Schott Pharma — Remuneration Information 2024

Mar 15, 2024

REMUNERATION REPORT FOR FISCAL YEAR 2022/2023

INTRODUCTION

With this Remuneration Report, SCHOTT Pharma AG & Co. KGaA, Mainz, Germany, ("SCHOTT Pharma KGaA"), discloses the remuneration granted and owed to the members of the Management Board of SCHOTT Pharma Management AG, also Mainz ("SCHOTT Pharma Management AG"), for the first time. SCHOTT Pharma Management AG is the General Partner of SCHOTT Pharma KGaA.

In addition, the Remuneration Report also provides details on the remuneration granted and owed to members of the Supervisory Boards of SCHOTT Pharma KGaA and SCHOTT Pharma Management AG.

The Remuneration Report outlines the fundamental principles of the remuneration system for members of the Management Board and the Supervisory Boards; it complies with the regulatory requirements of the AktG. Moreover, the Remuneration Report is also oriented upon the provisions of the German Corporate Governance Code ("GCGC").

The presentation of remuneration granted and owed in the Remuneration Report is in accordance with the provisions of section 162(1) of the AktG. Accordingly, the report comprises all remuneration components actually paid to members of the Management Board and the Supervisory Boards in the reporting year (granted remuneration) and all remuneration components legally due but not yet paid (owed remuneration). This means that remuneration granted and owed is allocated to the correct period on an accrual basis, even though payout may occur at a later date.

For the past financial year 2022/2023, remuneration granted and owed was determined in accordance with the respective Management Board service contracts and the provisions of agreements underlying other remuneration elements. Although the Company was only listed for three calendar days during the reporting period (28 to 30 September 2023), the voluntary Remuneration Report outlines remuneration for the full financial year 2022/2023.

Against the background of the IPO at the end of September 2023, a new remuneration system for Management Board members has been in effect since 1 October 2023. This system applies (or will apply) to all existing Management Board service contracts, extensions, as well as to new service contracts being entered into.

REMUNERATION OF THE MANAGEMENT BOARD

REMUNERATION IN THE FINANCIAL YEAR 2022/2023

Both the CEO, Mr Andreas Reisse, and Dr Almuth Steinkühler, member of the Management Board (CFO), were appointed as members of the Management Board of SCHOTT Pharma Management AG throughout the reporting period.

Since SCHOTT Pharma KGaA was not a listed public limited company during most of the financial year 2022/2023, remuneration was in line with SCHOTT Group's remuneration policies and practices. The appropriateness of remuneration was assessed based on the tasks of the individual Management Board members as well as the economic situation of SCHOTT Pharma Group and SCHOTT Group, and the market environment. The appropriateness of remuneration was also assessed based on the performance shown, but also on the ratio of remuneration for the Management Board to remuneration for the Company's top management level and SCHOTT Pharma KGaA's employees in Germany.

The maximum remuneration of EUR 871,000 for Dr Almuth Steinkühler and EUR 1,393,600 for Andreas Reisse, which is stipulated in the respective Management Board service contract and assumes maximum payout of all remuneration elements, was not exceeded during the reporting period.

Remuneration for the financial year 2022/2023 includes non-performance-related components such as a fixed annual salary, fringe benefits and pension contributions as well as a performance-related short-term variable remuneration ("STI"). The remuneration package also includes elements granted or owed in connection with inflation or the IPO; these remuneration elements are referred to as "other remuneration" below. A variable remuneration element geared towards the Company's long-term development (the "LTI" programme) has been introduced with the new remuneration system, with effect from 1 October 2023, and therefore had not come into effect in the financial year 2022/2023. In this respect, please refer to the outlook for the new remuneration system from the new financial year 2023/2024 onwards, which is included in this Remuneration Report.

The share of variable remuneration in the remuneration granted and owed during the reporting period stood at 20.5% for Andreas Reisse and 15.9% for Dr Almuth Steinkühler.

