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1、Compensation Report63 Shareholder letter from the Chair of the Human Capital&ESG Committee64 Executive Committee and Board compensation at a glance65 Executive Committee compensation75 Board of Directors compensation79 Compensation governance85 Audit report for the Compensation ReportOverviewFinanci

2、al ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 202462Shareholder letter from the Chair of the Human Capital&ESG CommitteeUrs Riedener,Chair of the Human Capital&ESG Committee2024 in summaryAt the beginning of 2024,the Board set targets for the first time

3、under the Annual Incentive and Long-Term Performance Plan.The targets were set to reward the delivery of the Sandoz investment case that was presented to shareholders in advance of Sandozs spin off from its former parent company.Sandoz delivered strong results in its first full year as an independen

4、t company.Sales grew by 9%in constant currencies,reflecting the double-digit performance in North America and strong growth in the Europe and International regions.The Core EBITDA margin grew to 20.1%.The shift of the portfolio mix in favor of biosimilars has been accelerated by the launches of Hyri

5、moz,Pyzchiva,and Tyruko.Shareholders saw a 37%increase in the share price in 2024,alongside a total return of 39%.This success was reflected in the CEOs Annual Incentive payout of 160%of target and payout for Keep Whole and Refill LTPP Awards relating to the 2022-24 performance cycle of 145%of targe

6、t more details are in sections 2.4.2 and 2.4.3 of this report.The first Sandoz LTPP award for the 20242026 performance cycle vests in February 2027.As outlined elsewhere in this Integrated Annual Report,Remco Steenbergen was recruited externally to replace Colin Bond as Chief Financial Officer durin

7、g 2024.The Committees compensation-related decisions associated with this transition were consistent with Sandoz policy and,where relevant,contractual terms,incentive plan rules and the Swiss Code of Obligations.As a result of leaving his former employer,he forfeited compensation,which Sandoz replac

8、ed on a like-for-like or more stringent basis to the forfeited entitlements.Full details are outlined in section 2.3.1 of this report.The Committee decided to enhance disclosure in this Compensation Report to include targets under the 2024 Annual Incentive of the CEO and other Executive Committee me

9、mbers,and targets under the spin-off related Keep Whole and Refill LTPP Awards for the 15 month performance period ending on December 31,2024.Detailed information on the CEOs 2024 strategic objectives is also disclosed.2025 Executive Committee compensation frameworkThe Board and the HC&ESGC reviewed

10、 the Companys rewards framework to determine that it continues to be relevant and aligned to the business strategy.The Annual Incentive plan design was determined to be appropriate given the Companys continued focus on increasing profitability and revenue while ensuring a healthy cash flow.The Board

11、 decided to replace the financial metric“Core EBITDA margin”by“Core Return on Invested Capital(ROIC)”for the 2025-2027 LTPP to eliminate the overlap of Core EBITDA margin in the Annual Incentive and Long-Term Performance Plan(LTPP).This change will provide a clearer assessment of how effectively res

12、ources are being utilized to generate value and was supported by shareholders at investor governance roadshows in late 2024.Further details are provided later in this report.I am deeply grateful to all our shareholders for their trust and investment in Sandoz.I welcome any further feedback and look

13、forward to your support at the 2025 AGM.Yours sincerely,Urs Riedener Chair of the Human Capital&ESG CommitteeDear Shareholders,On behalf of the Board and the Human Capital&ESG Committee(HC&ESGC)of Sandoz,I am pleased to present the Compensation Report for the year ended December 31,2024.This is our

14、first full year Compensation Report,which is compliant with Swiss law.The Compensation Report covering the period from October 4(spin date)to December 31,2023,received strong support and was approved by 88%of shareholders at the 2024 AGM.I would like to thank shareholders that provided helpful feedb

15、ack as the HC&ESGC designed and finalized its compensation framework and disclosure approach forSandoz.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 2024631,2223962,1603,0686,846Base SalaryRichard Saynor(CEO)CHF 000sPension and other benef

16、its2024 Annual Incentive2024-2026 LTPP grantVesting 0200%of target,subject to performanceTotal1.Executive Committee and Board compensation at a glanceSummary of compensation arrangements for the Executive CommitteeFrameworkThe compensation of the members of the Executive Committee consists of fixed

17、and variable compensation.Details are set out in the table below.Exhibit 1.1:Structure of Executive Committee compensationStructure Component PurposeFixed compensation Annual Base Salary Reflects the individuals responsibility,skills and benefits and experience Pension and other benefits Provides ap

18、propriate savings for retirement,risk insurance and other benefits applicable in the local marketVariable compensation Annual Incentive Rewards achievement of short-term financiallinked to performance and ESG objectives related to the business strategy.CEO also has strategic objectives Long-Term Per

19、formance Plan Drives long-term alignment with shareholder (Performance Share Units)value;equity-based and subject to achievement of long-term performance conditions2024 CEO compensationThe exhibit below presents the 2024 CEO compensation.The Annual Incentive shown is for the 2024 performance year.Th

20、e Long-Term Performance Plan(LTPP)is the value of the conditional awards granted in 2024 subject to performance conditions and continued employment over the vesting period of 2024 to 2026.Exhibit 1.2:2024 CEO compensation Summary of compensation arrangements for the Board of DirectorsFrameworkThe co

21、mpensation of the members of the Board of Directors consists of fixed fees only,with no variable incentive components.Fees comprise a fixed fee for Board of Directors membership.Additional fixed fee(s)are payable to the Vice-Chair as well as to the chairs and members of Board committees.The Board Ch

22、air and the other members of the Board receive at least 50%of their fees in the form of unrestricted ordinary Sandoz shares,to allow them to build and retain a significant shareholding in Sandoz,following Sandoz share ownership guidelines.They may choose to receive more than 50%of their fees in Sand

23、oz shares.The fees in shares are delivered in two installments in arrears,with the remainder in cash paid in four installments in arrears.The Board fees are paid in Swiss francs(see details in section 3.1 Compensation Policy for the Board of Directors).Exhibit 1.3:Structure of Board compensation Add

24、itional fees Fee for Member AGM 2024-25 fees Board Chair Chair HC Chair Member HC&Member CHF membership Vice-Chair ARCC 1&ESGC 1 SIDC 1 ARCC 1 ESGC 1 SIDC 1Board Chair 850,000 Other members of the Board 200,000 50,000 60,000 50,000 50,000 40,000 30,000 30,000 1 Board Committees:“ARCC”Audit,Risk and

25、Compliance Committee;“HC&ESGC”Human Capital&ESG Committee;“SIDC”Science,Innovation and Development Committee.2024 Board compensation The table below presents the total compensation earned by the members of the Board of Directors during 2024.Exhibit 1.4:2024 Board compensation Board of Directors fees

26、 CHF Fees in cash Fees in shares Other payments 1 Total in 2024 Total fees 1,233,000 1,886,166 46,303 3,165,469 1 Other payments includes mandatory social security contributions for all members of the Board of Directors.It includes also mandatory contributions to the Swiss minimum legally required p

27、ension plan for the Board Chair.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 2024642.Executive Committee compensation2.1 Compensation philosophy and principles for the Executive Committee 2.1.1 Compensation philosophySandozs ambition is t

28、o be the worlds leading biosimilars and generics company.The total rewards packages allow Sandoz to attract and retain top talent in a highly competitive market.Compensation is aligned to the business performance objectives and values.The compensation framework encourages entrepreneurship while dete

29、rring excessive risk-taking that might achieve short-term financial gain while undermining the long-term health of the Company.Compensation principles:Competitive Total Rewards Sandoz provides competitive compensation and benefits required to compete for top talent.Benefits are competitive to local

30、market practice and include retirement,insurance,and social benefits as well as local perquisites.The elements of Total Rewards are aligned to Company strategy and culture.Pay for Performance All employees have variable pay linked to Company and individual performance.Executive Committee members rec

31、eive a significant proportion of their pay as variable compensation that is linked to Company performance.Ethics and Values Business results are achieved through ethical practices,reflected also in the Sandoz Values and the Code of Ethics.Malus and clawback apply where incentive compensation is earn

32、ed in a manner contravening the law,internal policies or guidelines.Shareholder Alignment Executive Committee members receive the highest proportion of their pay in Sandoz equity to align with shareholder interests.They must meet minimum share ownership requirements(see section 2.2.8 Share ownership

33、 guidelines).2.1.2 Benchmarking Executive Committee compensationSandoz requires top executive talent with deep expertise,the requisite competencies and proven performance within the healthcare industry(generics,biosimilars,pharma,consumer health).Significant competition exists for top global executi

34、ve talent in Sandozs sector,particularly in the US,which is an important source of talent and a strategic growth market.The HC&ESGC and Board refer mainly to two peer groups of companies.The primary peer group comprises European headquartered companies,where the pay of Executive Committee roles is t

35、argeted at the median to 75th percentile,considering global talent competition.For roles that are based in the US or have a strong US focus,the HC&ESGC considers a secondary peer group of US-headquartered companies to ensure competitiveness.This secondary group is also used for broader global refere

36、ncing of compensation competitiveness.The primary and secondary peer groups selected by the Board include companies in competing industry groups(generics,biosimilars,pharma,other healthcare)and some broader consumer goods companies.While the companies vary in size,peer groups are chosen ensuring San

