2020. They were drafted considering local and global best practices and also taking into account input received from investors and other market players (such as proxy advisors). The Remuneration Policy for the Managing Board creates a transparent, appropriate, equitable, and performance-driven remuneration system and aims at incentivizing sustainable value creation and the realization of key corporate targets to ensure maximum alignment with shareholders' interests. In addition, the incentive structure built into the Managing Board remuneration system is annually reviewed to determine its suitability for promoting a sustainable increase in enterprise value. The Remuneration Policy for the Managing Board helped to significantly improve wienerberger's performance and to stimulate wienerberger's strong organic growth in line with its ESG targets. It is valid for the period from 2020 to 2024 and can be viewed on the company's website (wienerberger.com).

According to regulatory requirements, the Remuneration Policies must be presented to the Annual General Meeting in case of material changes or at least every fourth financial year, which in 2024 is the case for wienerberger. Against this background, an independent advisory firm has been instructed by the Supervisory Board as an independent consultant to review (i) the current Remuneration Policy for the Managing Board considering the regulatory requirements as well as the expectations of investors and proxy advisors as well as

1. the current Remuneration Policy for the Supervisory Board regarding its competitiveness. Based on the results of the review, discus- sions between the Chairman of the Supervisory Board and the Chairman of the Managing Board as well as feedback of the Managing Board, revised Remuneration Policies for the Managing Board and the Supervisory Board have been prepared and approved by the

Supervisory Board with effect as of 1 January 2024 and will be presented to the 155th Annual General Meeting.

When reviewing the Remuneration Policies for the Managing Board and the Supervisory Board, the feedback that was received over the years during wienerberger's annual engagement activities with proxy advisors and institutional investors was also considered to ensure maximum alignment with market expectations. Specifically for the Remuneration Policy for the Managing Board, a number of elements are being introduced to further: (1) increase the transparency surrounding the performance measures to be used, and their associated weights; (2) refine the definition of discretion; (3) introduce share ownership guidelines; (4) introduce sustainability criteria in the annual variable remuneration; and (5) implement a Performance Share Plan instead of the existing Performance Cash Plan to further align the interests of the Managing Board with that of shareholders.

Remuneration Report

The present Remuneration Report of wienerberger for the 2023 business year was prepared by the Managing Board and the Supervisory Board and will be submitted to a vote at the 155th Annual General Meeting in 2024. The Remuneration Report provides a comprehensive overview of the remuneration components for current and former members of the Managing Board and the Supervisory Board, specifying the resulting entitlements and payouts for the 2023 business year. It was prepared in accordance with the provisions of the following guidelines and recommendations: (i) Shareholder Rights Directive II as transposed in the Austrian Stock Corporation Act;

1. Statement 37 of the Austrian Financial Reporting and Auditing Committee (AFRAC) on the Remuneration Report pursuant to sect. 78c of the Austrian Stock Corporation Act (Aktiengesetz); and (iii) Remuneration Policy 2020-2024 of wienerberger.

As for the performance targets for the 2024 annual bonus and long-term incentive awards (LTI), as in previous years, these will be disclosed to shareholders ahead of the 2024 Annual General Meeting.

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Remuneration Report

II. Executive Summary

wienerberger achieves solid results in 2023 despite headwinds from declining markets

Across the Group, the 2023 business year was marked by persistently high interest rates and historically high inflation. This macro -economic situation paired with geopolitical and global economic uncertainties resulted in strong headwinds in all of wienerberger's markets. Despite this challenging environment, wienerberger not only outperformed its end markets, but also met the expectations placed in the company. The Group's strong commitment to environmental, social and governance (ESG) targets is fully in line with its Strategy 2023 and the targets were overachieved.

The Supervisory Board strictly applied the Remuneration Policy approved by shareholders in 2020, which is continuing to prove highly effective in incentivizing sustainable value creation and realizing key corporate targets in line with shareholders' interests. No increases have been proposed to any of the incentive plans and no discretion was applied by the Supervisory Board during 2023.

