EUR 1000.00 For Business Accounts Only

Deutsche Telekom - AGM 01 April 2021

General: The AGM is to be held in the form of a virtual AGM in accordance with the German Law to Mitigate the Consequences of the COVID-19 Pandemic. The physical presence of shareholders or their authorised proxies is not possible. The voting rights may therefore be exercised solely by postal vote or by granting authority to the proxies designated by the Company.

DSW, the local partner of ECGS, requested that an item be added to the agenda, see below for details. As DSW has also prepared this report, we point to a potential conflict of interest which we consider has been mitigated by using standard ECGS guidelines and by ensuring that this report has been subject to a thorough control by Proxinvest, the ECGS Managing Partner.

Item 4: We recommend to oppose the discharge of the Supervisory Boad due to our concerns over the granting of a special bonus in the amount of EUR 600,000 to CEO Timotheus Höttges for the performance of activities in connection with the successful finalisation of the business combination of T-Mobile US and Sprint in financial year 2020. In line with our guidelines we would in principle recommend opposing the discharge of the Chairman of the Supervisory Board's General Committee ("Chairman's Committee"), Prof. Dr. Ulrich Lehner. However, as the discharge is proposed in a bundled resolution we recommend shareholders to oppose the discharge of the Supervisory Board as a whole.

Item 10: Approval is sought for the remuneration system for the Management Board which is applicable since financial year 2021. Disclosure is in line with market practice. However, the Company fails to disclose the future base salary amounts and absolute target amounts for the variable remuneration components. The relative shares of the individual remuneration components as part of the (undisclosed) total target remuneration are nevertheless published. Some of the changes are considered as improvements, in particular the introduction of non-financial ESG targets to the annual bonus and the abolition of pension commitments for newly appointed Management Board members. However, we raise our concerns over the following features of the remuneration system: The remuneration is structured in a way that allows for payments potentially being made to Management Board members which exceed the thresholds acceptable by ECGS. Furthermore, the Supervisory Board may continue to grant a special bonus to members of the Management Board for extraordinary performance. Finally, the existing Share Matching Plan provides for matching shares awarded at a ratio equal to 1-for-1 and does not include any performance conditions which is not in line with ECGS guidelines. We therefore recommend to oppose the approval of the remuneration system for the Management Board members.

Item 11: Following the convocation of the AGM, Deutsche Schutzvereinigung für Wertpapierbesitz e.V. (DSW), the German partner of ECGS, requested that a further item be added to the agenda. DSW proposes that § 16 (3) of the Company's Articles of Association be amended by adding a sentence 2: "If the shareholders' meeting is held as a virtual meeting, the shareholders shall be granted a right to request information in accordance with § 131 AktG as well as a right to speak in the shareholders' meeting." DSW requests this change of the Articles of Association because the Company, in line with minimum legal requirements for virtual AGMs, restricts the shareholders' rights to ask questions or speak up during the AGM. As it is currently unforseeable whether the COVID-19 pandemic might impact AGMs also beyond the end of 2021 at which shareholders' rights might continue to be restricted in the same way as at this AGM, we consider the proposed amendment to the Company's Articles of Association as a necessary measure to secure all shareholders' rights with regard to future virtual shareholders' meetings of Deutsche Telekom AG. We therefore recommend to support the proposed amendment to the Articles of Association.