37、doz is close to median in size and scale against the group when assessed against a broad basket of metrics(revenue,scale of global operations,number of employees and market capitalization).As a further reference point to complement the two peer groups,the HC&ESGC also has access to compensation data

38、 from a broad European pan-sector set of companies of a similar size and scale to Sandoz.Benchmarking data is just one point of reference for the HC&ESGC and Board,to ensure pay remains competitive.They also consider the pay of the wider workforce,in particular when determining increases for the Exe

39、cutive Committee.The peer groups are reviewed annually to ensure relevance,and the Board decided no changes were required for 2024.Exhibit 2.1.2:Executive Committee compensation peer groupsEurope(Primary peer group)US(Secondary peer group)Alcon SA Amgen IncBeiersdorf AG Bausch Health Companies IncDa

40、none SA Baxter International IncEssity AB Biogen IncFresenius Medical Care AG Catalent IncGivaudan SA Colgate-Palmolive CompanyGlanbia plc ICON Public LtdGSK plc Newell Brands IncHaleon plc Organon&CoHikma Pharmaceuticals plc Perrigo Company plcIpsen Pharma SA The Clorox CompanyJazz Pharmaceuticals

41、plc Viatris IncLonza Group AG Zoetis Inc Merck KgaASmith&Nephew plc UCB SATeva Pharmaceutical Industries Ltd OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 2024652.2 Compensation framework for the Executive Committee2.2.1 Compensation overv

42、iewThe compensation of the members of the Executive Committee consists of fixed and variable compensation elements.Fixed compensation comprises the base salary as well as participation in local benefit programs.Variable compensation comprises annual and long-term incentive awards,which are granted o

43、n an annual basis.Details are set out in the following table.Exhibit 2.2.1.1:Structure of Executive Committee compensation Purpose Vehicle Target opportunity Performance metricsAnnual Base Reflects the individuals Cash Not applicable Not applicable.Salary responsibility,skills,However,increases and

44、experience take into account individual performance and development in rolePension and Provides retirement Tailored Retirement benefit Not applicableother benefits savings,risk insurances,to local provisions are and other benefits market consistent with other practices employees in the same and mark

45、et.Risk insurances regulations and other benefits depend on local practice Annual Rewards achievement Cash Target Annual Incentive Annual financial Incentive of annual financial and is determined as a and ESG objectives.ESG goals from the percentage of base CEO also has business plan salary(see belo

46、w).strategic objectives Actual payout is based on performance,between 0%200%of target Long-Term Ensures long-term Equity Target LTPP award is Three-year performance Performance alignment with determined as a period with metrics Plan(LTPP)shareholder value percentage of base related to financial,and

47、accountability salary(see below).innovation and ESG for long-term financial Actual vesting is based objectives,cliff vesting success on performance,at expiry of performance between 0%200%of period target The overall balance between fixed and variable components of the compensation of the Executive C

48、ommittee reflects the Companys strong focus on performance and ensures alignment with shareholders long-term interests.The table below shows the ratios of fixed and variable compensation of the CEO and other members of the Executive Committee,both at target and maximum opportunity.The ratios shown a

49、re on an annualized basis assuming the target and maximum compensation based on fixed and variable compensation as on December 31,2024.Exhibit 2.2.1.2:2024 Executive Committee pay ratios Fixed vs.variable Fixed vs.variable compensation at target payout compensation at maximum payout Fixed Variable F

50、ixed Variable Members of the Executive Committee compensation 1 compensation 2 compensation 1 compensation 2Chief Executive Officer 22%78%12%88%Other nine members(range)25%31%69%75%14%19%81%86%1 Includes base salary,excludes retirement,insurance,and other benefits.2 Includes the 2024 Annual Incentiv

51、e and LTPP 2024-2026 awards.2.2.2 Fixed compensation elements and benefitsThe Annual Base Salary is a fixed compensation element.It is reviewed annually considering the market value of the role and benchmark information of peer companies as well as individual development of the incumbents in their r

52、oles,their performance,macroeconomic conditions,and other relevant factors.The members of the Executive Committee are enrolled in local benefit plans for retirement income savings,insurance for disability and loss of life.These plans are in line with local legislation and market practice.2.2.3 Annua

53、l IncentiveAnnual Incentive awards are provided to members of the Executive Committee.The payout of the Annual Incentive award for Executive Committee members depends on the level of achievement of Company annual financial and ESG objectives related to the business strategy.The CEO also has strategi

54、c objectives.The awards are offered on an annual basis and are payable in the year following the performance period.The Executive Committee Annual Incentive is based on the following Company financial and ESG(Access)metrics:Exhibit 2.2.3.1:2024 Annual Incentive award performance metricsPerformance m

55、etrics Weight Net sales%growth(in constant currencies)30%Core EBITDA margin(as reported)30%Free cash flow(reported USD)30%ESG Access:Number of patients treated with Sandoz biosimilars 10%The overall performance assessment of the CEO is based on achievements of Group financial and ESG performance met

56、rics,and individual strategic objectives set by the Board.The overall performance assessments of the other members of the Executive Committee are based on achievements of Group financial and ESG performance metrics,and on their individual contributions to overall Company performance,including role m

57、odelling of Sandoz Values and culture.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 202466The Board for the CEO and the HC&ESGC for the other members of the Executive Committee make the final assessment of performance and payout,within the

58、 following ranges:Exhibit 2.2.3.2:2024 Annual Incentive payout ranges Final assessment Payout(%of target Annual Incentive)Outstanding 170%200%(cap)Exceeds expectations 130%160%Meets expectations 90%120%Below expectations 0%90%The Annual Incentive target values for members of the Executive Committee

59、as part of their compensation packages are as follows:Exhibit 2.2.3.3:2024 Target Annual Incentive awards Target Annual Incentive Position(payout based on performance between 0%200%of target,capped)Chief Executive Officer 110%of Annual Base SalaryOther nine members 80%100%of Annual Base Salary1of th

60、e Executive Committee 1 Increase in upper limit of the range due to appointment of the new CFO.Range for other members of the Executive Committee remained unchanged versus the prior year.For each Annual Incentive cycle,the calculated payments resulting from achievements against applicable objectives

61、 are reviewed by the HC&ESGC(and for the CEO,by the Board)and an assessment is made as to whether they are a fair reflection of the performance of the Company and the individual.If appropriate,payments may be adjusted downward(including to zero)or,in unusual circumstances,upward(but subject to the o

62、verall plan limits set out above,with the rationale disclosed to shareholders).2.2.4 Long-Term Performance PlanUnder the Long-Term Performance Plan(LTPP)members of the Executive Committee as well as senior leaders are eligible to receive a target number of Performance Share Units(PSUs)on the date of

63、 grant.These PSUs are contingent rights to receive,at the end of a three-year cliff-vesting period(at the vesting date),a certain number of shares,which may be higher or lower than the target number of PSUs contingent upon performance achievements.The target value of the PSUs granted as a percentage

64、 of salary will depend on the level of responsibility of the executive.The actual number of shares that will eventually be received at vesting will depend on the extent that pre-determined performance conditions have been met and is subject to continued employment.PSUs carry dividend equivalents tha

65、t are paid in shares at the time of vesting of the LTPP award.The CEO and CFO will be required to hold the shares vesting under the LTPP(net of applicable tax and social security withholdings)for a minimum of two years after the vesting date.The LTPP includes financial,innovation,and ESG performance

66、 metrics that align with the strategiclong-term objectives of Sandoz.The LTPP metrics for the 20242026 performance cycle are as follows.Exhibit 2.2.4.1:2024-2026 LTPP performance metricsLTPP Performance metrics Weight Financial performance Core EBITDA margin(as reported,end point after 3 years)30%Co

67、re EPS(cumulative 3-year target)30%Innovation%Sales from Biosimilars(as reported,end point after 3 years)20%ESG Environmental Sustainability and Diversity,Equity and Inclusion 20%ESG criteria are divided into two categories:10%on Environmental Sustainability and 10%on Diversity,Equity and Inclusion.

