Compensation governance

Figure 1: Compensation governance at SIG.

The compensation governance structure at SIG involves three primary bodies, as depicted in Figure 1: (1) the Board, (2) the Compensation Committee, acting in an advisory capacity for the Board, and (3) SIG’s shareholders at the Annual General Meeting (“AGM”). The Compensation Committee Charter and the Articles of Association outline and define the roles and responsibilities of these bodies. Figure 2 shows the most relevant provisions on compensation in the Articles of Association.

Figure 2: Relevant provisions on compensation in the Articles of Association of SIG.

The Articles of Association can be found on the SIG home page for investors: https://www.sig.biz/investors/en/governance/articles-of-association, or downloaded directly here: https://api.sig.biz/media/e33d0ovl/sig-group-ag-articles-of-association.pdf

The roles of the AGM and the Compensation Committee are described in more detail in the following paragraphs. The general split and delegation of responsibilities and authorities between the Board, the Compensation Committee and the AGM is illustrated in Figure 3.

Figure 3: Authority table regarding compensation.

Role of the shareholders – shareholder engagement

In line with SIG’s Articles of Association, particularly Art. 11 and Art. 27, the Board will submit three separate compensation-related resolutions for shareholder approval at the AGM in April 2026, as illustrated in Figure 4:

Figure 4: Overview of votes at the 2026 AGM.

Board of Directors and Executive Management

The Corporate Governance report provides a detailed overview of the composition of the Board of Directors as well as the Group Executive Board, including biographies of the current members.

Composition of the Compensation Committee

The Compensation Committee consists of three independent, non-executive Board members who are elected annually and individually by the Annual General Meeting for a one-year term until the following Annual General Meeting.

At the Annual General Meeting 2025, Werner Bauer was re-elected and the Board of Directors confirmed him to be the Chair of the Compensation Committee for the term from the AGM 2025 to the AGM 2026. Wah-Hui Chu and Matthias Währen did not stand for re-election as members of the Compensation Committee. Their seats in the Compensation Committee have been taken over by Niren Chaudhary and Urs Riedener, who were elected as new members of the Compensation Committee by the Annual General Meeting 2025.

Role of the Compensation Committee and activities during 2025

The main role of the Compensation Committee is to assist the Board in fulfilling its responsibilities relating to the compensation of the members of the Board and the Group Executive Board of SIG. The Compensation Committee supports the Board in discharging its duties; proposes guidelines regarding the compensation of the members of the Board, the Chief Executive Officer (“CEO”) and the other members of the Group Executive Board; proposes the maximum aggregate amounts of compensation to be submitted to the Annual General Meeting for approval; and assists the Board in preparing the related motions for the Annual General Meeting.

The Compensation Committee Chair ensures that the Board members are kept informed in a timely and appropriate manner of all material matters within the Compensation Committee’s area of responsibility.

The Compensation Committee Chair convenes the meetings of the Compensation Committee as often as the business affairs of SIG require, but at least three times a year. In 2025, the Compensation Committee held eleven meetings. Some of the meetings were held as video conferences or hybrid meetings. All meetings in 2025 had full attendance by all members of the Compensation Committee. The topics covered in the meetings are described in Figure 5. The Corporate Governance Report provides a detailed overview of the timing of the meetings.

Figure 5: Topics covered by the Compensation Committee in 2025.

A performance review of the Board, the Committees and the Group Executive Board was conducted by the Nomination and Governance Committee during 2025, with some members of the Compensation Committee in attendance to ensure close coordination.

The Compensation Committee may ask members of the Group Executive Board, one or more senior managers in the People & Culture function and third parties to attend meetings in an advisory capacity and may provide them with appropriate information. However, the Compensation Committee also regularly holds private sessions (i.e. without the presence of members of the Group Executive Board, senior managers or third parties). Further, all members of the Board may attend any Compensation Committee meeting as guests. The Chair of the Board and the members of the Group Executive Board did not attend the meeting when their own compensation and/or performance was discussed. The Chair of the Compensation Committee reported to the Board after each meeting on the substance of the meeting and explained the proposals of the Compensation Committee to the Board. The documents and minutes of Compensation Committee meetings are available to all members of the Board.

The Compensation Committee may decide to consult external advisers on specific compensation matters. In 2025, the Compensation Committee appointed HCM International Ltd. (“HCM”) as an external independent adviser on certain compensation matters including on target setting for the Long-Term Incentive Plan, as described in the section Long-Term Incentive Plan. Furthermore, Algofin AG (“Algofin”) was engaged in numerous design and valuation matters with regard to the relative TSR for the Long-Term Incentive Plan. Apart from the aforementioned advice, HCM or Algofin were not appointed for any other mandates in 2025.

Shareholder engagement

A recurring topic from the shareholder outreach is the ESG component in the variable compensation which was further reviewed by the Compensation Committee in the course of 2025. A strong focus on ESG matters is integral to SIG’s business strategy and activities, and the compensation framework has for some years included a sustainability metric linked to our EcoVadis score¹. This score reflects SIG’s performance in the areas of environment including climate change and greenhouse gas emission reductions along the value chain, labor and human rights, ethics and sustainable procurement, and encompasses a comprehensive view on ESG matters with relevance for all SIG stakeholders. The Compensation Committee decided to keep the ESG KPI with the EcoVadis score as part of our STIP. This rating reflects the broad scope of overarching ESG activities of the Company and requires reaching high performance levels to enable the leading position.

1 EcoVadis is regarded as a global leader in business sustainability assessments and has rated over 150,000 companies (https://ecovadis.com/). For further information on the EcoVadis Medals and methodology, please start at SIG’s recognition page https://recognition.ecovadis.com/CZvKdybObUqy8pIBfhc1AQ. SIG chose to use the EcoVadis aggregated score methodology, rather than selected KPIs, as it reflects the impact of all ESG-related KPIs and the sustainability approach related to implemented policies, actions and results. The SIG-specific KPIs influencing the score are aligned with strategic priorities across the value chain and operations. In the value chain, examples include reducing greenhouse gas emissions in line with climate science for Scope 1, 2 and 3 emissions and maintaining high standards of responsible sourcing for key commodities. Within the operations, KPIs include sustaining 100% renewable electricity usage and reducing lost-time injury cases. For People and Culture, they encompass metrics such as increasing diversity in leadership positions and employee training programs.