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Proxy Report- 15/06/2018

Item 4: In financial year 2017, based on a recommendation by its Executive Committee, the Supervisory Board resolved to implement changes to the remuneration system for the Management Board. According to the Company, these amendments were based on a review of the previous remuneration system by an external remuneration consultant.

The main changes, which will apply from financial year 2018 onwards, relate to the performance criteria of the annual bonus and their weighting, the introduction of a new long-term incentive (LTI) in the form of a cash payment as part of a performance cash plan and the introduction of share ownership guidelines. We raise our concerns over the fact that the new remuneration system for the Management Board has not been put to shareholder approval at this year's AGM. In line with our guidelines we would in principle recommend opposing the discharge of the Chairman of the Supervisory Board's Executive Committee, Uwe E. Flach. Furthermore, the term of office of Supervisory Board Chairman Uwe E. Flach expires at the close of the AGM 2018 and is not proposed to be renewed. In deviation from the respective recommendation of the German Corporate Governance Code, which the Company has announced to adhere to, the proposed candidate for the position of Chairman after the AGM is not disclosed. We raise our concerns over this lack of transparency. In line with our guidelines we would in principle recommend opposing the discharge of the Chairman of the Supervisory Board's Nomination Committee, Uwe E. Flach. As the discharge is proposed in a bundled resolution, we recommend shareholders to oppose the discharge of the Supervisory Board as a whole.