68、Environmental Sustainabilitytargets include objectives related to decarbonization and the environmental impact of production on water systemsat our manufacturing sites.Diversity,Equity and Inclusion performance will be assessed based on the improvement of representation of women in senior leadership

69、,which includes approximately 520 leaders.The LTPP target values for members of the Executive Committee as part of their compensation packages are as follows:Exhibit 2.2.4.2:2024 Target LTPP awards Target LTPP AwardsPosition(Vesting based on performance,0%200%of target,capped)Chief Executive Officer

70、 250%of Annual Base SalaryOther nine members 140%200%of Annual Base Salary1of the Executive Committee 1 Increase in upper limit of the range due to appointment of the new CFO.Range for other members of the Executive Committee remained unchanged versus the prior year.For each LTPP cycle,the potential

71、 payments in shares resulting from achievement against applicable objectives is reviewed by the HC&ESGC and the Board.Before payments are made,an assessment is made as to whether the achievements are a fair reflection of the performance of theCompany.2.2.5 Malus and clawback conditionsAny incentive

72、compensation payable to Executive Committee members is subject to malus and clawback rules.This means that the Board of Directors for the CEO,and the HC&ESGC for the other Executive Committee members,may decide subject to applicable laws to reduce or forfeit any unpaid or unvested incentive compensa

73、tion(malus),or to recover incentive compensation that has been paid or has vested in the past(clawback).This applies in cases where the payout has resulted from a violation of laws or conflicts with internal management standards,including Company and accounting policies.These rules apply to both the

74、 Annual Incentive and LTPP awards.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 2024672.2.6 Employment terms and conditions All Executive Committee members have a 12-month notice period during which they are entitled to their contractual b

75、ase salary,pro rata Annual Incentive,retirement,insurance,and other local benefits.No new LTPP grants are made during the notice period.Members of the Executive Committee may be relocated or assigned to other countries for business purposes.These executives receive relocation support,international b

76、enefits,taxequalization,and perquisites that are in line with the Companys policies for international mobility and transfers.For Executive Committee members that leave due to voluntary resignation or termination by the Company for misconduct or poor performance,all variable compensation elements(Ann

77、ual Incentive and unvested LTPP awards)are forfeited.For Executive Committee members that are determined by the HC&ESGC(for the CEO by the Board)to be“good leavers”,for example in cases of retirement,termination by the Company(forreasons other than performance or conduct)and change of control,the An

78、nual Incentives are prorated for the period of employment and payable at the end of the notice period or upon leaving the Company.In the same events,unvested LTPP awards are released on the original payment or vesting date with no acceleration;however,they are prorated for the period of employment a

79、nd subject to an assessment of the applicable performance conditions.All LTPP awards are subject to forfeiture if a good leaver joins a competitor company as defined in the applicable plan rules,before the original vesting date.In the case of death or long-term disability,full accelerated vesting of

80、 LTPP awards(either based on the performance to date,or,if unavailable,at target level)is applied.In line with the prohibitions on certain types of compensation arrangements outlined in the Swiss Code of Obligations,Executive Committee members are not entitled to any severance payments.2.2.7 Buyout

81、awardsIn order to recruit external talent required for the Executive Committee,the HC&ESGC may decide to replace compensation(including outstanding equity awards)or benefit entitlements that are forfeited when an executive leaves the previous employer to join Sandoz.The buyout is either at or below

82、its commercial value and made on a like-for-like or more stringent basis to the forfeited entitlement,provided in either cash or equity,usually with an equal or longer vesting or blocking period,subject to performance conditions if applicable,continued employment,and malus and clawback provisions.Us

83、e of replacement awards is consistent with market practice and ensures Sandoz is able to attract high-quality external talent.2.2.8 Share ownership guidelinesExecutive Committee members are expected to build and retain a significant shareholding in Sandoz to align their interests with those of other

84、 shareholders.The minimum requirements are as follows:Exhibit 2.2.8:Executive Committee minimum share ownership guidelinesPosition Minimum ownership requirement TimeframeChief Executive Officer 3x Annual Base Salary Within 5 years of appointmentOther members of the 2x Annual Base Salary Within 5 yea

85、rs of appointmentExecutive Committee Unvested PSUs,which are still subject to performance conditions,do not count towards the minimum share ownership requirement.Executive Committee members must retain all Sandoz shares received from the Company until the minimum ownership level is met(net of applic

86、able taxes).The CEO and the CFO are required to hold the shares received under the LTPP for a minimum of two years after the vesting date.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 2024682.3 2024 Joining and leaving members in the Execu

87、tive Committee2.3.1 Appointments and internal changesRemco Steenbergen,Chief Financial OfficerRemco Steenbergen was a Board member until the 2024 AGM,at which he did not stand for re-election.He was appointed as the Chief Financial Officer and member of the Executive Committee as of July 1,2024.His

88、compensation as a Board member is included in the 2024 Board Fees Table(exhibit 3.3.1),and his compensation as CFO is included in the 2024 Executive Committee Compensation Table(exhibit 2.4.1).Remco Steenbergens global business and financial expertise as well as his proven track record as CFO of lea

89、ding global public organizations are key to enable Sandoz to deliver growth,margin expansion and sustainable attractive shareholder returns.As a result of leaving his previous employer to join Sandoz,Remco Steenbergen forfeited compensation,including the cash bonus for financial year 2024,all outsta

90、nding long-term incentive(LTI)awards granted since 2021,contributions to the defined benefit occupational pension plan with guaranteed minimum payment,as well as other executive benefits.In line with the Sandoz policy on buyout awards(refer to section 2.2.7),and in accordance with the Swiss Code of

91、Obligations permitting compensation to offset a verifiable financial disadvantage,the Board of Directors decided to provide for a one-off buyout award for forfeited entitlements,except for the executive benefits.At the time of designing the buyout award,the HC&ESGC ensured a strong alignment with sh

92、areholder interests by focusing on long-term and equity compensation elements,while granting a buyout award of equivalent commercial value of the forfeited entitlements.The structure of the buyout award mirrors the vesting schedules of the forfeited compensation at the former employer(“like-for-like

93、”)and is mostly delivered in form of equity,thus its value depends on the evolution of the Sandoz share price.Further,the entire buyout award is subject to malus and clawback provisions that allow the Board of Directors to reduce or forfeit any unpaid or unvested compensation element(malus)or to rec

94、over any paid or vested compensation(clawback)in case of violation of law or conflict with internal management standards,including Company and accounting policies.The buyout award is structured as follows:CashThe forfeited cash bonus for the pro-rata period January June 2024 was replaced on a like-f

95、or-like basis at target level with a CHF 407,000 cash payment(equivalent commercial value).EquityForfeited elements Value or number Number of Replacement at former employer of units forfeited units granted1 value(CHF)Vesting year Vesting conditions CommentsLTI 20212024 138,714 PSUs 39,290 PSUs 1,274

96、,961 2025 Prior employer performance Replacement on like-for-like basisLTI 20222025 157,143 PSUs 44,510 PSUs 1,444,350 2026 LTPP 20232025 metrics Vesting date mirrors vesting date of forfeited awardLTI 20232026 149,738 PSUs 42,410 PSUs 1,376,205 2027 LTPP 20242026 metrics For the first cycle,as Remc

97、o Steenbergen worked at his former employer for 3.5 out of 4 years of and continued employment the performance period,the HC&ESGC decided the payout of the former employer will apply applies for all buyout grants For the second and third cycles,Sandoz performance conditions will applyDefined benefit

98、 CHF 400,000 49,306 RSUs 1,600,000 50%2027 Continued employment and Replacement on like-for-like basis with the following additionally stringent conditions:pension scheme per annum 50%2029 share price evolution No minimum guaranteed amount as value can go up or down depending on share price evolutio

99、nwith guaranteed CHF 1,600,000 Longer vesting period than the benefit replaced minimum payout over 4-year Partial compensation for a limited period period Stricter vehicle,as Board can apply malus and clawback if requiredTotal in equity 175,516 5,695,516 1 Number of Sandoz equity units was calculate

100、d based on the average closing share price of both the former employer and of Sandoz over the same 3-month time period during offer discussion.Other benefitsRemco Steenbergen was eligible for other contractual benefits at his previous employer.While recognizing that the value of these benefits is co

101、nsiderable and that Sandoz offers no equivalent,theHC&ESGC decided not to provide any compensation for those.The full grant value of the buyout award is disclosed in the compensation table in this Compensation Report and is covered within the aggregate compensation amount approved by the shareholder

102、s forthe Executive Committee for financial year 2024.Use of the supplementary amount defined in the Articles of Incorporation of Sandoz for the compensation of members of the Executive Committee who are appointed after the shareholder vote on the aggregate compensation amount was not required.Overvi

103、ewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 202469Rebecca Guntern,Chief Commercial OfficerRebecca Guntern,the former President Europe,changed role within the Executive Committee and was appointed Chief Commercial Officer effective September 1,

104、2024.Christophe Delenta,President EuropeChristophe Delenta was promoted internally as President Europe and joined the Executive Committee effective September 1,2024.2.3.2 DeparturesColin BondColin Bond,previously the Chief Financial Officer,retires from the Company on January 31,2025,in line with th

105、e statutory and Swiss contractual retirement age in Switzerland(65 years).To ensure a successful transition to a new CFO,he stepped down from the Executive Committee on July 1,2024.All payments made to Colin Bond from his step-down date until his retirement date are in line with his employment contr

106、act,incentive plan rules and the Swiss Code of Obligations.In line with our policy on Executive Employment terms(see Section 2.2.6),he is entitled to his contractual base salary,pro rata Annual Incentive,continued contributions to the pension and insurance plan,and other local benefits during the se

107、ven-month period up to retirement.No severance payments were or will bemade.Outstanding equity awards will vest on a pro-rata basis as per the original vesting schedule and inaccordance with the relevant plan rules.These awards will continue to be subject to performance conditions as well as malus a

108、nd clawback provisions.No new LTPP grants are made after the step-down date.Pierre BourdagePierre Bourdage,previously Chief Commercial Officer,decided to step down from his role and the Executive Committee due to personal health reasons on August 31,2024.His employment contract is subject to a one-y

109、ear notice period,which will end on September 1,2025.All payments made to Pierre Bourdage during his notice period are in line with his employment contract and incentive plan rules and the Swiss Code of Obligations.In line with our policy on Executive Employment terms(seeSection 2.2.6),he is entitle

110、d to his contractual base salary,pro rata Annual Incentive,continued contributions to pension and insurance plans,and other local benefits up to the expiry of the contract and end of employment.No severance payments were or will be made.Outstanding equity grants will vest on a pro-rata basis as per

