4. Compensation system framework

4.1 Board of Directors

4.1.1 Fixed compensation

Each member of the Board of Directors receives a fixed compensation, which is prospectively determined by the Annual General Meeting, which can vary depending on their function on the Board of Directors and board committees. The compensation system thus takes into account the responsibility and roles assigned to individual members of the Board of Directors. The additional duties of the Chairman in leading the Board of Directors and his function as a link between the Company’s operational and strategic management are compensated with a higher fee. The amount of fixed compensation paid is determined at the Board’s own discretion, in compliance with the general compensation principles (see section 2.1 above).

The base compensation of every member of the Board of Directors is determined annually and paid out on a quarterly basis. If a director leaves the Board before their term of office expires, the fixed compensation will be calculated on a pro rata basis to the end of the quarter of separation.

4.1.2 Variable compensation

Since the 2023 Annual General Meeting, the Board of Directors will no longer receive a variable remuneration.

4.1.3 Business expenses

Members of the Board of Directors do not receive fixed expense allowances; the actual expenses incurred are reimbursed.

4.1.4 Pension plan coverage

The members of the Board of Directors are not covered by the Company’s pension plan.

4.1.5 Voluntary employee stock ownership plan

The Board of Directors occasionally offers voluntary employee stock ownership plans under which members of the Board of Directors may also be entitled to purchase Company shares at a discount to the given market price. The maximum discount on the date of the offer is 25%. The difference between the 10-day VWAP at the time the shares are transferred and the purchase price corresponds to the monetary benefit. The allotment is made in shares blocked for 3 years.

4.1.6 Advisory services

Subject to approval at the Annual General Meeting, members of the Board of Directors can be compensated in cash at standard market rates for advisory services benefiting the Company or a Group subsidiary that go beyond their duties and responsibilities as a director.

4.2 Group Executive Board

The components of compensation paid to the Group Executive Board are generally as follows:

4.2.1 Fixed compensation

The members of the Group Executive Board receive a fixed amount of base compensation that is determined annually for each financial year and that is partial prospective approved by the Annual General Meeting. The payout is in cash. These amounts are determined individually at the Board’s own discretion in compliance with the general compensation principles (see section 2.1 above), taking into account the duties and responsibilities assigned to each member of the Group Executive Board. From an entrepreneurial point of view, a restrained policy is applied to the determination of fixed compensation of the members of the Group Executive Board.

4.2.2 Variable compensation (share of profit)

The variable compensation of the members of the Group Executive Board is based on a performance review, measured against goals and expectations that are fixed in advance annually. The pool for variable remuneration described under 3.4 changes depending on target achievement. The individual allocation takes into account each individual’s role, experience and personal performance as well as the market environment. The weighting of these elements is determined individually.

Variable compensation is basically structured and paid out as follows:

• Short-term variable compensation in cash
• Short-term variable compensation in the form of restricted shares
• Short-term variable compensation in the form of restricted shares with a vesting period and claw back provisions
• Other short-term variable compensation
• Long-term variable compensation

The structure of the variable compensation and the lock-up, vesting and claw back provisions are determined by the Board of Directors or its Compensation Committee, depending on the role and the amount of the designated individual variable compensation.

Variable compensation in the form of restricted shares is reported as short-term compensation despite the long-term nature of such compensation. This is because, as of the current reporting period, no stock option plans for shares of the Company exist; accordingly, compensation is granted exclusively in the form of share entitlements (restricted share awards).

Short-term variable compensation components are subject to retrospective approval by the Annual General Meeting, while the long-term variable compensation components are partially subject to a prospective vote.

The following provisions apply with respect to the payment of short-term variable compensation:

Long-term variable compensation is paid out in shares.

Following several challenging financial years and a period of strategic and operational adjustments, Bellevue Group has systematically aligned its business model with the evolving market environment. Against this backdrop, the Board of Directors attaches central importance to a long-term, performance-oriented compensation structure as a key driver of sustainable value creation for Bellevue Group. The Board of Directors therefore intends to introduce a share-based option plan for the members of the Group Executive Board as well as for executives and employees in the 2026 financial year. The option plan forms part of Bellevue Group’s long-term compensation strategy and is designed to further strengthen the «pay for performance» principle. By linking a portion of variable compensation more closely to the sustainable development of the share price of Bellevue Group AG, the interests of participants are to be aligned even more closely with those of the shareholders, entrepreneurial thinking is to be encouraged, and additional incentives are to be created for the long-term retention of key personnel. Under the option plan, options will be granted to eligible participants based on their function, level of responsibility and contribution to long-term value creation. The options to be granted in the 2026 financial year will be subject to a three-year vesting period and will generally lapse if the employment relationship is terminated prior to the end of the vesting period.

The introduction and implementation of the option plan, as well as its specific terms and conditions, are subject to shareholder approval of the required amendments to the Articles of Association at the 2026 Annual General Meeting. The Board of Directors reserves the right to adjust the design of the option plan prior to its implementation in response to changes in legal, regulatory or economic conditions.

4.2.3 Business expenses

Members of the Group Executive Board do not receive fixed expense allowances; the actual expenses incurred are reimbursed.

4.2.4 Pension plan coverage

The members of the Group Executive Board are enrolled in the standard pension plan offered to all employees in Switzerland. This pension plan only covers the base pay of all employees.

4.2.5 Long-term incentive plans at investment companies

BB Biotech AG and Bellevue Healthcare Trust plc, Bellevue Group’s investment companies, are independent companies listed on multiple stock exchanges and they are managed and overseen by their own independent Board of Directors. Among the requirements stipulated by the boards of these companies with respect to the investment teams at Bellevue Group that have been retained by these companies was the establishment of long-term incentive plans that are in alignment with the expectations and interests of the shareholders of the investment companies.

Team members in the operating units who provide services related to mandates from the listed investment companies may participate in employee stock ownership plans that have been set up in conjunction with the asset management mandates of BB Biotech AG and Bellevue Healthcare Trust plc. Within the scope of these plans, some of the members of the Group Executive Board can be entitled to receive a maximum number of shares in BB Biotech AG and/or Bellevue Healthcare Trust plc. The actual number of shares awarded depends on various conditions. Awarded shares are subject to a three-year vesting period beginning on the date of grant. In addition, the actual number of shares distributed will depend on the achievement of certain performance targets over the subsequent three fiscal years in connection with the respective investment mandates. The maximum number of shares will be distributed only if the absolute performance of the respective mandates during the subsequent three years exceeds the mark of 10% p.a. and the relative performance of the respective mandates is better than that of the relevant indexes. There is no entitlement of shares if the absolute performance of the respective investment mandates during the three-year period is less than 5% p.a. and does not exceed the performance of at least one of the relevant indexes.

The long-term incentive plans in place at the investment companies are treated as long-term variable compensation.

4.2.6 Voluntary employee stock ownership plan

The Board of Directors occasionally offers voluntary employee stock ownership plans under which all Company employees are entitled to purchase Company shares at a discount to the market price. The maximum discount on the date of the offer is 25%. The difference between the 10-day VWAP at the time the shares are transferred and the purchase price corresponds to the monetary benefit. The allotment is made in shares blocked for 3 years.

In essence, the voluntary employee stock ownership plans described above are not elements of the Company’s compensation policy.

4.2.7 Employment conditions

Members of the Group Executive Board have permanent employment contracts with a notice period of three months. Members of the Group Executive Board are not entitled to severance pay.

4.3 Management and employees

Compensation components paid to management and other employees are as follows:

For further details on the compensation system for middle management and other employees, please refer to section 4.2, as it does not differ from the compensation system in place for the Group Executive Board.