Overview of remuneration components

Table 1 below provides an overview of the remuneration components as foreseen in the Remuneration Policy:

Managing Board's Pay Components

		Maximum Opportunity	Performance Measures	Performance	Other Components
			(weighting)	Period
Variable	Short-Term	100% of base salary	- Operating EBITDA	1 Year	- Performance targets
	Incentive		(1/3)		determined prospectively
			- Free Cash Flow (1/3)		- Payment deferred to next
			- Efficiency Enhancing		year
			Measures (1/3)
	Long-Term	CEO: 175% of base salary	- Relative TSR (1/3)	3 Years	- Performance targets
	Incentive	Other Managing Board	- ROCE (1/3)		disclosed prospectively
		Members: 150% of base salary	- ESG (1/3)		- 2-yearlock-up period
Fixed	Base Salary	In accordance with employment agreement and indexed from time to time
	Benefits & Pension	Incidental benefits covering company car, insurance, voluntary defined-contribution pension agreement

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Remuneration Report

Overview of Managing Board remuneration in 2023

The results achieved by wienerberger are reflected in the remuneration for the Managing Board, with all performance targets set by the Supervisory Board, and disclosed ahead of the 2023 Annual General Meeting. Table 2 shows a summary of the earned fixed remuneration and entitlements to short-term and long-term incentives in the 2023 business year.

Table 2: Fixed, short-term and long-term remuneration 2023

Remuneration of Managing Board Members	Fixed	Short-term	Long-term		Calculated total
in EUR		Remuneration	incentive	incentive 1)	Total gross	net 2)
Heimo Scheuch
CEO	2023	1,050,748	971,112	1,558,509	3,580,369	1,694,726
Gerhard Hanke
CFO	2023	496,239	464,212	745,000	1,705,451	851,013
Solveig Menard-Galli
COO	2023	481,142	459,331	723,231	1,663,704	832,227
Harald Schwarzmayr
COO	2023	511,548	472,778	758,747	1,743,073	867,943

1. LTI entitlement in 2023 refers to entitlements for LTI plan 2021, LTI plan 2022 and LTI plan 2023. // 2) Calculated total net corresponds to the value after payroll deduction of mandatory social security contributions and wage tax according to Austrian Law. The actual final net amount depends on the applicable law at the time of the payout (2023-2026) and the individual tax situation of each board member.

Overview of Supervisory Board remuneration in 2023

Since 2020, remuneration for the members of the Supervisory Board has been divided into annual fixed remuneration for Supervisory Board work and annual fixed remuneration for committee work. Table 3 below shows an overview of the remuneration of the members of the Supervisory Board earned in the 2023 business year.

Table 3: Overview of Supervisory Board remuneration in 2023

		2023
Remuneration of Supervisory Board	Fixed Supervisory	Fixed remuneration	Total
in EUR	Board remuneration	for committee work	remuneration
Peter Steiner	170,000	30,000	200,000
Myriam Meyer	105,000	30,000	135,000
Katrien Beuls 2)	52,822	13,205	66,027
Thomas Birtel	80,000	20,000	100,000
Effie K. Datson2)	52,822	13,205	66,027
David Davies 1)	80,000	40,000	120,000
Marc Grynberg	80,000	20,000	100,000
Peter Johnson 3)	27,397	6,849	34,247
Regina Prehofer 3)	27,397	6,849	34,247
Oswald Schmid 3)	27,397	6,849	34,247
Total	702,836	186,959	889,795

1) Chairman of the Audit and Risk Committee // 2) Member of the Supervisory Board since May 5, 2023 // 3) Member of the Supervisory Board until May 5, 2023

All Supervisory Board members continued to make significant contribution to wienerberger's strategic direction. As in previous years, all Supervisory Board members recorded a strong attendance record.

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Remuneration Report

III. Managing Board Remuneration

The Nomination & Remuneration Committee, in close cooperation with the Supervisory Board, is responsible for the structure of the remuneration system. It deals with all matters relating to the remuneration of the Managing Board members and the content of their employment contracts. The goal of the remuneration system is to align corporate goals with corporate strategy and shareholders' interests. Moreover, the members of the Managing Board are to receive remuneration that is appropriate by national and international standards.

