II. Compensation Governance 2022

i. Overview

Pursuant to the Articles of Association of Chocoladefabriken Lindt & Sprüngli AG, the organizational regulations issued by the Board of Directors and the CNC Charter, which are all available on the website of Chocoladefabriken Lindt & Sprüngli AG, the authorities and responsibilities with regard to the compensation of the Board of Directors, the CEO and the Group Management are allocated among the Board of Directors, the CNC, the CEO, and the General Meeting.

• Articles of Association
• Organizational Regulations
• Compensation and Nomination Committee Charter

While the Board of Directors is generally responsible for determining and evaluating the remuneration system and the principles of remuneration as well as other compensation-related resolutions, including the submission of compensation-related motions to the General Meeting for approval pursuant to the Articles of Association, the CNC supports the Board of Directors with respect to all matters relating to the compensation of the Board of Directors and the Group Management as well as regarding nomination matters, including succession planning of the Board of Directors and the appointment, dismissal and succession planning of the CEO and other members of Group Management. Unless explicitly provided otherwise, in particular in the organizational regulations or the CNC Charter, the CNC supports the Board of Directors through preparatory and supporting activities and issues proposals and recommendations to the Board of Directors.

Pursuant to Article 15bis paragraph 1 of the Articles of Association, the General Meeting annually approves the proposals submitted by the Board of Directors concerning the maximum amounts of remuneration paid to the Board of Directors for the period until the next ordinary General Meeting, and of remuneration paid to Group Management for the coming financial year. The Board of Directors may submit to the General Meeting for approval proposals concerning the maximum total amounts or individual components of remuneration for other time intervals, and / or concerning supplementary amounts for special remuneration components, as well as other, conditional proposals (Article 15bis paragraph 2 of the Articles of Association).

• Articles of Association

The following table provides an overview of the approval system for the compensation for the Board of Directors, the CEO, and the other members of Group Management, including an outline of the main responsibilities of the CNC, within the framework of the compensation principles, the Articles of Association, and the resolutions of the General Meeting regarding compensation.

ii. Compensation & Nomination Committee

Article 24bis paragraph 2 of the Articles of Association of Chocoladefabriken Lindt & Sprüngli AG assigns the following tasks and competencies to the CNC:

“The Compensation & Nomination Committee shall concern itself with compensation policies, particularly at the most senior levels of the company. It shall have the tasks, decision-making powers, and authority to present motions accorded to it by the organizational regulations and the Compensation & Nomination Committee regulations. In particular, it shall assist the Board of Directors in determining and evaluating the remuneration system and the principles of remuneration, and in preparing the proposals to be presented to the General Meeting for approval of remuneration pursuant to Art. 15bis of the Articles of Association. The Compensation & Nomination Committee may submit to the Board of Directors proposals and recommendations in all matters of remuneration.”

The Articles of Association of the company are available on the website of Chocoladefabriken Lindt & Sprüngli AG.

• Articles of Association

The CNC consists, subject to the election by the Annual General Meeting, of at least three and a maximum of five members of the Board of Directors, the majority of whom shall be independent. The members of the CNC, are annually elected by the Annual General Meeting on an individual basis and with a term until the end of the next Annual General Meeting. In its meeting of October 27, 2022, the Board of Directors approved the revised CNC Charter, setting out the purpose, authority, responsibilities, and procedures of the CNC. The CNC meets as often as business requires and at the request of any of its members, but at least three times a year. The CNC chair may ask members of management or internal or external matter experts to attend the meetings. To the extent that their own compensation is directly affected (unless the discussion and decisions are about the compensation of the Board of Directors in general), the relevant member of the CNC is excluded from discussions and voting. The CNC informs the Board of Directors regularly about the procedure for the determination of compensation and the outcome of the compensation process.

The CNC Charter is available on the website of Chocoladefabriken Lindt & Sprüngli AG.

• Compensation and Nomination Committee Charter

As of December 31, 2022, the CNC consisted of the following members: Dr Rudolf K. Sprüngli (chair), Antonio Bulgheroni, and Silvio Denz. Three regular meetings were held in the reporting year, which were attended by all members. The CEO attended these meetings but excused himself when his own compensation was concerned. In 2022, the consulting services of HCM International Ltd. were used in connection with the benchmarking of the compensation paid to the Board of Directors and the Group Management.

The topics discussed by the CNC with regard to compensation during the reporting year included, amongst others, the evaluation and appointment of the new CEO, the compensation of the Board of Directors and the Group Management, a global salary review within the Group, the review and update of the CNC Charter, the setup of a new bonus and compensation structure for the Group Management as of the year 2023, the approval of the scorecards with regard to the achievement of the performance targets for the CEO and other Group Management members, the Compensation Report as well as the relevant recommendations to the Board of Directors and the discussion and review of feedback on compensation matters received from shareholders.

The CNC further regularly reviews the appropriateness of the compensation system and approaches for the Group Management and the Board of Directors, with the support of an external consultant, HCM International Ltd. The last such review was done in 2022 and lead to the advancements summarized in the first chapter “Summary of advancements to the compensation framework for 2022 & 2023” of this Compensation Report. Apart from advising the CNC on matters regarding the compensation of the Board of Directors and Group Management (incl. Benchmarking), HCM International Ltd. had no other mandates with the Lindt & Sprüngli Group in the reporting year.