111、the original vesting schedule and in accordance with the relevant plan rules.These awards will continue to be subject to performance conditions as well as malus and clawback provisions.No new LTPP grants are made after the step-down date.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernan

112、ce,Compensation&RiskIntegrated Annual Report 2024702.4 2024 Compensation for the Executive Committee2.4.1 2024 Executive Committee compensation The aggregate compensation paid or promised to the members of the Executive Committee during the financial year 2024 was CHF 37,082,699 as set out in exhibi

113、t 2.4.1 2024 Executive Committee compensation.This amount is within the budget approved by the single shareholder of Sandoz prior to spin-off.The table below includes for the Executive Committee the Annual Base Salary paid in 2024,Annual Incentive paid in cash for the 2024 performance year,grant val

114、ue of Performance Share Units for LTPP granted in 2024 for the 2024-2026 performance cycle(vesting subject to performance conditionswith payout range 0200%),pension and other benefits.Exhibit 2.4.1:2024 Executive Committee compensation Total in 2023 Fixed compensation Variable compensation Additiona

115、l compensation Total 2024 Ratio(Oct 4Dec 31)Annual Retirement,Annual Incentive LTPP awards Total Fixed/Variable Total Base Salary insurance benefits 1,2 2024 20242026 3 Other benefits 4 Buyout 5 compensation 6 compensation 7 compensation 8Executive Compensation Amount Amount Amount PSU value CHF in

116、cash value in cash at grant Amount Amount Amount%Amount Richard Saynor (CEO)1,222,500 176,334 2,159,520 3,067,521 220,044 6,845,919 21%/79%899,864 Remco Steenbergen (CFO,highest paid,from July 1,2024)485,000 86,221 731,475 1,616,659 5,070 6,102,494 9,026,919 25%/75%Aggregate amount of other Executiv

117、e Committee members9 5,247,046 1,598,844 6,246,311 7,386,224 731,436 21,209,861 33%/67%3,763,975 Total 6,954,546 1,861,399 9,137,306 12,070,404 956,550 6,102,494 37,082,699 30%/70%4,663,839 All numbers disclosed in this table were audited.1 Includes actual contributions paid to the relevant Company

118、benefit plan.2 Includes CHF 63,153 in mandatory contributions paid by Sandoz to governmental social security systems for all Executive Committee members,which provide a right to the maximum future benefit.This amount is out of total employer contributions of CHF 1,384,640.3 Value of Performance Shar

119、e Units(PSUs)at grant.The first Sandoz LTPP award was granted on Feb 28,2024 for the performance period 2024-2026 at the closing market price of CHF 27.57.For Remco Steenbergen,the LTPP grant was made on Jul 1,2024 at the closing market price of CHF 32.45.He received a prorated grant 30/36 months to

120、 reflect his time as Executive Committee member over the full performance cycle.4 Includes the value of Company-provided perquisites,benefits-in-kind,government-mandated family allowance and tax support.For members of the Executive Committee who were relocated or assigned to other countries,benefits

121、 are paid in line with company policies applicable to other employees,including relocation,schooling,family support,housing,tax and social security gross-ups and equalization.5 In line with the Companys buyout policy,Remco Steenbergen received buyout awards of CHF 407,000 in cash,126,210 PSUs,and 49

122、,306 RSUs,which will vest between 2025 and 2029.PSUs and RSUs are valued based on the share price of CHF 32.45 on date of grant Jul 1,2024.6 Payments to Executive Committee members were made in CHF,USD,CAD,and EUR.The exchange rates were:1 USD to 0.880 CHF,1 CAD to 0.643 CHF,1 EUR to 0.953 CHF(avera

123、ge annual exchange rates 2024).7 Fixed compensation includes base salary,retirement and insurance benefits.Variable compensation includes the actual 2024 Annual Incentive paid and LTPP 2024-2026 awards granted at target level.The ratios shown are on an annualized basis.8 2023 compensation amount sho

124、wn is only for the period from Oct 4,2023 to Dec 31,2023.9 Includes the compensation of two members(Colin Bond,Pierre Bourdage)who stepped down during the financial year 2024.The total compensation for 2023 shown in exhibit 2.4.1 covers the period from October 4,2023(date of spin-off)to December 31,

125、2023,in line with Swiss law,totaling the compensation paid for 89 days.For details,please refer to the 2023 Integrated Annual Report.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 202471Metrics Weight Achievements Board AssessmentFinancial

126、metrics Threshold Target MaximumNet sales%growth(in constant currencies)30%Exceeded expectationsCore EBITDA margin(as reported)30%Met expectationsFree cash flow(in USD billion)30%OutstandingESG Access:Number of patients treated with Sandoz biosimilars in 00010%Met expectationsExceeded expectationsPe

127、rformance Management Led the company through its first full year of independent operations,delivering a strong financial performance and an increased valuation of the company:37%share-price growth during the year and a 39%total shareholder return.Sandozs market capitalization increased from USD14 bi

128、llion to USD 18 billion in 2024 Delivered growth in all key financial metrics,including operating income(+5%in constant currencies,cc),core diluted EPS(+28%in cc)and core return on invested capital(+250 basis points)Exceptional growth in North America(+15%in cc)and continued strong performances in E

129、urope(+6%in cc)and International(+8%in cc),respectively,reflecting the increase in biosimilar sales(+30%in cc)Strategic Reframing Following the spin-off,successfully repositioned Sandoz as a high-performing standalone biosimilars&generics leader Focused development and investments to replenish and e

130、xpand the pipeline,ensuring continuous launches Shift of portfolio mix to accretive biosimilars,with market share increasing from 23%in 2023 to 28%in 2024,driven by the recent launches of Hyrimoz,Pyzchiva,and Tyruko Acquisition of Cimerli led to further biosimilars growth and pipeline advancement St

131、rong execution of supply-network strategy;met commitment to reduce internal network from 18 to 15 sites in 2024Organizational Building Strengthened leadership team with a balance of experienced external talent and internal promotions Market-leading gender balance maintained in Executive Committee St

132、rong Employer Value Proposition evidenced by employees engagement ahead of pharma benchmark(Peakon 2024)Assessment of CEOs achievements against strategic objectivesFinal assessment and payoutThe Board made a final assessment that the CEO exceeded expectations and approved a final payout factor of 16

133、0%within the applicable range of 130%160%resulting in a payout of CHF 2,159,520.6.8%959-0.16920.2%Assessment of Group performance on financial and ESG targets2.4.2 2024 Annual Incentive awards CEO Annual IncentiveAt the beginning of 2024,the Board of Directors set the targets under the four Annual I

134、ncentive metrics applicable to the CEO and the other members of the Executive Committee.The Board also set strategic objectives applicable only to the CEO.The table below outlines the CEOs performance against the Annual Incentive targets.Exhibit 2.4.2:2024 CEO Annual Incentive OverviewFinancial Repo

135、rtESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 2024721 Please refer to the Sandoz 2023 Integrated Annual Report(pages 9899)for details of the Sandoz Equity Restoration Plan(including a detailed description of Keep Whole and Refill Awards).Other members of the Ex

136、ecutive CommitteeThe CEO made recommendations for payout of Annual Incentive of the members of the ExecutiveCommittee based on Company performance against the financial and ESG metrics and considering their individual contribution to overall Company performance,including role modeling of Sandoz valu

137、es and culture.The Board Chair,and the HC&ESGC reviewed these recommendations carefully and the HC&ESGC decided on the payouts of the 2024AnnualIncentive.For the Executive Committee members(excluding the CEO),the Annual Incentive payouts ranged from 100%to 170%within the range of 0200%of target.2.4.

138、3 2022-2024 Keep Whole and Refill LTPP AwardsVesting of Sandoz LTPP in 2025There was no vesting of Sandoz LTPP in 2025,as the first Sandoz LTPP was granted in February 2024 for the 20242026 performance cycle.When the first Sandoz LTPP awards for performance cycle 20242026 vest,achievements and the p

139、ayout factor will be retrospectively disclosed.Vesting of Keep Whole and Refill Awards in 2025If employed in January 2022 while Sandoz was a division of its previous parent company(and if eligible at that time),certain employees,including some Executive Committee members prior to their appointment t

140、o the Sandoz Executive Committee,received a performance-based Long-Term Incentive award in PSUs for the performance period 20222024.At the spin-date,they received a Keep Whole Award1.At the same time,21 of the 36 months of the awards remained in previous parent company equity(not disclosed in this r

141、eport),and the other portion equivalent to 15/36 was forfeited.The forfeited equity was refilled in Sandoz equity awards,called Refill Awards1 with a performance period of 15 months.In October 2023,the Sandoz Board of Directors set performance conditions that were applicable to the Keep Whole Awards

142、 and Refill Awards.These awards vested in February 2025.To keep business focus on financial targets from the Sandoz business plan that were set in the ordinary course of business,the Board of Directors decided to apply the average of the Sandoz 2023 and 2024 performance factors to the vesting of the

143、 Keep Whole and Refill Awards.The performance factor for 2023 was based on targets that were set while Sandoz was a division of Novartis.The targets were set across four equally weighted financial metrics:Net Sales,Core Operating Income,Free cash flow,Core Operating Margin.The performance factor for