In accordance with the provisions of the respective Management Board service contract, both members of the Management Board are entitled to a severance payment in the event of early termination of their respective appointments. This severance payment is capped at two years' remuneration; where the remaining term of the contract is less than two years, the severance payment is reduced to the remuneration for the regular remaining term. For the period prior to the IPO, annual remuneration was calculated, for the purposes of calculating severance pay, as the sum of the fixed annual salary and the target amount of short-term variable remuneration, without non-cash benefits and other fringe benefits being taken into account. For the period following the IPO, annual remuneration is determined, for the purposes of calculating severance pay, as the total remuneration for the past financial year or, in the Supervisory Board's reasonable discretion, as the expected total remuneration for the current financial year – in each case excluding pension benefits, non-cash benefits and other fringe benefits. This provision was not applied in the reporting period.

FIXED REMUNERATION

FIXED ANNUAL SALARY

Each member of the Management Board received a fixed annual salary for their work, paid in twelve equal monthly instalments.

FRINGE BENEFITS

Each member of the Management Board received fringe benefits in line with common market practice, such as a company car (including for private use), accident, D&O and private liability insurance cover, payment of costs for a health check, as well as subsidies for health and longterm care insurance.

PENSION BENEFITS

During the reporting period, Andreas Reisse was entitled to two defined contribution plans, structured as a direct commitment. Both commitments determine a pension benefit for each financial year, which increases the previous entitlement; besides a pension payment, this also entails benefits to surviving dependants in the event of death or disability. After 30 September 2023, both pension commitments will be maintained as a statutory non-forfeitable entitlement.

Defined-benefit obligations (DBO) for these pension commitments, measured in accordance with IFRSs, totalled EUR 2,011,943 as of 30 September 2023 (previous year: EUR 2,080,672); the service cost incurred in the reporting period was EUR 109,555.

Andreas Reisse has been entitled to a pension payment from 1 October 2023 onwards. Dr Almuth Steinkühler was already entitled to a pension payment in the reporting period, which is paid out in the form of a monthly cash payment for free disposal.

VARIABLE REMUNERATION

SHORT-TERM VARIABLE REMUNERATION (STI)

The members of the Management Board were included in SCHOTT Group's variable remuneration system in the financial year 2022/2023. This system defines targets for an assessment period covering one financial year. Four targets were defined for each of the two Management Board members, which are based on the development of SCHOTT Group and of SCHOTT Pharma Group in equal proportions.

Financial targets for profitable growth of SCHOTT Group were set by reference to the key financial indicators of "percentage revenue growth compared to the previous year" ("revenue growth") and "return on capital employed" ("ROCE"). Both targets determine variable remuneration with a weighting of 25% each. The target values as well as the threshold values and caps for revenue growth and ROCE were set for a multi-year period; they were derived directly from SCHOTT Group's medium-term expected business development.

Individual targets were determined with both Management Board members for SCHOTT Pharma Group. The key financial indicator EBITDA was determined to track the profitable growth of SCHOTT Pharma Group; this target determines 30% of Mr Reisse's, and 25% of Dr Steinkühler's variable remuneration.

The target structure for variable remuneration of the two Management Board members differs in terms of the second individual target. For Mr Reisse, the key financial indicator of SCHOTT Pharma Group net productivity was determined with a weighting of 20%. For Dr Steinkühler, a non-financial target (with a 25% weighting) was set which focuses on the establishment and expansion of all processes and structures required to ascertain a timely and successful execution of SCHOTT Pharma KGaA's IPO ("IPO readiness").

If achieved, the target value for each performance target leads to a target achievement level of 100%. If performance falls below the target value as well as below a defined threshold value, target achievement is 0% whilst excess performance beyond the respective target value (and beyond a defined cap) leads to target achievement of 200%. Except for the non-financial target of "IPO readiness", target achievement values between the threshold value and the cap are determined by way of linear interpolation. The threshold values and caps are equidistant to the respective target values.

The amount disbursed is determined by multiplying the aggregate target achievement values by the target amount. The maximum disbursement is capped at 150% of the target amount.

