Compensation governance

The compensation governance at SoftwareOne comprises three key bodies: the NCC which advises the BoD in terms of compensation-related matters, the BoD which ultimately approves the compensation-related matters, and the shareholders of SoftwareOne who vote on total compensation and the compensation report at the AGM.

The Articles of Incorporation, the Organisational Regulations and the NCC Charter outline and define the roles and responsibilities of these bodies. The Articles of Incorporation of SoftwareOne contain compensation governance provisions regarding:

• Approval (binding and prospective) of compensation by the shareholders at the AGM, Art. 7 and 19
• Powers and duties of the NCC, Art. 15
• General principles of compensation, Art. 18
• Additional amount for the EB, Art. 20

The general division of duties, responsibilities, and powers between these three key bodies of the compensation governance (NCC, BoD and AGM) are presented in the table below, in line with Art. 7 and Art. 19 of the Articles of Incorporation.

Role of the shareholders at the AGM

The BoD submits three separate compensation-related resolutions for shareholder approval at the AGM (Art. 7 and Art. 19):

• Vote I: Consultative vote for the Compensation Report of the previous financial year
• Vote II: Binding vote on the maximum aggregate amount of compensation of the BoD for the term of office from the current to the next AGM
• Vote III: Binding vote on the maximum aggregate amount of compensation of the EB for the following financial year

The graph below illustrates these compensation-related resolutions for shareholder approval at the 2024 AGM and illustrates their impact on the respective financial year:

Overview of say-on-pay votes at AGM 2024

Role and activities of the Nomination and Compensation Committee

The NCC is composed of at least three members of the BoD (Art. 15) who are elected individually at the AGM by the shareholders on an annual basis pursuant to Swiss law and SoftwareOne’s Articles of Incorporation. The NCC has the duties of supervision and governance of SoftwareOne’s compensation frameworks and philosophy, compensation of the EB as well as the performance evaluation of EB members. The NCC regularly invites the CEO and may invite other members of the Executive Board or, subject to prior notification of the responsible member of the EB, members of the company’s management to its meetings as it deems desirable or appropriate. However, the CEO or other members of the EB may not be present when the NCC reviews the compensation or other aspects of the employment of the respective person. The Chair of the Board or the Chair of the NCC may not be present when the NCC reviews the compensation of the respective person. The Chair of the NCC ensures that the BoD is kept informed in a timely and adequate manner during the term of office regarding the NCC’s area of responsibility. Please refer to the Corporate Governance Report section for further details on NCC composition, duties, election and NCC members.

Information regarding external mandates for all Board and Executive Board members are provided later in this report. The Chair of the NCC convenes NCC meetings as often as required by SoftwareOne’s business, but at least three times a year. During 2023, the NCC held seven meetings covering the following agenda items as illustrated in the table below:

Two meetings took place in February. In addition, the NCC met in a separate session in August to review the LTI framework.

Regular compensation benchmarking for Executive Board and Board of Directors

To evaluate SoftwareOne’s positioning in the market and overall competitiveness, the NCC regularly conducts market benchmarks to assess the compensation structure and level for both the BoD and the EB. The peer selection process is based on the company services and products, geographical relevance, size and scope.

Peer group and benchmarking

Information on peer company compensation is an important point of reference to assess the market competitiveness of the compensation awarded to members of the EB. The NCC believes that benchmarking against a consistent and relevant set of peer companies that are similar to SoftwareOne in scope, products and services offered and geographical presence, enables the company to set pay levels towards the middle of the respective market range. The peer group is adjusted in case the Company updates its strategic direction or business model. This reinforces the talent attraction, motivation and retention efforts needed to support the company’s long-term success.

For the Executive Board, the NCC adopted a comprehensive approach to the peer group construction in March 2023, which led to the compilation of two complementary peer groups: a peer group of selected, size-comparable European technology companies^[1], including a relevant number of Swiss companies, to reflect compensation traditions at our headquarter location, as well as a peer group of selected US companies^[2] to better represent SoftwareOne’s international footprint and talent pool.

The choice of the selected peer companies – compiled together with Willis Towers Watson - provides a good mix between the industries and geographies from which key talents are sourced. When setting the EB’s pay levels, the NCC targeted a balanced view between both perspectives.

The resulting adaptations and alignments to compensation packages of the EB intended to bring the total compensation levels slightly above or at the median of the selected peers, thereby mainly focusing on long-term performance-based variable compensation elements.

The assessment of the competitiveness of the BoD compensation for non-executive BoD members in Switzerland was last assessed in 2023 through a benchmarking analysis conducted by Mercer targeting compensation levels as well as compensation structure and pay instruments. The selected peer group consists of 18 Swiss listed companies^[3] of similar size concerning revenues, FTE, and market capitalisation, allowing for an adequate and representative comparison.

The benchmarking exercise showed that the compensation of the members of the Board of Directors was in line with general market practice, both in terms of level and structure. It was concluded that the current levels of compensation will be kept as such for the time being, except for a small adjustment for the Vice Chair as it was below market average level. At the same time, the Board of Directors decided to create two additional committees as of the AGM 2023: an Innovation Committee and an ESG Committee. The fees for these committees lie below those for the other committees as illustrated on section Board of Directors compensation.

[1] Amadeus IT Group, S.A., Atos SE, Bechtle AG, Cancom SE, Computacenter plc, Softcat plc, Software AG, Sopra Steria Group SA, The Sage Group plc, Temenos AG, Logitech International SA, ams-OSRAM AG, TeamViewer SE, Darktrace plc. Sinch AB

[2] Globant SA, Insight Enterprises, Inc., Thoughtworks Holding, Inc., Unisys Corporation, Endava plc, FTI Consulting, Inc., Gen Digital, Inc., ICF International, Inc., Rackspace Technology, Inc., TriNet Group, Inc.

[3] ALSO Holding AG, Arbonia AG, Aryzta AG, Bell Food Group AG, Comet Holding AG, Daetwyler Holding AG, dormakaba Holding AG, Galenica AG, Inficon Holding AG, Landis+Gyr Group AG, Logitech International SA, OC Oerlikon Corp AG, Orascom Development Holding AG, Phoenix Mecano AG, Rieter Holding AG, Stadler Rail AG, Sulzer AG, Temenos AG.