144、 2024 included three equally weighted financial metrics:Net Sales%growth,Core EBITDA margin and free cash flow.Performance per metric is outlined below.Exhibit 2.4.3.1:2024 Performance Factor for Keep Whole and Refill Awards vestingPerformance Metric Weight Target Board AssessmentNet sales%growth(in

145、 constant currencies)33%6.8%Exceeded expectationsCore EBITDA margin(as reported)33%20.2%Met expectationsFree cash flow(in USD billion)33%-0.169 OutstandingPerformance Factor 2024(range 0%200%)145%The final payout for the Keep Whole and Refill Awards is calculated as below:Exhibit 2.4.3.2:2022-2024 K

146、eep Whole and Refill Awards vesting(15/36 months cycle)Performance Factor Weight Weighted payout 2023 Performance Factor 3/36 months 144%(as disclosed in 2023 Compensation Report)2024 Performance Factor 12/36 months 145%Final payout factor(range 0%200%)145%The prorated Keep Whole and Refill Awards i

147、n PSUs of the CEO and of any other members of the Executive Committee(if applicable)vested at 145%of target(within a range of 0200%),plus dividend equivalents accrued over the 15 months,paid in unrestricted Sandoz shares.2.4.4 Payments to former members of the Executive Committee(audited)During the

148、2024 financial year there were no former members of the Executive Committee and therefore no payments were made.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 2024732.5 Shareholdings of members of the Executive CommitteeAs at December 31,20

149、24,the total number of shares or American Depositary Receipts(Level I ADR)owned by each of the members of the Executive Committee and“related parties”(see Section 4.4 for an understanding of“related parties”)is set out in the table below(exhibit 2.5).Exhibit 2.5:Shareholdings of members of the Execu

150、tive Committee Total as at Total as at Vested shares Unvested Unvested Dec.31,Dec.31,Executive Committee member and ADRs 1 RSUs 2 PSUs 3 2024 2023 Richard Saynor Chief Executive Officer 10,839 1,606 190,146 202,591 91,023 Remco Steenbergen Chief Financial Officer 2,917 49,306 176,030 228,253 na Ingr

151、id Sollerer General Counsel and Chief Compliance Officer 27,096 5,551 49,597 82,244 53,394 Tripti Jha Chief People Officer 3,793 14,128 58,845 76,766 47,792 Claire DAbreu-Hayling Chief Scientific Officer 2,866 262 46,409 49,537 20,168 Glenn A.Gerecke Chief Manufacturing and Supply Officer 861 12,183

152、 39,736 52,780 28,254 Christophe Delenta President Europe 4,088 9,049 20,000 33,137 na Keren Haruvi President North America 2,694 2,243 58,113 63,050 36,997 Francisco Ballester President International 11,243 577 50,292 62,112 35,160 Rebecca Guntern Chief Commercial Officer 12,539 5,702 84,842 103,08

153、3 59,940 Sub-Total 78,936 100,607 774,010 953,553 372,728 Executive Committee member who stepped down in 2024 Colin Bond 199 206 33,461 33,866 27,314 Pierre Bourdage 1,633 3,729 29,671 35,033 26,195 Sub-Total 1,832 3,935 63,132 68,899 53,509 Total 80,768 104,542 837,142 1,022,452 426,237 All numbers

154、 disclosed in this table were audited.1 Ordinary Sandoz shares listed at the Swiss Stock Exchange SIX and Level I ADR(OTC-quoted in the US)held by the members of the Executive Committee and“related parties”.2 The numbers of unvested RSUs also include unvested Keep-Whole and Refill Awards received at

155、 spin-off.3 The numbers represent the unvested,granted PSUs.The numbers of PSUs at vesting and converted to shares may be lower or higher depending on the payout of the awards.The balance of holdings in Sandoz shares as of December 31,2023 is shown in exhibit 2.5 for comparison.For details,please re

156、fer to the 2023 Integrated Annual Report.2.6 Executive Committee compensation framework from January 2025To ensure alignment with future strategic business objectives,external peer groups,and best practices in compensation design for Sandoz executives,the Board and the HC&ESGC reviewed the compensat

157、ion structure and systems applicable to the CEO and the members of the Executive Committee,with particular attention to the performance metrics of the incentive plans.At the time of separation from the parent company,Sandoz committed to margin expansion.While this continues to be a focus area for th

158、e Company,the Board determined that the metrics across short-term and long-term incentive plans should cover a more comprehensive evaluation of the Companys financial health and align with long-term value creation.The Board concluded that replacing Core EBITDA margin in the Long-Term Incentive Plan

159、with Core Return on Invested Capital(ROIC)will eliminate the overlap of Core EBITDA margin in the Annual Incentive and Long-Term Performance Plan(LTPP)and will provide a clearer assessment of how effectively resources are being utilized to generate value.Feedback received during the investor governa

160、nce meetings in late 2024 indicated that shareholders are supportive of this change.The Annual Incentive plan remains unchanged,with Core EBITDA margin continuing to be used as a performance metric.The LTPP metrics for the 20252027 performance cycle will be as follows:Exhibit 2.6:20252027 LTPP Perfo

161、rmance metricsLTPP Performance metrics Weight Financial performance Core ROIC(3-year average)30%Core EPS(cumulative 3-year target)30%Innovation%Sales from biosimilars/peptides 2027 20%(as reported,endpoint after 3 years)1 ESG Environmental Sustainability and Diversity,Equity and Inclusion 20%1 Inclu

162、des biosimilars and peptides to reflect the strategic importance of these modalities to the future of the Sandoz business.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 2024743.Board of Directors compensation3.1.Compensation policy for the

163、Board of Directors3.1.1 FeesBased on proposals from the HC&ESGC,the Board of Directors sets the level of compensation for its Chair and the other members of the Board.The levels are in line with relevant benchmarks of compensation in other companies,specifically of Swiss multinational companies of b

164、roadly comparable size represented in the Swiss Market Index(SMI)as well as the Swiss Market Index Mid(SMIM)reflecting the Swiss legal and governance environment.The relevant benchmarks are from the following comparator companies.Exhibit 3.1.1.1:Peer group for Board compensation ABB Adecco AlconBarr

165、y Callebaut Clariant GeberitGivaudan Khne+Nagel HolcimLonza Richemont SchindlerSika SGS SonovaStraumann Swatch SwisscomThe compensation of the members of the Board of Directors consists of fixed fees only,with no variable pay elements,incentives,and no financial instruments(e.g.,share options).Fees

166、comprise a fixed fee for Board of Directors membership,and additional fixed fee(s)for the Vice-Chair as well as the chairs and members of Board committees.The Board Chairs time commitment to his role and his responsibilities are considerably higher than other members of the Board of Directors.This i

167、s reflected in the Board Chair fee for a term of office.On the other hand,the Board Chair does not receive any separate compensation for work or participation in Board Committees.The Company does not offer its employee retirement or insurance pension plans to members of the Board of Directors or pay

168、 contributions to such plans.Where the Company is required by law in specific cases,to provide mandatory retirement and insurance benefits,a separate basic plan is offered with contributions up to regulatory limits.Exhibit 3.1.1.2:Structure of Board compensationAGM 2024-25 fees (CHF)Board Chair fee

169、850,000 Board membership fee 200,000 Additional fees(CHF):1 Vice-Chair Committee Chair Committee member Vice-Chair 50,000 Audit,Risk and Compliance Committee 60,000 40,000 Human Capital and ESG Committee 50,000 30,000 Science,Innovation and Development Committee 50,000 30,000 1 The Board Chair does

170、not receive additional fees for participation in any of the Board committees.The Board Chair and the other members of the Board receive at least 50%of their total fees in the form of unrestricted ordinary Sandoz shares based on the market value on the day the shares are granted.In a term of office f

171、rom the AGM in one year to the next the shares are delivered in two instalments in arrears.All members of the Board may choose to receive more than 50%of their fees in Sandoz shares.The remaining fees are paid in cash in four instalments in arrears.Sandoz pays mandatory Company contributions to the

172、governmental social security systems where applicable.Members of the Board bear the cost of their own mandatory employee social security contributions,if any.Members of the Board are reimbursed for normal business expenses(e.g.,transport,hotels,meals)during business travel when attending Board meeti

173、ngs,based on the Companys travel and expensepolicy.The Board of Directors compensation policy does not provide for any severance or termination-related payments.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 2024753.1.2 Share ownership guid

174、elinesBoard members are expected to build and retain a significant shareholding in Sandoz shares,to align their interests with those of other shareholders.The minimum requirements are as follows:Exhibit 3.1.2:Board minimum share ownership guidelinesPosition Minimum ownership requirement TimeframeBoa

175、rd Chair 1x Board Chair fee Within four years of joining the Board of DirectorsOther Board members 1x Board membership fee Within four years of joining the Board of DirectorsBoard members must retain all Sandoz shares received from the Company until the minimum ownership requirement is met(net of th

176、e applicable taxes).Members of the Board of Directors are required to maintain their minimum ownership requirement during their full tenure,and for a year after leaving the Board of Directors.3.2 Departing and joining members of the Board of DirectorsNew members appointed and electedMathai Mammen,Gr

177、aeme Pitkethly and Michael Rechsteiner were elected to the Board of Directors at the 2024 AGM.Their Board fees were payable from the 2024 AGM and are disclosed in exhibit3.3.1.For more details refer to the Corporate Governance Report on|Page 43.Members departingRemco Steenbergen did not stand for re