The key financial indicator of SCHOTT Group revenue growth is defined as the revenue increase for a given financial year, compared to the previous year. When determining this value, revenues for each financial year are adjusted for the effects of changes in the scope of consolidation. SCHOTT Group's revenues rose by 3.5% in the financial year 2022/2023. Adjusting for changes in the scope of consolidation in the financial year 2021/2022 (amounting to EUR 18.3m), revenue growth totalled 4.2%.

The key financial indicator of SCHOTT Group ROCE is defined as the ratio (expressed as a percentage) of operating income (EBIT) to average capital employed, which represents the capital tied up in operations to achieve the Company's objectives. It largely comprises current and non-current assets, less trade payables and advance payments received on orders. The average is determined as the arithmetic mean of the twelve monthly values during the financial year. When determining ROCE, operating income (EBIT) is adjusted for material effects from mergers & acquisitions activities or disposals of partial operations during the financial year under review. Based on an EBIT of EUR 412.9m and average capital employed of EUR 2,843.6m, SCHOTT Group's ROCE for the financial year 2022/2023 was 14.5%. Taking the adjustment of operating income (EBIT) by EUR 21.4m in performance-related expenses related to the IPO of the Pharma division into account, ROCE stood at 15.3%.

EBITDA (earnings before interest, taxes, depreciation and amortisation) of SCHOTT Pharma Group is defined as operating income (EBIT) before depreciation, amortisation, impairment losses and reversals of impairment losses on intangible assets and property, plant and equipment. SCHOTT Pharma Group's EBITDA for the financial year 2022/2023 totalled EUR 239.0m.

The key financial indicator of SCHOTT Pharma Group's net productivity is defined as the change in average selling prices relative to the change in average production costs in a given financial year. The change in average selling prices is defined as the change in average selling prices for a financial year compared to the previous year, multiplied by the volume of sales for the current financial year. The change in production costs is defined as the change in average production costs for a financial year compared to the previous year, multiplied by the volume of sales for the current financial year. Net productivity of SCHOTT Pharma Group for the financial year 2022/2023 totalled EUR 6.3m.

The performance criteria defined for Dr Almuth Steinkühler's non-financial target are the establishment of regular reporting, the establishment of an internal control system (ICS), and the establishment of a standalone IT environment. Full and timely achievement of performance criteria at the time of the planned IPO at the end of September 2023 amounted to 100% target achievement. In each case of failure to achieve all or some performance criteria on time, target achievement was 0%. In the event of early achievement of all performance criteria for a potential earlier IPO in the summer of 2023, the target achievement was agreed at 200%. All criteria were met in full and on time for the IPO executed on 28 September 2023, and a target achievement of 100% determined.

Relative to the set targets, these actual values yielded the following target achievement levels:

STI (variable remuneration) 2022/2023
Andreas Reisse	Chairman of the Management Board (CEO)
								Target achievement
	Target	Unit	Weighting	Threshold value	Target value	Cap	In absolute terms	In relative terms	Weighted
Financial targets
SCHOTT Group	Revenue growth	% year on-year	25%	+2.0	+5.0	+8.0	+4.2	73.6%	18.4%
SCHOTT Group	ROCE	%	25%	11.0	13.0	15.0	15.3	200.0%	50.0%
Individual targets
SCHOTT Pharma Group	EBITDA	EUR millions	30%	246.0	273.5	301.0	239.0	0.0%	0.0%
SCHOTT Pharma Group	Net pro ductivity	EUR millions	20%	-6	4	14	6.3	123.0%	24.6%
Total in %			100%						93.0%

STI (variable remuneration) 2022/2023

Dr. Almuth Steinkühler

Member of the Management Board (CFO)

								Target achievement
	Target	Unit	Weigh ting	Threshold value	Target value	Cap	In absolute terms	In relative terms	Weighted
Financial targets
SCHOTT Group	Revenue growth	% year on year	25%	+2.0	+5.0	+8.0	+4.2	73.6%	18.4%
SCHOTT Group	ROCE	%	25%	11.0	13.0	15.0	15.3	200.0%	50.0%
Individual targets
SCHOTT Pharma Group	EBITDA	EUR millions	25%	246.0	273.5	301.0	239.0	0.0%	0.0%
SCHOTT Pharma Group	IPO readiness	–	25%	Project completion after IPO	Project completion at the time of IPO	Early project completion	Project comple tion at the time of IPO	100.0%	25.0%
Total in %			100%						93.4%
Total in Euro			70.000						65,380