Fixed remuneration component

The fixed remuneration component reflects the functions and the scope of responsibility of the respective Managing Board member. Its adequacy is evaluated by the Nomination & Remuneration Committee against companies that are both smaller and larger in size, industry, geography, or complexity. In addition to Austrian companies, companies considered that operate broadly in the same industry as wienerberger include: Uponor OYJ, CRH Plc, Compagnie de Saint Gobain SA, Boral Limited, Holcim Ltd, Kingspan Group Plc, Rockwool A/S, Heidelberg Cement AG, Ibstock Plc, Forterra Plc, and Sika AG as well as adjusted to reflect macroeconomic conditions, such as the consumer price indices that are commonly applied in Austria.

Table 4 below shows the fixed remuneration of the Managing Board members during the 2023 and 2022 business years. In line with common practice in Austria, fixed remuneration is divided into fourteen installments and paid at the end of each month; twice a year, the amount of the monthly salary is doubled. The fixed remuneration of the Managing Board Members is adjusted annually on the basis of Statistics Austria's consumer price index (CPI).

Table 4: Fixed remuneration

in EUR	2023	2022
Heimo Scheuch	1,050,748	944,865
Gerhard Hanke	496,239	460,000
Solveig Menard-Galli	481,142	460,000
Harald Schwarzmayr	511,548	460,000
Total	2,539,677	2,324,865

Variable remuneration component

Variable remuneration is composed of a short-term (STI) and a long-term (LTI) component, which is reviewed by the Nomination & Remuneration Committee on an annual basis.

Variable remuneration is designed to create incentives to motivate the Managing Board to achieve key strategic targets and a sustainable increase in enterprise value. The Nomination & Remuneration Committee is focused on ensuring that there is a strong pay-for-performance culture within the organization and the greatest possible alignment between shareholders' interests and that of the Managing Board. The Remuneration Policy devised by the Supervisory Board ensures a high degree of transparency by linking the performance targets to the communicated business strategy and market guidance, including of ESG targets. The performance targets set under incentive schemes are disclosed to all stakeholders on wienerberger's website on a prospective basis ahead of the Annual General Meetings, making it one of the few companies to provide such level of transparency to the market.

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Remuneration Report

Short-term variable remuneration (STI)

For the Managing Board members, STI opportunities are capped at 100% of base salary, and are solely conditional on the attainment of short-term corporate financial targets that are directly aligned with wienerberger's strategy: (1) operating EBITDA; (2) free cash flow; and (3) EBITDA from efficiency-enhancing measures (including the "Fast Forward" program).wienerberger  drives many different initiatives to increase efficiency. The largest of these is the "Fast Forward" program, implemented in 2018. The "Fast Forward" program provides the framework for measures to increase efficiency and improve profitability. Through strategic investments in the areas of operational excellence, innovation, digitization and sustainability, a substantial EBITDA contribution is to be generated as part of the "Fast Forward" program between 2021 and 2023.

Each measure is equally weighted and the specific targets are defined at the end of the business year, set on the basis of all information available at that time, by a resolution of the Supervisory Board on the basis of a recommendation by the Nomination & Remuneration Committee. The earned entitlements are paid out in the following year. The performance targets attached for each measure selected were disclosed prospectively ahead of the Annual General Meeting, which can be accessed on the company's website (wienerberger.com).

The Managing Board's STI target attainment and corresponding entitlements are shown in Table 5a and 5b, respectively. More spe- cifically, during the period under review, the Nomination & Remuneration Committee noted the following performance achieved by the Managing Board:

• Operating EBITDA: EBITDA as reported adjusted for effects from sale of non-core assets as well as structural adjustments.
• Free Cash Flow: adjusted by cash effective structural adjustments.
• EBITDA from Efficiency-Enhancing Measures (including the "Fast Forward" Program): The calculation for the "Fast Forward" EBITDA contribution comprises manufacturing excellence, supply chain management, general and administrative expense, inno- vation and procurement.

