Philippe Weber
Chair of the Remuneration and Nomination Committee

Dear Shareholders,

I am pleased to present PolyPeptide’s Remuneration Report for 2024.

Complementing our Management, Corporate Responsibility, Corporate Governance and Financial Reports, this Remuneration Report describes PolyPeptide’s compensation system and its governance as well as the underlying principles that ensure compensation, particularly the variable incentive components, is linked to PolyPeptide’s strategic objectives and overall performance. Furthermore, this Remuneration Report offers insight into the Remuneration and Nomination Committee’s key activities during 2024.

One important focus area in 2024 has been the revision of the Group’s long-term incentive program (LTIP). With the assistance of an external independent advisor on remuneration matters, the Remuneration and Nomination Committee critically reviewed the structure of the LTIP, with the goal to recalibrate the performance metrics to support PolyPeptide’s key strategic ambitions and facilitate immediate performance improvements, while unlocking long-term success. The Remuneration and Nomination Committee sought to establish an approach that fosters a culture of sustainable, high-quality performance with appropriate risk-taking. Following an iterative process, which included an industry and peer review, the Remuneration and Nomination Committee recommended three key performance metrics: (i) revenue to lay a solid foundation for the Group’s targeted future growth, (ii) EBITDA to focus management’s energy on restoring operational performance and profitability and (iii) Total Shareholder Return to promote capitalization recovery and enable a balanced view of the Group’s performance by taking into account PolyPeptide’s shareholders’ perspective. Later in this Remuneration Report, we describe in more detail the weighting for each of the performance metrics and how the targets were set in 2024. To ensure broader alignment with strategic objectives and embed a shared commitment to PolyPeptide’s long-term success, the Remuneration and Nomination Committee recommended the expansion of the eligible pool of participants to include all members of the PolyPeptide Management Committee and other key members of the Group’s senior management.

Alongside the new performance metrics under the LTIP, the Remuneration and Nomination Committee further reviewed the performance metrics of the Group’s short-term incentive program (STIP). To drive engagement and coordinated efforts among the Executive Committee, the weighting and allocation of the STIP performance metrics are now the same for all members of the Executive Committee, with 85% dependent on Group-wide performance criteria and the balance on individual objectives. In addition, we recognize the growing significance of ESG topics to all stakeholders. Therefore, STIP Group-wide performance metrics include not only financial objectives but also sustainability targets. In the following sections of this Remuneration Report, we provide further insights into the STIP performance metrics and the target setting approach for 2024.

We believe that the revisions to both the LTIP and STIP align with the expectations of our shareholders and reflect our ongoing commitment to transparently aligning compensation strategies with PolyPeptide’s priorities, ensuring that variable compensation is closely tied to performance as well as sustainable value creation.

Succession planning for the Board of Directors was another key priority for the Remuneration and Nomination Committee. Following a targeted search, upon the recommendation of the Remuneration and Nomination Committee, the Board of Directors has announced the nomination of Jo LeCouilliard as a new independent member of the Board of Directors to stand for election at the annual general meeting 2025 (“AGM 2025”). Ms. LeCouilliard brings significant expertise to the Board in the area of healthcare management, and her financial background will enhance the Board’s strategic financial oversight and risk management. After serving for four years, Beat In-Albon has decided not to stand for re-election at the AGM 2025. The Remuneration and Nomination Committee, together with the Board of Directors, thanks Mr. In-Albon for his dedicated service and valuable contributions.

In addition to its focus on PolyPeptide’s variable incentive programs and succession planning among the Board of Directors, the Remuneration and Nomination Committee carried out its other regular tasks during the reporting year. As described further on in this Remuneration Report, the Remuneration and Nomination Committee reviewed an updated compensation benchmark desk research for the Board of Directors and Executive Committee, conducted the Executive Committee’s 2023 performance assessment and set the performance goals for 2024. The Remuneration and Nomination Committee also recommended remuneration for the members of the Board of Directors and Executive Committee, while preparing this Remuneration Report and the say-on-pay votes for the AGM 2024.

One high priority for the Remuneration and Nomination Committee, and its entrusted material ESG topic, remains PolyPeptide’s “People”. Indeed, at PolyPeptide, employees are recognized as one of the Company’s most important strengths. The organization is committed to fostering a fair, inclusive, and respectful work environment that offers meaningful development opportunities. In 2024, the Remuneration and Nomination Committee evaluated together with the Group’s Chief Human Resources Officer PolyPeptide’s organizational initiatives around talent management, including assessing the Group’s first Group-wide talent review process conducted across all sites and global functions. Striving to be an employer of choice in its sector, PolyPeptide recognizes the importance of culture and leadership development as well as a robust compensation framework to attract, motivate, and retain the highly qualified talent essential for global success. The Remuneration and Nomination Committee will continue to collaborate with the Group’s Chief Human Resources Officer to enhance PolyPeptide’s appeal to both current and future employees. This includes advancing fair and equitable remuneration policies and practices aligned with PolyPeptide’s sustainability goals, diversity and inclusion initiatives, and well-being strategies. By prioritizing these efforts, PolyPeptide aims to strengthen its workforce, drive sustainable performance, and cultivate behaviors that reflect the company’s values.

Looking forward to 2025, the Remuneration and Nomination Committee will continue to proactively evaluate and review the Group’s remuneration programs. We are confident that our revised variable incentive structures and processes align with market standards, as well as the interests of our shareholders and other key stakeholders, and effectively support our compensation strategy to attract, motivate and retain the right talent. Nevertheless, the Remuneration and Nomination Committee will continue to regularly monitor developments and to assess opportunities for further development.

We welcome an open dialogue with PolyPeptide’s shareholders as we continue to refine and enhance our remuneration structure. At the AGM 2025, you will have the chance to share your views on PolyPeptide’s remuneration policies, principles, and elements through a consultative vote on this Remuneration Report. Additionally, we will seek your approval for the total compensation amounts to be awarded (i) to the Board of Directors for the period until the next general meeting in 2026 and (ii) to the Executive Committee for the financial year 2026 (binding votes). We respectfully request your approval of these agenda items at the AGM 2025.

On behalf of the Board of Directors and the Remuneration and Nomination Committee, I extend our gratitude for your trust and continued support during this transformative period.

Sincerely,

Philippe Weber
Chair of the Remuneration and Nomination Committee