OTHER REMUNERATION

IPO INCENTIVE PROGRAMME

Agreements were entered into with both members of the Management Board that provide for bonus payments in the event of a successful IPO. The agreements comprise two elements: an IPO bonus, which incentivises a successful IPO execution, and a retention bonus which creates incentives to remain with the Company after the IPO. These agreements commenced on 1 March 2022 and will terminate at the end of the month that is twelve months after the first exchange trading day, i.e. on 30 September 2024.

Bonus payments are based on a defined plan amount of EUR 200,000 for Andreas Reisse and EUR 100,000 for Dr Almuth Steinkühler.

IPO bonus

Under the IPO bonus, the members of the Management Board may receive a bonus amounting to up to three plan amounts (i.e. a maximum of EUR 600,000 for Mr Reisse and EUR 300,000 for Dr Steinkühler). A bonus payment equivalent to the plan amount was agreed for execution of the IPO, irrespective of its success. Depending on the success of the IPO, the IPO bonus may increase by up to two further plan amounts.

The enterprise value of SCHOTT Pharma KGaA was chosen as the reference for determining the success of the IPO, with a multiplier used to determine the number of plan amounts resulting from enterprise value achieved. This multiplier defines the ratio of enterprise value to an agreed EBITDA figure of EUR 200m.

The target value for a successful IPO was set at an enterprise value of EUR 4bn, translating into a multiplier of 20x. In this case, the IPO bonus would increase by a further plan amount for IPO success, on top of the plan amount for IPO execution, bringing the bonus to a total of two plan amounts. A multiplier of 10x was set as the threshold value for IPO success, with a cap at a multiplier of 30x, with multiplier values of more than 10 and less than 30 being rounded commercially, to one decimal place.

The enterprise value at the time of the IPO was EUR 4.2bn, yielding a multiplier of 21 and 1.1 plan amounts, respectively. Together with the plan amount for IPO execution, the total IPO bonus thus amounts to 2.1 plan amounts, equivalent to a bonus amount of EUR 420,000 for Andreas Reisse and EUR 210,000 for Dr Almuth Steinkühler.

The agreements provide for 50% of the IPO bonus to be paid out with the payroll date following the IPO, i.e. October 2023. The remaining 50% will be disbursed with the payroll twelve months after the IPO, i.e. September 2024. Disbursement is subject, however, to both individuals being duly appointed as members of the Management Board of SCHOTT Pharma Management AG on the last day of the respective payment months, and that their respective service contracts are still in force.

Taking these conditions into account, EUR 210,000 was paid to Mr Reisse and EUR 105,000 to Dr Steinkühler in October 2023. For the purposes of this Remuneration Report, these payments were considered as remuneration owed for the reporting period.

Retention bonus

As the second element of the agreement, the retention bonus is focused on retaining the Management Board members for the Company. It will be disbursed with the payroll twelve months after the IPO, i.e. September 2024. The retention bonus provides for one additional payment equivalent to the plan amounts set out above. Likewise, disbursement is subject to both individuals being duly appointed as members of the Management Board of SCHOTT Pharma Management AG on the last day of the respective payment month, and that their respective service contracts are still in force.

Provided that both members are duly appointed as members of the Management Board of SCHOTT Pharma Management AG on 30 September 2024 and that their respective service contracts are still in force, the remaining 50% of the IPO bonus will be paid together with the retention bonus, translating into a payment of EUR 410,000 for Mr Reisse and EUR 205,000 for Dr Steinkühler.

INFLATION ADJUSTMENT

Both members of the Management Board received a one-off inflation adjustment payment of EUR 1,500 each during the reporting period.

