III. Compensation governance

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 duties and responsibilities related 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

The Board of Directors is generally responsible for several compensation-related matters, including the determination and evaluation of the remuneration system, the principles of remuneration and the submission of compensation-related motions to the General Meeting for approval. Unless explicitly provided otherwise, in particular in the Organizational Regulations or the CNC Charter, the CNC supports the Board of Directors with respect to all matters relating to the compensation of the Group Management and the Board of Directors, as well as regarding nomination matters and succession planning.

Pursuant to Article 15^bis paragraph 1 of the Articles of Association, the General Meeting annually approves the motions submitted by the Board of Directors concerning the maximum amount of compensation paid to the Board of Directors for the period until the next Annual General Meeting, and to Group Management for the coming financial year. The Board of Directors may submit to the General Meeting for approval motions concerning the maximum total amounts or individual components of compensation for other time intervals, and/or motions concerning supplementary amounts for special compensation components, as well as other conditional proposals. In addition, if variable compensation is voted on prospectively, the Compensation Report must be submitted by the Board of Directors to the General Meeting in the subsequent year for an advisory vote (Article 15^bis paragraph 2 of the Articles of Association).

The following table provides an overview of the approval system for the compensation of the members of the Board of Directors, the CEO, and the other members of the Group Management. It also includes 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 (CNC)

The CNC plays an important role in the compensation governance of the Lindt & Sprüngli Group and supports the Board of Directors in a comprehensive manner in all compensation-related matters. Article 24^bis paragraph 2 of the Articles of Association of Chocoladefabriken Lindt & Sprüngli AG assigns the following duties 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. 15^bis 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 are available on the website of Chocoladefabriken Lindt & Sprüngli AG.

• Articles of Association

Within the framework set by the Articles of Association, the purpose, authority, responsibilities and procedures of the CNC are governed by the CNC Charter, which is set by the Board of Directors.

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

• Compensation and Nomination Committee Charter

The topics addressed by the CNC with regard to compensation during the reporting year included, inter alia, the compensation of the Board of Directors and the Group Management, a global salary review within the Group, the introduction of the new compensation framework for the Group Management as of the reporting year, 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 and the relevant recommendations to the Board of Directors, and the discussion and review of feedback on compensation matters received from shareholders and shareholder representatives. The CNC regularly informs the Board of Directors about the procedure for the determination of compensation and the outcome of the compensation process.

The CNC also regularly reviews the appropriateness of the compensation system and approaches for the Group Management and the Board of Directors, with the support of HCM International Ltd, an external consultant. The last such review was done in 2022 and led to certain advancements in the compensation framework, which entered into force in the reporting year and are reflected in this Compensation Report. Apart from advising the CNC on matters regarding the compensation of the Group Management and the Board of Directors, HCM International Ltd. had no other mandates with the Lindt & Sprüngli Group in the reporting year.

• Information on the composition and meetings of the CNC