Consequently, the target attainment and the earned entitlements for the 2023 business year (paid out in 2024) are as follows:

Table 5a: Target attainment for STI in 2023

		Minimum		Maximum
		target	100% target	target
		attainment	attainment	attainment	Actual target attainment
Target	Weighting	in MEUR	in MEUR	in MEUR	in MEUR / %
2023
operating EBITDA	33%	750	800	850	810.8	111%
Free cash flow	33%	250	288	330	272.9	60%
EBITDA from efficiency-enhancing
measures	33%	30	45	50	45.6	106%

Table 5b: Earned entitlements for STI in 2023

	Earned
	entitlement	Payout in
in EUR	in 2023 1)	2024
Heimo Scheuch	971,112	971,112
Gerhard Hanke	464,212	464,212
Solveig Menard-Galli	459,331	459,331
Harald Schwarzmayr	472,778	472,778
Total	2,367,433	2,367,433

1) Assessment base is the last fixed annual remuneration after application of consumer price index

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Remuneration Report

For the 2022 business year, the target attainment and the earned entitlements were as follows:

Table 6a: Target attainment for STI in 2022

		Minimum		Maximum
		target	100% target	target
		attainment	attainment	attainment	Actual target attainment
Target	Weighting	in MEUR	in MEUR	in MEUR	in MEUR / %
2022
EBITDA LFL	33%	700	760	780	999.6	>150 %
Free cash flow	33%	310	385	400	597.7	>150 %
EBITDA from efficiency-enhancing
measures	33%	20	45	50	48.3	133%

Table 6b: Earned entitlements for STI in 2022

	Earned
	entitlement	Payout in
in EUR	in 2022	2023
Heimo Scheuch	944,865	944,865
Gerhard Hanke	460,000	460,000
Solveig Menard-Galli	460,000	460,000
Harald Schwarzmayr	460,000	460,000
Total	2,324,865	2,324,865

Long-term variable remuneration (LTI)

Every member of the Managing Board is entitled to a long-term variable remuneration component that is designed as a long-term incentive (LTI) program. The LTI program is structured as a share-based remuneration program (Performance Cash Plan) with a performance period of three years and a lock-up period of another two years for allocated shares. The CEO is eligible to be granted awards at a maximum of 175% of the fixed remuneration and the remaining Managing Board members a maximum of 150% of the fixed remuneration.

For the business years 2021 to 2024, the following performance measures for the LTI program were set for all members of the Managing Board:

• Relative total shareholder return (relative TSR is measured by the performance of the peer group, which is the companies listed in the STOXX® Europe 600 Construction & Material Index). Relative TSR creates an incentive to increase the long-term earnings power of the company and is directly aligned with shareholder interests by centering on the long-term creation of shareholder value.
• Return on capital employed after tax (ROCE)
  ROCE is the key indicator of wienerberger's value-oriented business management. It reflects the value creation by the regional organisation and by the Group as a whole. ROCE meets the requirements of the Austrian Code of Corporate Governance and is used by investors to assess long-term profitability and capital efficiency.
• Environmental, social, and governance (ESG) targets in line with the Strategy 2023. In this case, this is reduction of CO2 emissions.

The relevant targets for relative TSR, ROCE, and the reduction of CO2 emissions (ESG target) were defined by the Nomination & Remuneration Committee and submitted to the plenary of the Supervisory Board for adoption. The targets were determined on the basis of all information available at the time of adoption. Moreover, a target corridor with upper and lower limits was defined. The performance targets attached for each measure selected were disclosed prospectively ahead of the Annual General Meeting, which can be accessed on the company's website (wienerberger.com).

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Remuneration Report

Tables 7, 8 and 9 show the degree of target attainment for the LTI 2023, LTI 2022 and LTI 2021, and Table 10 shows the entitlements resulting from the degree of target attainment for LTI 2023, LTI 2022 and LTI 2021 in the 2023 business year. During the three-year performance period, entitlements are allocated based on target achievements. The actual payout is done after the end of the three-year performance period, with at least 50% paid out in wienerberger shares and not more than 50% in cash. LTI 2021 is paid out in 2024, while LTI 2022 is paid out in 2025 and LTI 2023 is paid out in 2026. The calculation of the share component is based on the average share price during the last 20 ATX trading days of the performance period. The members of the Managing Board will notify wienerberger about the desired amount of share uptake of the vested amount (which needs to be at least 50%) within 14 days of the auditor's opinion being available for the last financial year of the LTI performance period. The total amount of shares transferred in connection with the LTI 2021 will be reported at the 2024 Annual General Meeting as well as in the Remuneration Report for the 2024 business year.