The following tables provide an overview of remuneration granted and owed to the members of the Management Board in the reporting year. It also shows the maximum remuneration pursuant to section 87a of the AktG.

Total remuneration
Andreas Reisse Chairman of the Management Board (CEO) since 08/2022
	2022/2023		2021/2022
	EUR	%	EUR	%
Fixed remuneration
Fixed annual salary	355,839	48.8	331,996	50.1

Fringe benefits	12,295	1.7		15,614	2.4
Pension benefits	0	0.0		0	0.0
TOTAL	368,134	50.5		347,610	52.5
Variable remuneration
STI (variables remuneration)	149,422	20.5		270,321	40.8
Other remuneration				44,116	6.7
IPO Incentive Programme	210,000	28.8		0	0.0
Inflation adjustment	1,500	0.2		0	0.0
			Maximum remuneration
Remuneration granted and owed	729,056	100.0	1,393,600	662,047	100.0
Pension expenses	109,555			131,212
Total remuneration	838,611			793,259

Dr. Almuth Steinkühler Member of the Management Board (CFO) since 08/2022
	2022/2023			2021/20221
	EUR	%		EUR	%
Fixed remuneration
Fixed annual salary	207,400	50.5		125,500	62.5
Fringe benefits	22,415	5.5		14,609	7.3
Pension benefits	9,000	2.2		0	0.0
TOTAL	238,815	58.1		140,109	69.8
Variable remuneration
STI (variables remuneration)	65,380	15.9		60,666	30.2
Other remuneration
IPO Incentive Programme	105,000	25.6		0	0.0
Inflation adjustment	1,500	0.4		0	0.0
			Maximum remuneration
Remuneration granted and owed	410,695	100.0	871,000	200,775	100.0
Pension expenses	0			0
Total remuneration	410,695			200,775

¹ Joined SCHOTT Group on 1 February 2022

SUPERVISORY BOARD REMUNERATION

The Annual General Meeting of SCHOTT Pharma KGaA on 4 April 2023 approved the remuneration of the Supervisory Board of SCHOTT Pharma Management AG (as General Partner of SCHOTT Pharma KGaA) as well as the remuneration of the Supervisory Board of SCHOTT Pharma KGaA.

Considering the responsibilities of members of both boards, due care was taken when determining the remuneration system to ensure that remuneration adequately reflects the demands placed upon Supervisory Board members, both in terms of requirements and the time spent, and that it is deemed appropriate relative to prevailing market terms.

In line with this objective, Supervisory Board members receive a fixed remuneration, plus an additional remuneration for membership of a Supervisory Board committee.

In addition, all Supervisory Board members are reimbursed for expenses incurred in connection with exercising their office, as well as any value added tax which may be payable on their fees.

Fixed remuneration amounts to EUR 40,000 per financial year for each member of the Supervisory Board; the Chair of the Supervisory Board receives twice this amount, the Deputy Chair one and a half times.

Each member of the Audit Committee of SCHOTT Pharma KGaA's Supervisory Board receives an additional committee remuneration of EUR 10,000 for each financial year. The Chair of the Audit Committee of SCHOTT Pharma KGaA's Supervisory Board receives a further EUR 10,000 per financial year.

All amounts apply to a full financial year; where a member has not served for the full financial year, the amounts are reduced pro rata temporis (in full months).

Payment of committee remuneration is subject to the respective committee having fulfilled its duties at a meeting during the respective reporting period.

As of 30 September 2023, the members of the Supervisory Board of SCHOTT Pharma Management AG are Dr Frank Heinricht (Chairman), Dr Jens Schulte (Deputy Chairman), Peter Goldschmidt and Dr Wolfgang Wienand. Dr Frank Heinricht and Dr Jens Schulte served as members throughout the entire reporting period; Peter Goldschmidt and Dr Wolfgang Wienand were members since April 2023.

