Letter to shareholders

Dear shareholders,

As the new Chair of the Nomination and Compensation Committee (NCC), I am pleased to present SoftwareOne’s 2024 Compensation Report on behalf of the NCC and the Board of Directors (BoD).

Our 2024 Compensation Report outlines SoftwareOne’s overall compensation policy, principles, and framework and discloses the compensation awarded to members of both the BoD and the Executive Board (EB) for the 2024 financial year. It is compiled in accordance with the relevant sections of the Swiss Code of Obligations (Swiss CO), particularly Article 734 et seq., applicable to Swiss listed companies, the Directive on Information related to Corporate Governance of SIX Swiss Exchange, as well as the Swiss Code of Best Practice for Corporate Governance.

At the 2024 Annual General Meeting (AGM) the shareholders’ approval rate of the 2023 Compensation Report stood at a disappointing 66.54%, for the maximum aggregate compensation amount for the EB at a moderate 72.21%, and for the maximum aggregate compensation amount for the BoD at 84.78%, revealing a need for realignment with shareholders’ expectations. As a result, we have carefully analysed the factors behind these outcomes and taken steps to address them by adjusting compensation levels for new members appointed to the EB, by refining our compensation approach and by placing a strong focus on enhancing transparency in compensation decisions and related matters moving forward.

During the 2024 financial year, we navigated a dynamic and challenging landscape across both our business operations and market conditions. While group revenue growth and the adj. EBITDA margin aligned with the latest guidance, they did not meet the targets set for both the 2024 STI (cash bonus) and LTI (Long-Term Incentive) granted in 2022 (performance period ending in 2024). Additionally, our share price declined significantly, impacting rTSR performance. These outcomes were reflected in the performance-based variable compensation awarded to the EB. Following its evaluation, the NCC concluded that both the 2024 STI (cash bonus) and the LTI vesting level (granted in 2022 for the performance period 2022 to 2024) provided a reasonable reflection of the company’s performance. Accordingly, no discretionary adjustments were made in measuring performance results or determining variable compensation amounts.

In parallel, the year saw significant changes at the leadership level. Following the outcome of the 2024 AGM, the size of the BoD was reduced from eight to five members, which subsequently led to a consolidation of its committees into the Audit Committee, NCC, and Transaction Committee. To account for the increased workload and responsibilities resulting from this change, Committee Chair fees were adjusted accordingly (for details, see section Board of Directors compensation). In the second half of the year, we welcomed our new CEO, Raphael Erb, and the new President of Software and Cloud, Oliver Berchtold.

Further, the NCC continued supporting the BoD in regular nomination and compensation matters such as determining individual compensation amounts, setting performance targets, assessing performance achievements for the variable compensation programmes, preparing compensation report and “say-on-pay” proposals, as well as succession planning for both the EB and the BoD.

The AGM provides a key opportunity for shareholder input. At the 2025 AGM, shareholders will vote on the maximum aggregate compensation amounts for the BoD and the EB, as well as providing feedback on this Compensation Report. We encourage you to review the AGM invitation for further details.

On behalf of the NCC, I would like to thank you for your trust and engagement. Your feedback plays a vital role in shaping a compensation framework that balances shareholder interests with SoftwareOne’s long-term objectives. We remain committed to fostering open dialogue and ensuring that our compensation practices align with the company’s strategic priorities.

Sincerely,

Andrea Sieber

Chair of the Nomination and Compensation Committee