As the target achievement was determined on the basis of a cash payment and the exchange ratio for the share component will therefore only be defined at a later date, the cash amount was used as the fair value in the measurement. For the business year 2023 covering LTI 2021, LTI 2022 and LTI 2023, an expense including incidental costs of € 4,119 thousand was recognized in the reporting year, of which 50% was recognized in equity for the share portion and 50% was recognized as a provision for the cash portion.

Table 7: Target attainment for LTI 2023 in 2023

		Minimum		Maximum
		target	100% target	target	Actual target attainment
Target	Weighting	attainment	attainment	attainment	in 2023
LTI 2023
Relative total shareholder return	33%	25.0%	50.0%	≥75,0%	> 50,0%	132%
ROCE	33%	11.0%	11.5%	12.0%	11.3%	60%
ESG - reduction of CO2 emissions	33%	14.5%	15.0%	15.5%	15.6%	> 150%
Table 8: Target attainment for LTI 2022 in 2023
		Minimum		Maximum
		target	100% target	target	Actual target attainment
Target	Weighting	attainment	attainment	attainment	in 2023
LTI 2022
Relative total shareholder return	33%	25.0%	50.0%	≥75,0%	> 50,0%	132%
ROCE	33%	11.0%	11.5%	12.0%	11.3%	60%
ESG - reduction of CO2 emissions	33%	10.0%	11.7%	12.3%	15.6%	> 150%
Table 9: Target attainment for LTI 2021 in 2023
		Minimum		Maximum
		target	100% target	target	Actual target attainment
Target	Weighting	attainment	attainment	attainment	in 2023
LTI 2021
Relative total shareholder return	33%	25.0%	50.0%	≥75,0%	> 50,0%	132%
ROCE	33%	10.2%	10.6%	11.1%	11.3%	> 150%
ESG - reduction of CO2 emissions	33%	5.0%	6.7%	7.2%	15.6%	> 150%

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Remuneration Report

Table 10: Earned entitlements for LTI 2021, LTI 2022 and LTI 2023 as of 31/12/2023

	Assessment
in EUR	base 1)
2023
Heimo Scheuch	1,050,748
Gerhard Hanke	502,279
Solveig Menard-Galli	496,998
Harald Schwarzmayr	511,548
Total	2,561,574
2022
Heimo Scheuch	1,050,748
Gerhard Hanke	502,279
Solveig Menard-Galli	496,998
Harald Schwarzmayr	511,548
Total	2,561,574
2021
Heimo Scheuch	1,050,748
Gerhard Hanke	502,279
Solveig Menard-Galli	496,998
Harald Schwarzmayr	511,548
Total	2,561,574

Earned	Earned	Earned
entitlement ²)	entitlement ²)	entitlement ²)
in 2021	in 2022	in 2023	Sum after cap	Cap3)
		400,414	400,414	1,838,809
		191,406	191,406	753,419
		189,394	189,394	745,498
		194,938	194,938	767,322
		976,152	976,152	4,105,048
	472,433	446,269	918,701	1,838,809
	204,444	213,326	417,770	753,419
	204,444	211,083	415,527	745,498
	204,444	217,262	421,707	767,322
	1,085,766	1,087,940	2,173,706	4,105,048
525,000	472,433	711,826	1,709,259	1,838,809
163,474	204,444	340,268	708,186	753,419
218,299	204,444	322,755	745,498	745,498
215,544	204,444	346,547	766,535	767,322
1,122,317	1,085,766	1,721,396	3,929,478	4,105,048

1. Assessment base is the last fixed annual remuneration after application of consumer price index // 2) No more than one third of the maximum amount per year, payout not earlier than 2024 for LTI 2021 and 2025 for LTI 2022, at least 50% in shares // 3) Upper limit for maximum target attainment

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