During the reporting period and exclusively prior to the IPO, members also included Hermann Ditz (January to March 2023), Dr Heinz Kaiser (December 2022 to April 2023) and Dr Jörg Flatten (January to December 2022). All individuals mentioned above are, or were, employees of SCHOTT AG, Mainz, and did not receive any separate remuneration for their activities on the Supervisory Board of SCHOTT Pharma Management AG.

As of 30 September 2023, the members of the Supervisory Board of SCHOTT Pharma KGaA are Peter Goldschmidt (Chairman), Dr Wolfgang Wienand (Deputy Chairman), Ann-Kristin Erkens, Eva Kienle, Christine Wening (employee representative) and Mario Just (employee representative). All of these Supervisory Board members were appointed in April 2023. Peter Goldschmidt and Dr Wolfgang Wienand are also members of the Supervisory Board of SCHOTT Pharma Management AG.

During the reporting period and exclusively prior to the IPO, members also included Dr Jörg Flatten, Thomas Volker Schöning, Oliver Spika (each from November 2022 to April 2023), Kai Olbricht (February to April 2023) as well as Dr Heinz Kaiser, Salvatore Ruggiero and Dr Patrick Markschläger (each from March to November 2022). All individuals mentioned above are employees of SCHOTT AG, Mainz, and did not receive any separate remuneration for their activities on the Supervisory Board of SCHOTT Pharma KGaA.

(in EUR)		Fixed remuneration	Remuneration for committee membership	Total remuneration
SCHOTT Pharma Management AG
Dr. Frank Heinricht1	Chairman	–	-	-
Dr. Jens Schulte1	Deputy Chairman	–	-	-
Peter Goldschmidt		16,667	-	16,667
Dr. Wolfgang Wienand		16,667	-	16,667
SCHOTT Pharma AG & Co. KGaA
Peter Goldschmidt	Chairman	33,333	–	33,333
Dr. Wolfgang Wienand	Deputy Chairman	25,000	–	25,000
Eva Kienle		16,667	3,333	20,000

Overview of remuneration for Supervisory Board members in the financial year 2022/2023:

Ann-Kristin Erkens	16,667	1,667	18,334
Christine Wening	16,667	1,667	18,334
Mario Just	16,667	–	16,667

¹Dr Frank Heinricht and Dr Jens Schulte, members of the Management Board of SCHOTT AG, do not receive any remuneration for their membership of the Supervisory Board of SCHOTT Pharma Management AG

CHANGE IN REMUNERATION FOR THE MANAGEMENT BOARD, COMPARED TO REMU-NERATION FOR EMPLOYEES AND THE SUPERVISORY BOARD

Pursuant to section 162(1) sentence 2 no. 2 AktG, the following table provides an overview of the annual change in the remuneration granted and owed to members of the Management Board and the Supervisory Boards, as well as the development of average remuneration paid to employees and the earnings development of the Company and SCHOTT Pharma Group.

Employee remuneration is based on SCHOTT Pharma KGaA's total workforce comprising all employees in Germany below the Management Board, including all tariff and non-tariff employees as well as senior executives ("leitende Angestellte") but excluding apprentices. For employees who did not work for SCHOTT Pharma KGaA in Germany throughout the financial year, remuneration is extrapolated to 12 months. Remuneration is determined based on fulltime equivalents.

The limitation to only include staff employed in Germany is due to different salary levels worldwide; it also reflects the fact that the two members of the Management Board have their place of work in Germany and are resident there.

Besides the base salary, average remuneration of the total workforce includes fringe benefits, add-on payments, bonuses and variable remuneration which may fluctuate due to their very nature, depending on actual target achievement.

Earnings development is presented based on revenues and EBITDA of SCHOTT Pharma Group as well as profit for the period (in accordance with the HGB) of SCHOTT Pharma KGaA – key performance indicators for SCHOTT Pharma KGaA and SCHOTT Pharma Group. Furthermore, revenues and EBITDA form part of financial targets to determine variable remuneration for members of the Management Board and numerous employees within the overall workforce. These indicators therefore have a material impact upon the level of remuneration. Revenues of SCHOTT Pharma Group are shown below. In the financial year 2022/2023, revenues of SCHOTT Group were relevant for remuneration of the Management Board members.