178、-election as a member of the Board at the 2024 AGM as he was appointed as CFO and member of the Sandoz Executive Committee.His Board fee paid up to the 2024 AGM is disclosed in exhibit 3.3.1.Franois-Xavier Roger stepped down as a Board member effective March 31,2024 to pursue a new executive respons

179、ibility at a competitor company.His Board fee was paid until March 31,2024 and provided in exhibit 3.3.1.3.3 2024 Compensation for the Board of Directors 3.3.1 Fees of members of the Board of DirectorsThe audited table below sets out the compensation earned by the members of the Board of Directors i

180、n the period from January 1,2024,to December 31,2024.The Board of Directors fees are payable for services from the 2024 AGM to the 2025 AGM.However,the 2024 Compensation Report covers the payments earned during 2024.The compensation disclosed in exhibit 3.3.1 represents the fees earned for services

181、from January to April 2024,i.e.,of the previous term,and the fees earned for services from May to December 2024 of the term 2024 AGM to 2025 AGM,being the current term.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 202476Exhibit 3.3.1:2024

182、Board fees Board compensation CHF Fees earned in 2024 in 2023 Total earned 2023Board Member Board Function1 Fees in cash Fees in shares2 Other payments3 Total earned 2024(Oct 4 Dec 31)4Gilbert Ghostine Board Chair 425,000 425,000 11,993 861,993 234,883 Karen J.Huebscher Vice-Chair 170,000 170,000 4,

183、675 344,675 96,757 Chair of the SIDC Member of the ARCC Urs Riedener Chair of the HC&ESGC 41,667 208,333 4,675 254,675 65,813 Shamiram Feinglass Member of the SIDC 115,000 115,000 230,000 62,292 Aarti Shah Member of the HC&ESGC 130,000 130,000 260,000 70,417 Member of the SIDC Yannis Skoufalos Membe

184、r of the HC&ESGC 117,333 132,667 250,000 61,333 Member of the SIDC Maria Varsellona Member of the ARCC 135,000 135,000 7,805 277,805 80,873 Member of the HC&ESGC Mathai Mammen Member of the SIDC 153,333 153,333 na Michael Rechsteiner Member of the ARCC 54,000 126,000 4,675 184,675 na Member of the H

185、C&ESGC Graeme Pitkethly Chair of the ARCC 173,333 7,805 181,138 na Sub-Total 1,188,000 1,768,666 41,628 2,998,294 672,367 Board members who stepped down at the 2024 AGM or earlier Franois-Xavier Roger 72,500 4,675 77,175 76,343 Remco Steenbergen 45,000 45,000 90,000 73,125 Sub-Total 45,000 117,500 4

186、,675 167,175 149,468 Total 1,233,000 1,886,166 46,303 3,165,469 821,835 All numbers disclosed in this table were audited.1 ARCC:Audit,Risk and Compliance Committee;HC&ESGC:Human Capital&ESG Committee;SIDC:Science,Innovation and Development Committee.2 The value of fees in shares reported in this col

187、umn represents the total fees earned in shares for the period 01/01/2024 to 12/31/2024.The amounts shown represent the gross fees in shares of each Board member for the respective service period.The first share instalment was on Mar 25,2024,with share price CHF 26.99.The second share instalment was

188、on Sep 2,2024,with share price CHF 36.75.3 Includes CHF 46,303 mandatory contributions paid by Sandoz to governmental social security systems for all members of the Board of Directors and also mandatory contributions to the Swiss minimum legally required pension plan for the Board Chair.This amount

189、is out of total Sandoz contributions of CHF 152,174,and provides the right to the maximum future insured government pension benefit.4 2023 total earned fees,including the accrued portion of the value of shares for the period 10/04/2023 to 12/31/2023.The fees paid up to the 2024 AGM remained within t

190、he budget approved for the term from spin-off date to the 2024 AGM.The total of fees paid for services to the Board within the period of the current term covered in this report and the remainder of fees payable to members of the Board of Directors for services in 2025 up to the 2025 AGM will be with

191、in the maximum aggregated budget of CHF 3,400,000 prospectively approved by shareholders at the 2024 AGM.The total fees earned in 2023 shown in exhibit 3.3.1 covers the period from October 4,2023(dateof spin-off)to December 31,2023,in line with Swiss law,totaling the compensation paid for 89 days.Fo

192、r details,please refer to the 2023 Integrated Annual Report3.3.2 Payments to former members of the Board of DirectorsDuring the period January 1,2024,to December 31,2024,there were no former members of the Board of Directors and therefore no payments were made.OverviewFinancial ReportESG Disclosures

193、Business ReportGovernance,Compensation&RiskIntegrated Annual Report 2024773.4 Shareholdings of members of the Board of DirectorsAs at December 31,2024,the total number of shares owned by each of the members of the Board of Directors and“related parties”(see Section 4.4 for an understanding of“relate

194、d parties”)is set out in the table below.Exhibit 3.4:Shareholdings of members of the Board Shares Shares Board member Function1 At Dec 31,2024 2 At Dec 31,2023 2Gilbert Ghostine Board Chair 53,467 38,500 Karen J.Huebscher Vice-Chair,Chair of the SIDC,13,528 7,750 Member of the ARCC Urs Riedener Chai

195、r of the HC&ESGC 7,877 186 Shamiram R.Feinglass Member of the SIDC 3,037 Aarti Shah Member of the HC&ESGC,3,433 Member of the SIDC Yannis Skoufalos Member of the HC&ESGC,14,919 Member of the SIDC Maria Varsellona Member of the ARCC,3,565 Member of the HC&ESGC Mathai Mammen Member of the SIDC 2,346 n

196、a Michael Rechsteiner Member of the ARCC,2,571 na Member of the HC&ESGC Graeme Pitkethly Chair of the ARCC 2,523 na Sub-Total 107,266 46,436 Board members who stepped down at the 2024 AGM or earlier Franois-Xavier Roger na Remco Steenbergen na Sub-Total na Total 107,266 46,436 All numbers disclosed

197、in this table were audited.1 ARCC:Audit,Risk and Compliance Committee;HC&ESGC:Human Capital&ESG Committee;SIDC:Science,Innovation and Development Committee.2 Ordinary Sandoz shares listed at the Swiss Stock Exchange SIX held by the Board member and“related parties”(no Level I ADRs quoted in the US w

198、ere held).The balance of holdings in Sandoz shares as of December 31,2023,is shown in exhibit 3.4 for comparison.For details,please refer to the 2023 Integrated Annual Report.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 2024784.Compensati

199、on governance4.1 Human Capital&ESG Committee The Board of Directors determines the overall compensation philosophy and principles and is responsible for approving all compensation payable to the members of the Board of Directors andthe CEO.The HC&ESGC supports the Board of Directors with respect to

200、rewards topics by:Recommending the compensation philosophy and principles for the members of the Board and the Executive Committee.Preparing the proposals to the general meeting of shareholders regarding the prospective compensation budgets for the Board of Directors and the Executive Committee.Prep

201、aring the Compensation Report.Determining the fixed and variable compensation of members of the Executive Committee other than the CEO.Approval and authority levels on compensation matters are as follows.Exhibit 4.1:Authority levels General meeting CEO Board Chair HC&ESGC Board of Directors of share

202、holdersCompensation principles Propose Approve and policies Maximum aggregate Propose Endorse Approvecompensation of the (binding vote)Board of Directors Maximum aggregate Propose Endorse Approvecompensation of the (binding vote)Executive Committee Individual compensation Propose Approve of Board Ch

203、air and other members of the Board of Directors CEO compensation Propose Review Approve Individual compensation Propose Review Approve of nine other members of the Executive Committee Compensation Report Propose Approve Advisory voteThe HC&ESGC meets at least four times a year.It comprises fully ind

204、ependent members of the Board of Directors.During 2024 the HC&ESGC held seven meetings.The Board Chair,CEO,Chief People Officer,and other members of management may attend HC&ESGC meetings as guests by invitation as required.However,no executive is present when their own compensation is discussed.The

205、 Chair of the HC&ESGC provides an update to the Board of Directors on decisions made with respect to matters discussed by the Committee including decisions regarding the compensation of the other nine members of the Executive Committee(excluding the CEO,whose compensation is decided by the Board).Du

206、ring the period from 2024 AGM to the 2025 AGM,the members of the HC&ESGC were:UrsRiedener(Chair),Aarti Shah,Yannis Skoufalos,Michael Rechsteiner and Maria Varsellona.The HC&ESGC received independent compensation advice from Deloitte.The independent advisor from Deloitte including their team that adv

207、ised and supported the HC&ESGC,are not responsible or rewarded for work beyond such support provided to the HC&ESGC and the People&Organization function on executive compensation.4.2 Shareholders say-on-payThis 2024 Compensation Report will be subject to a consultative vote at the 2025 AGM.In line w

208、ith Swiss law and the Articles of Incorporation,the Board of Directors will annually submit to the General Meeting of shareholders for vote and approval of the maximum aggregate amount of compensation for:(i)the Board of Directors,payable for the upcoming term of office(i.e.,in the period from one A

209、GM to the next),and separately,(ii)the maximum aggregate amount of compensation for the Executive Committee,payable in the following financial year.Given the variable nature of a significant portion of compensation of the Executive Committee,the proposed maximum aggregate amount will typically be hi

