Remuneration Report

Philippe Weber
Chair of the Remuneration and Nomination Committee

Dear Shareholders,

I am pleased to share with you PolyPeptide’s Remuneration Report for 2023. This was a transformational year for PolyPeptide, one in which the Board of Directors, with the support of the Remuneration and Nomination Committee, focused on repositioning the Group for growth. A major focus area for the Remuneration and Nomination Committee in 2023 was the Group’s leadership team, with PolyPeptide experiencing significant transition among the members of the Executive Committee.

The Remuneration and Nomination Committee led the search for the new CEO and was committed to identifying a candidate who had the leadership skills and relevant experience to drive PolyPeptide’s growth and expansion plans. In April 2023, the Board of Directors, following the Remuneration and Nomination Committee’s recommendation, was pleased to announce the appointment of Juan José González as the Group’s new CEO. The Remuneration and Nomination Committee is convinced that with his track record and broad background in different healthcare sectors and geographies, Mr. González has the right set of skills, experience and vision to lead PolyPeptide. At the same time, the Group announced that its then current CFO had resigned, with Lalit Ahluwalia assuming the role of CFO ad interim. The Remuneration and Nomination Committee embarked on a further executive search and was pleased to recommend Marc Augustin to the Board of Directors as the Group’s new CFO in August 2023. The Remuneration and Nomination Committee strongly believes that Mr. Augustin’s background in a high-growth CDMO environment with deep finance and operational experience will prove highly valuable as PolyPeptide continues to scale up its operations. During the search for a new CEO and the subsequent transition period, the Chair of the Board of Directors and member of the Remuneration and Nomination Committee, Dr. Peter Wilden, assumed the role of Executive Chair. The Remuneration and Nomination Committee thanks Dr. Wilden for accepting the additional responsibilities during this critical time for PolyPeptide.

Overall, the transition among the Group’s top management from late 2022 onwards required significant engagement from the Remuneration and Nomination Committee to ensure the appropriate identification and successful recruitment of candidates. These efforts also included a review of the remuneration structures used for executive management. As a result of these personnel changes, 2023 was a year of transition in terms of executive remuneration as well, as further described in this Remuneration Report (see Table 13 as well as the accompanying commentary).

In addition to focusing on succession within the Group’s Executive Committee, the Remuneration and Nomination Committee performed its regular compensation-related activities in the reporting year. They included the annual review of the Group’s remuneration programs, analysis of an updated compensation benchmark desk research for the Board of Directors, performance goal setting for the Executive Committee and the performance assessment at year-end. The Remuneration and Nomination Committee also recommended the remuneration for the members of the Board of Directors and Executive Committee, while also preparing this Remuneration Report and the say-on-pay votes for the annual general meeting. This Remuneration Report contains further details on the activities of the Remuneration and Nomination Committee throughout 2023.

One high priority for the Remuneration and Nomination Committee, and its entrusted material ESG topic, is PolyPeptide’s “People”. PolyPeptide’s employees are one of its most important assets, and it strives to offer employees a fair, inclusive, and respectful work environment with development opportunities. PolyPeptide aims to be an employer of choice in its sector, an ambition that requires a compensation framework designed to attract, motivate and retain the qualified talent PolyPeptide needs to succeed globally. Going forward, the Remuneration and Nomination Committee will work with the Group’s Chief Human Resources Officer to further strengthen PolyPeptide’s attractiveness and retention of existing and future talents, drive fair and equitable remuneration policies and practices aligned with PolyPeptide’s sustainability ambitions as well as its diversity, inclusion and well-being initiatives. These efforts are also expected to enhance PolyPeptide’s performance and yield excellent returns for shareholders.

Looking ahead to 2024, the Remuneration and Nomination Committee will continue to proactively assess and review the Group’s remuneration programs to ensure that they are fit for purpose in the interconnected world in which PolyPeptide operates, remaining competitive and rewarding individual performance, competence and desired behaviors in line with PolyPeptide’s values and leadership principles. Throughout 2024, we plan to revise the structure and eligible pool of participants for the Group’s long-term incentive program, with the goal of recalibrating performance targets to support PolyPeptide’s key strategic ambitions. Applicable changes to the long-term incentive plan in 2024 will be described in PolyPeptide’s Remuneration Report for 2024.

We also appreciate the importance of ESG topics to all stakeholders and as PolyPeptide develops its sustainability targets further, the Remuneration and Nomination Committee is committed to further aligning the targeting and fulfillment of these sustainability objectives with the variable remuneration of PolyPeptide’s management.

We encourage candid dialogue with PolyPeptide’s shareholders as we continue to evolve and improve PolyPeptide’s remuneration structure. At the annual general meeting in April 2024, you will have the opportunity to express your opinion on PolyPeptide’s remuneration policies, principles and elements through a consultative vote on this Remuneration Report. We will also be seeking your approval of the aggregate compensation amount to be awarded (i) to the Board of Directors for the period until the next general meeting in 2025 and (ii) to the Executive Committee for the financial year 2025. We respectfully request your endorsement of these agenda items at the annual general meeting in April 2024.

On behalf of the Board of Directors and the Remuneration and Nomination Committee, I would like to thank you for your trust and your ongoing support during this period of transformation.

Sincerely,

Philippe Weber
Chair of the Remuneration and Nomination Committee