Change in earnings performance compared to the change in remuneration for the Management Board, employees

and the Supervisory Board
	2022/2023		2021/2022
		Change in %		Change in %
Earnings performance (in EUR millions)
SCHOTT Pharma Group revenues	898.6	9.4	821.1	–
SCHOTT Pharma Group EBITDA	239.0	8.8	219.7	–
SCHOTT Pharma KGaA profit for the pe riod (HGB)	43.5	71.3	25.4	–
Average employee remuneration (in EUR)
Total workforce in Germany (excluding the Management Board)	68,194	7.3	63,556	–
Current member of the Management Board (in EUR)
Andreas Reisse	729,056	10.1	662,047	–
Dr. Almuth Steinkühler1	410,695	104.6	200,775	–

Current Members of the Supervisory Board 3 (in EUR)
Dr. Frank Heinricht2	–	–	–	–
Dr. Jens Schulte2	–	–	–	–
Peter Goldschmidt	50,000	–	–	–
Dr. Wolfgang Wienand	41,667	–	–	–
Eva Kienle	20,000	–	–	–
Ann-Kristin Erkens	18,334	–	–	–
Christine Wening	18,334	–	–	–
Mario Just	16,667	–	–	–

¹Joined SCHOTT Group on 1 February 2022.

²Dr Frank Heinricht and Dr Jens Schulte, members of the Management Board of SCHOTT AG, do not receive any remuneration for their membership of the Supervisory Board of SCHOTT Pharma Management AG.

³The former members of the Supervisory Board named in the remuneration report are or were employees of SCHOTT AG and did not receive separate remuneration for their work on the Supervisory Board. Accordingly, these persons are not shown in the overview.

OUTLOOK: NEW REMUNERATION SYSTEM FROM THE FINANCIAL YEAR 2023/2024

The new remuneration system for the Management Board was adopted by the Supervisory Board of SCHOTT Pharma Management AG and duly acknowledged by the Supervisory Board of SCHOTT Pharma KGaA on 27 July 2023. It will be submitted to limited liability shareholders for approval at the Annual General Meeting on 18 March 2024.

The new remuneration system for the Management Board of SCHOTT Pharma Management AG is based on the following principles:

Implement the corporate strategy	The remuneration of Management Board members creates incentives for the implementation of SCHOTT Pharma Group's worldwide corpo rate strategy.
Generate profitable growth	The Management Board members' variable remuneration depends upon SCHOTT Pharma Group's growth and profitability to a significant extent.
Create long-term value	Key factors for Management Board remuneration are value creation and sustainability, especially over the long term.
Renumeration linked to performance	Remuneration is directly linked to Management Board members' perfor mance. A high share of variable components means that remuneration is geared towards the Company's success.
Foster sustainable action	Remuneration of Management Board members underscores SCHOTT Pharma Group's commitment to environmental, social and governance (ESG) aspects.
Safeguard regulatory compliance	The remuneration of Management Board members is designed to com ply with legal provisions for listed companies as well with the recommen dations of the GCGC as amended.

The new remuneration system comprises both external (horizontal) and internal (vertical) comparisons to assess whether remuneration is appropriate.

The new remuneration system for the Management Board will comprise both fixed and variable remuneration components. Besides the STI component, which will exclusively relate to the performance of SCHOTT Pharma Group in the future, a remuneration component providing long-term incentives will be introduced (LTI component).

Furthermore, the remuneration system includes provisions for reducing or reclaiming variable remuneration (malus and clawback regulations) as well as rules governing permitted maximum remuneration and transactions relevant to remuneration.

Total remuneration for members of the Management Board has comprised the following components since 1 October 2023.