210、gher than the compensation paid or awarded.The Compensation Report of any future financial year will be subject to a non-binding advisory vote of shareholders at the next AGM.4.3 External mandates Members of the Executive CommitteeThe external mandates of the members of the Executive Committee in ot

211、her companies or organizations as at December 31,2024(according to the Swiss Code of Obligations,Art.734e,activities in other companies)are as follows:OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 202479Exhibit 4.3.1:Activities of the memb

212、ers of the Executive CommitteeName Role OrganizationRemco Steenbergen1 2024 na na 2023 Chief Financial Officer,member of Deutsche Lufthansa AG,Cologne,the management board Germany Member of the board of directors Lufthansa Technik AG,Hamburg,Germany2 Chair of the board of directors Airplus AG,Neu-Is

213、enburg,Germany2 Member of the board of directors Swiss International Airlines AG,Kloten,Switzerland2Francisco Ballester3 2024 and 2023 Member of the Health Management Miami Herbert Business School,Coral and Policy Advisory Council Gables FL,USAClaire DAbreu-Hayling 2024 Director Black Phoenix Enterp

214、rise Ltd,London,UK Trustee Elim College Limited,Malvern,UK 2023 Director Black Phoenix Enterprise Ltd,London,UKRebecca Guntern4 2024 Member of the board of directors,BKW AG,Berne,Switzerland and chair of the compensation committee 2023 Member of the board of directors,BKW AG,Berne,Switzerland and ch

215、air of the compensation committee Vice-president Medicines for Europe,Brussels,BelgiumKeren Haruvi 2024 Chair and a member of the board Association of Accessible Medicines,of directors Washington DC,USA Venture advisor Israel Biotech Fund,Israel 2023 Chair and a member of the board Association of Ac

216、cessible Medicines,of directors Washington DC,USAName Role OrganizationDeparting members Colin Bond 2024 Member of the board of directors BioPharma Credit plc,London,UK Member of the board of directors Formycon AG,Planegg,Germany Member of the board of directors Agomab Therapeutics NV,Antwerpen,Belg

217、ium 2023 Member of the board of directors BioPharma Credit plc,London,UKThe information in this table was audited.1 Remco Steenbergen stepped down from the following roles at the time of joining Sandoz:1)CFO,member of the management board of Deutsche Lufthansa AG,Cologne,Germany;2)Member of the supe

218、rvisory board of directors of Lufthansa Technik AG,Hamburg,Germany;3)Chairman of the supervisory board of directors of Airplus AG,Neu-Isenburg,Germany;4)Member of the board of directors of Swiss International Airlines AG,Kloten,Switzerland.2 Companies are owned by Deutsche Lufthansa AG.3 Francisco B

219、allester will take up a new role as advisory consultant at Ocubio effective Mar,2025.As announced on Feb 3,2025,Francisco Ballester will step down as President International and member of the Executive Committee at Sandoz,effective Mar 1,2025.4 Rebecca Guntern stepped down as Vice-president of the b

220、oard of directors of Medicines for Europe,Brussels,Belgium on Dec 10,2024.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 202480Members of the Board of DirectorsThe external mandates of the members of the Board of Directors in other companie

221、s or organizations as at December 31,2024(according to the Swiss Code of Obligations,Art.734e,activities in other companies)are as follows:Exhibit 4.3.2:Activities of the members of the Board of DirectorsName Role OrganizationGilbert Ghostine 2024 and 2023 Member of the board of directors,Danone SA,

222、Paris,France member of the audit committee,member of the CSR committee Member of the board of directors,Four Seasons Hotels and Resorts,chair of the nomination Toronto,Canada and remuneration committee Karen J.Huebscher,2024 Ph.D.Member of the board of directors BBI Solutions,Crumlin,UK Founder and

223、managing director Fibula Medical AG,Sarnen,Switzerland Member of the foundation board IMD Business School,Lausanne,Switzerland Vice-Chair of the board of directors,Tecan Group AG,Mnnedorf,member of the audit committee,Switzerland member of the nomination and governance committee Member of the board

224、of directors Ivoclar Group,Schaan,Liechtenstein 2023 Member of the board of directors BBI Solutions,Crumlin,UK Founder and managing director Fibula Medical AG,Sarnen,Switzerland Member of the foundation board IMD Business School,Lausanne,Switzerland Member of the board of directors,Tecan Group AG,Mn

225、nedorf,chair of the audit committee,Switzerland member of the nomination and governance committee Name Role OrganizationShamiram R.Feinglass,2024 M.D.Member of the advisory research Association of American Medical board Colleges,Washington DC,USA Member of the research and Childrens National Medical

226、 Center,innovation committee Washington DC,USA Member and advisor of the global The Aspen Institute,Washington DC,network USA Member of the board of directors Elucid,Boston,MA,USA Co-chair of mental health roundtable Health Evolution,San Francisco,and senior fellow CA,USA Managing director Manatt He

227、alth,Los Angeles,CA,USA 2023 Member of the advisory research Association of American Medical board Colleges,Washington DC,USA Member of the research and Childrens National Medical Center,innovation committee Washington DC,USA Member and advisor of the global The Aspen Institute,Washington DC,network

228、 USA Co-chair of mental health roundtable Health Evolution,San Francisco,and senior fellow CA,USAMathai Mammen,2024 M.D.,Ph.D.1 (appointed at 2024 AGM)Member of the board Xaira Therapeutics,Inc.,San Francisco,CA,USA Advisor Foresite Capital,Larkspur,CA,USA Advisor General Atlantic,New York,USA Membe

229、r of the board Kelonia Therapeutics,Boston,MA,USA CEO and chairman Parabilis Medicines(formerly FogPharma)Cambridge,MA,USAGraeme Pitkethly2 2024(appointed at 2024 Member of the board of directors,Pearson plc,London,UKAGM)vice-chair of the board of directors,senior independent director,chair of the a

230、udit committee,member of risk and reputation committee,member of renumeration committee Member of the advisory board Strathclyde University Center for Sustainable Development,Glasgow,UK Trustee,member of the investment Leverhulme Trust,London,UK committee Advisor Watershed Technology,Inc.,Boston,MA,

231、USAOverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 202481Name Role OrganizationMichael Rechsteiner 2024(appointed at 2024 Chairman of the board Swisscom,Berne,SwitzerlandAGM)Member of the board of trustees ETH Zurich Foundation,Zurich,Switze

232、rland Member of the board,economiesuisse,Zurich,member of the board committee Switzerland(Vorstandsausschuss)Aarti Shah,Ph.D.2024 Member of the board of directors,NVIDIA Corporation,Santa Clara,member of the audit committee,CA,USA member of the compensation committee Member of the board of trustees,

233、Northwestern Mutual,Milwaukee,member of the audit committee,WI,USA member of the distribution and tech committee Advisor L&T Technology Services(LTTS),Vadodara,India CIO advisory board member Deloitte,New York,USA Advisor World 50 Group Inc.,Atlanta,GA,USA Trustee Shrimad Rajchandra Mission Dharampu

234、r(formerly Shrimad Rajchandra Love and Care),USA Member of the board of governors St.Judes Children Research Hospital,Memphis,Tennessee,USA 2023 Member of the board of directors,NVIDIA Corporation,Santa Clara,member of the audit committee,CA,USA Member of the board of trustees,Northwestern Mutual,Mi

235、lwaukee,member of the audit committee,WI,USA member of the distribution and tech committee Advisor,consultant ZS Associates Group Inc.,Evanstone,IL,USA Advisor L&T Technology Services(LTTS),Vadodara,India Trustee Shrimad Rajchandra Mission Dharampur(formerly Shrimad Rajchandra Love and Care),USA Adv

236、isor World 50 Group Inc.,Atlanta,GA,USAName Role OrganizationUrs Riedener 2024 Member of the board of directors,Bystronic AG,Zurich,Switzerland chair of the compensation and nomination committee Chairman of the board,chair of the Emmi Group AG,Lucerne,Switzerland personnel and compensation committee

237、,chair of the agricultural council Member of the foundation board Emmi Pension Fund,Lucerne,Switzerland Member of the advisory board Schwarz Unternehmenstreuhand KG,and limited partner Neckarsulm,Germany Member of the advisory board Institute for Marketing and Customer Insights,University of St.Gall

238、en,St.Gallen,Switzerland 2023 Member of the board of directors,Bystronic AG,Zurich,Switzerland chair of the compensation and nomination committee Chairman of the board,chair of Emmi Group AG,Lucerne,Switzerland the personnel and compensation committee,chair of the agricultural council Member of the

239、foundation board Emmi Pension Fund,Lucerne,Switzerland Member of the advisory board Schwarz Unternehmenstreuhand KG,Neckarsulm,Germany Member of the executive committee Institute for Marketing and Customer Insights,University of St.Gallen,St.Gallen,SwitzerlandOverviewFinancial ReportESG DisclosuresB

240、usiness ReportGovernance,Compensation&RiskIntegrated Annual Report 202482Name Role OrganizationYannis Skoufalos 2024 Member of the board of directors Aimia Inc,Montreal,Canada Senior advisor on supply network Blackstone Inc,New York,USA matters Member of the board of directors Sustana Group,Maryland

241、,Ohio,Wisconsin,USA Founder and managing director Yannis Skoufalos Strategic Solution LLC,Bay Harbour Island,FL,USA Advisor Oasis Management Company,Hong Kong 2023 Member of the board of directors Aimia Inc,Montreal,Canada Senior advisor on supply network Blackstone Inc,New York,USA matters Member o