Structure of total Management Board remuneration
Maximum remuneration pursuant to section 87a AktG
Malus and clawback rules
	30%	LTI	Term: 4 years	Focus: • Create long-term value • Foster sustainable action
Variable remuneration	20%	STI	Term: 1 year	Focus: • Generate profitable growth
Fixed remuneration	50%	• Fixed annual salary • Fringe benefits • Pension benefits

For periods starting after 1 October 2023, the STI plan for Management Board members will relate exclusively to the performance of SCHOTT Pharma Group. For this purpose, the Supervisory Board of SCHOTT Pharma Management AG sets ambitious target values, threshold values and caps. Oriented on the expected medium-term business development of SCHOTT Pharma Group, these indicators foster the Company's long-term business performance.

Overview of the STI plan
Category	Performance criterion	Weighting
Growth	Revenue growth	40 %
	ROCE	30 %
Profitability	EBITDA	30 %
	✓ Target achievement capped at 200% for individual targets
Disbursement		✓ Disbursement capped at 150% of target amount
Malus/clawback		✓ Malus and clawback rules have been defined.

The LTI plan for members of the Management Board has been newly introduced in the format of a performance share plan for periods starting after 1 October 2023. For this purpose, the Supervisory Board of SCHOTT Pharma Management AG sets ambitious target values each year, together with corresponding threshold values and caps, to foster the Company's longterm business performance with a focus on value creation, sustainability and the strategic orientation of SCHOTT Pharma Group.

Deviating from the manner set out below, the starting share price for the first tranche is determined by reference to the arithmetic mean for the first 90 exchange trading days, starting with the listing date of 28 September 2023.

Mainz, Germany, 18 December 2023

SCHOTT Pharma AG & Co. KGaA

For the Supervisory Board	For the Management Board
Peter Goldschmidt	Andreas Reisse	Dr	Almuth
	Steinkühler

Report of the independent auditor on the audit of the remuneration report pursuant to Sec. 162 AktG

Independent auditor's report

To SCHOTT Pharma AG & Co. KGaA

We have audited the attached remuneration report of SCHOTT Pharma AG & Co. KGaA, Mainz, prepared to comply with Sec. 162 AktG ["Aktiengesetz": German Stock Corporation Act] for the fiscal year from October 1, 2022 to September 30, 2023 and the related disclosures.

Responsibilities of the executive directors and the supervisory board

The executive directors and supervisory board of SCHOTT Pharma AG & Co. KGaA are responsible for the preparation of the remuneration report and the related disclosures in compliance with the requirements of Sec. 162 AktG. In addition, the executive directors and supervisory board are responsible for such internal control as they determine is necessary to enable the preparation of a remuneration report and the related disclosures that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express an opinion on this remuneration report and the related disclosures based on our audit. We conducted our audit in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the remuneration report and the related disclosures are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts in the remuneration report and the related disclosures. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the remuneration report and the related disclosures, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the preparation of the remuneration report and the related disclosures in order to plan and perform audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the accounting policies used and the reasonableness of accounting estimates made by the executive directors and the supervisory board, as well as evaluating the overall presentation of the remuneration report and the related disclosures.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion, on the basis of the knowledge obtained in the audit, the remuneration report for the fiscal year from October 1, 2022 to September 30, 2023 and the related disclosures comply, in all material respects, with the financial reporting provisions of Sec. 162 AktG.

Other matter – formal audit of the remuneration report

The audit of the content of the remuneration report described in this auditor's report comprises the formal audit of the remuneration report required by Sec. 162 (3) AktG and the issue of a report on this audit. As we are issuing an unqualified opinion on the audit of the content of the remuneration report, this also includes the opinion that the disclosures pursuant to Sec. 162 (1) and (2) AktG are made in the remuneration report in all material respects.

Limitation of liability

The "General Engagement Terms for Wirtschaftsprüfer and Wirtschaftsprüfungsgesellschaften [German Public Auditors and Public Audit Firms]" as issued by the IDW on January 1, 2017, which are attached to this report, are applicable to this engagement and also govern our responsibility and liability to third parties in the context of this engagement.

Eschborn/Frankfurt am Main, December 18, 2023

Ernst & Young GmbH

Wirtschaftsprüfungsgesellschaft

Baur Behr

Wirtschaftsprüfer Wirtschaftsprüferin

[German Public Auditor] [German Public Auditor]