242、f the board of directors Sustana Group,Maryland,Ohio,Wisconsin,USA Founder and managing director Yannis Skoufalos Strategic Solution LLC,Bay Harbour Island,FL USAMaria Varsellona 2024 and 2023 Chief legal officer and group secretary Unilever plc,London,UK Board members who stepped down at the 2024 A

243、GM or earlier Remco Steenbergen 2024 na na 2023 Chief Financial Officer,Deutsche Lufthansa AG,Cologne,member of the management board Germany Member of the board of directors Lufthansa Technik AG,Hamburg,Germany3 Chair of the board of directors Airplus AG,Neu-Isenburg,Germany3 Member of the board of

244、directors Swiss International Airlines AG,Kloten,Switzerland3Franois-Xavier Roger 2024 and 2023 Chief Financial Officer Nestl SA,Vevey,Switzerland Chair of the board of directors Nestl Ventures,Vevey,Switzerland4 Chair of the board of directors Nutrition Wellness Venture,Vevey,Switzerland4The inform

245、ation in this table was audited.1 Mathai Mammen stepped down as member of the board of directors of 10 x Genomics,CA,USA in Oct,2024.2 Graeme will take up a new role as member of the board of directors and chair of the audit committee of Verisure effective Mar,2025.3 Companies are owned by Deutsche

246、Lufthansa AG.4 Legal entities are owned by Nestl SA.4.4 Loans and other payments(audited)Sandoz does not allow loans to be granted to current or former members of the Executive Committee or to their“related parties”.Likewise,no loans may be granted to current or former members of the Board of Direct

247、ors or to their“related parties”.As such,no loans were granted in 2024,and there were no outstanding loans on December 31,2024.During the period from January 1,2024,to December 31,2024,no other payments or waivers of claims other than those set out in the relevant tables(including their footnotes)co

248、ntained in this Compensation Report were made to current or former members of the Executive Committee or to current or former members of the Board of Directors,or to any of their“related parties”.For an understanding of the statements above,“related party”is a person or an entity that is related to

249、Sandoz:A person or a close member of that persons family is related to a reporting entity if that person has control,joint,control,or significant influence over the entity or is a member of its key management personnel.Board of Directors(BoD)and Executive Committee(EC)members are considered key mana

250、gement personnel,and thus BOD and EC members and their close family members are identified as related parties of Sandoz.An entity is related to Sandoz,if among other circumstances,it is a parent,subsidiary,fellow subsidiary,associate,or joint venture of Sandoz,or it is controlled,jointly controlled,

251、or significantly influenced or managed by a person who is a related party.Identification of controlling/joint-control investments(50%or more)of the BOD and EC members and their close family members should be identified as related parties of Sandoz pursuant to specific guidance in IAS 24.4.5 Articles

252、 of IncorporationThe Articles of Incorporation of Sandoz Group AG include provisions with respect to the compensation of the Board of Directors and the Executive Committee as follows:The General Meeting of Shareholders approval of compensation paid to members of the Board and the Executive Committee

253、 is set forth in Article 31.The additional amount for compensation payable to one or more members who become members of the Executive Committee during a compensation period for which the General Meeting of Shareholders has already approved the compensation of the Executive Committee is set forth in

254、Article 32.The general compensation structure and principles,including the allocation of equity securities,financial instruments or similar units,are set forth in Article 33.The variable compensation of members of the Executive Committee based on performance metrics is set forth in Article 34.The ag

255、reements with members of the Board of Directors and employment agreements with members of the Executive Committee are set forth in Article 35.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 202483 The rules with respect to mandates of member

256、s of the Board of Directors and the Executive Committee in other companies are set forth in Article 36.The rules with respect to loans or credits granted to members of the Board and the Executive Committee are set forth in Article 37.The Articles of Incorporation are available on|S ReferencesThe San

257、doz Compensation Report is written in accordance with Articles 734a to 734e of the Swiss Code of Obligations,and section 5 of the Annex to the Directive on Corporate Governance(DCG)of the SIX Swiss Exchange.The report also takes into account the best practice expectations of investors and the Swiss

258、Code of Best Practice for Corporate Governance issued by the Swiss Business Federation economiesuisse.4.7 Notes to the Groups audited financial statementsThe total expense related to compensation and benefits paid,granted,or promised to members of the Board of Directors and the Executive Committee i

259、n the financial year 2024 are set out in the Groups audited financial statements,note 30.Transactions with related parties,paragraph“Compensation of members of the Executive Committee and non-executive Directors”.The expense follows measurement and disclosure rules according to the Companys accounti

260、ng policies and International Financial Reporting Standards(IFRS).It should be noted that the compensation and benefits disclosed in this report are not aligned with those disclosed in note30 to the financial statements due to the different regulations that apply in each case and the different repor

261、ting periods and standards.OverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 202484 Report of the statutory auditor To the General Meeting of Sandoz Group AG,Risch Report on the Audit of the Remuneration Report Opinion We have audited the Remu

262、neration Report of Sandoz Group AG(the Company)for the year ended 31 December 2024.The audit was limited to the information pursuant to Art.734a-734f of the Swiss Code of Obligations(CO)in the tables marked“audited”on pages 71,74,77,78 and pages 80 to 83 of the Remuneration Report.In our opinion,the

263、 information pursuant to Art.734a-734f CO in the accompanying Remuneration Report complies with Swiss law and the Companys articles of incorporation.Basis for Opinion We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing(SA-CH).Our responsibili-ties under those provisio

264、ns and standards are further described in the“Auditors Responsibilities for the Audit of the Remuneration Report”section of our report.We are independent of the Company in accordance with the provi-sions of Swiss law and the requirements of the Swiss audit profession,and we have fulfilled our other

265、ethical re-sponsibilities in accordance with these requirements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opin-ion.Other Information The Board of Directors is responsible for the other information.The other information comprises the

266、information included in the annual report,but does not include the tables marked“audited”in the Remuneration Report,the consolidated financial statements,the stand-alone financial statements and our auditors reports thereon.Our opinion on the Remuneration Report does not cover the other information

267、and we do not express any form of assurance conclusion thereon.In connection with our audit of the Remuneration Report,our responsibility is to read the other information and,in doing so,consider whether the other information is materially inconsistent with the audited financial information in the R

268、emuneration Report or our knowledge obtained in the audit or otherwise appears to be materially misstated.If,based on the work we have performed,we conclude that there is a material misstatement of this other infor-mation,we are required to report that fact.We have nothing to report in this regard.B

269、oard of Directors Responsibilities for the Remuneration Report The Board of Directors is responsible for the preparation of a Remuneration Report in accordance with the provi-sions of Swiss law and the Companys articles of incorporation,and for such internal control as the Board of Direc-tors determ

270、ines is necessary to enable the preparation of a Remuneration Report that is free from material mis-statement,whether due to fraud or error.The Board of Directors is also responsible for designing the remuneration system and defining individual remuneration packages.2 Auditors Responsibilities for t

271、he Audit of the Remuneration Report Our objectives are to obtain reasonable assurance about whether the information pursuant to Art.734a-734f CO is free from material misstatement,whether due to fraud or error,and to issue an auditors report that includes our opinion.Reasonable assurance is a high l

272、evel of assurance,but is not a guarantee that an audit conducted in ac-cordance with Swiss law and SA-CH will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if,individually or in the aggregate,they could reasonably be expe

273、cted to influence the economic decisions of users taken on the basis of this Remuneration Report.As part of an audit in accordance with Swiss law and SA-CH,we exercise professional judgement and maintain professional skepticism throughout the audit.We also:Identify and assess the risks of material m

274、isstatement in the Remuneration Report,whether due to fraud or error,design and perform audit procedures responsive to those risks,and obtain audit evidence that is suffi-cient and appropriate to provide a basis for our opinion.The risk of not detecting a material misstatement re-sulting from fraud

275、is higher than for one resulting from error,as fraud may involve collusion,forgery,inten-tional omissions,misrepresentations,or the override of internal control.Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumsta

276、nces,but not for the purpose of expressing an opinion on the effectiveness of the Companys internal control.Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made.We communicate with the Board of Directors or its relevant

277、committee regarding,among other matters,the planned scope and timing of the audit and significant audit findings,including any significant deficiencies in internal control that we identify during our audit.We also provide the Board of Directors or its relevant committee with a statement that we have

278、 complied with rele-vant ethical requirements regarding independence,and to communicate with them all relationships and other mat-ters that may reasonably be thought to bear on our independence,and where applicable,actions taken to elimi-nate threats or safeguards applied.KPMG AG Signatureleft Signa

279、tureright Marc Ziegler Licensed Audit Expert Auditor in Charge Stphane Nusbaumer Licensed Audit Expert Basel,4 March 2025 KPMG AG,Grosspeteranlage 5,CH-4002 Basel 2025 KPMG AG,a Swiss corporation,is a group company of KPMG Holding LLP,which is a member of the KPMG global organization of independent firms affiliated with KPMG International Limited,a private English company limited by guarantee.All rights reserved.Audit report for the Compensation ReportOverviewFinancial ReportESG DisclosuresBusiness ReportGovernance,Compensation&RiskIntegrated Annual Report 202485