In deviation from section B.3, the Supervisory Board may also appoint members of the Management Board for longer than three years - generally five years. In the Company's view, this is particularly justifiable if the new member of the Management Board has many years of management experience within Carl Zeiss Meditec AG or an affiliated company of the ZEISS Group.

Contrary to Section C.1 DCGK 2020, the Supervisory Board has not specified any specific targets with regard to its composition. The Supervisory Board has also not specified any competency profile for the board as a whole and this is therefore also not published in the Declaration on Corporate Governance. The Supervisory Board believes that the composition of the board should be geared, first and foremost, to the interests of the Company, and should guarantee efficient support and monitoring of the Management Board. Accordingly, when appointing the Supervisory Board of Carl Zeiss Meditec AG, the priority shall therefore be to ensure that the members have the necessary capabilities, skills and specialist qualifications to properly fulfill their duties, and that they are independent. The Supervisory Board believes that the necessary competencies of the board as a whole have been adequately considered.

Contrary to Section D.6, the members of the Management Board attend the meetings of the Supervisory Board in accordance with the Supervisory Board’s rules of procedure, unless the Chairman of the Supervisory Board specifies otherwise. The Management Board provides the Supervisory Board with regular, up-to-the-minute, comprehensive information, particularly about corporate strategy, planning, the development of business, the risk situation, risk management, compliance, the focus of innovation and about any deviations of business development from original planning, as well as important business transactions of the Company and major subsidiaries of the Group. The Supervisory Board uses its meetings for regular, detailed exchange with the Management Board. For certain issues, the Supervisory Board convenes alone during the plenary session.

According to the current state of discussions, the Management Board remuneration system resolved by the Annual General Meeting on 22 March 2023 and to be applied for all new Management Board contracts deviates from the following recommendations of the DCGK 2022:

Section G.4 states that in order to assess the customary practice within the Company, the Supervisory Board should consider the relationship of the remuneration of the Management Board to the remuneration of senior management and the workforce as a whole and also consider how this has developed over time. Contrary to this, the new remuneration system does not provide for any comparison of the remuneration of the Management Board with the remuneration of senior management and the workforce as a whole. As the remuneration of the Management Board is capped, its appropriateness with regard to the remuneration structure is not called into question. A vertical comparison is therefore not necessary in the Supervisory Board’s opinion. A comparison with the remuneration of senior management and the workforce as a whole is also not sufficiently meaningful in the Supervisory Board’s view. Due to the international nature of the Company, its various locations worldwide and the associated regional differences, salary structures are very different, which would not provide any meaningful transparency if compared with the remuneration of the Management Board.

According to Section G.6, the variable remuneration, which is determined based on the achievement of long-term objectives, should exceed the proportion of remuneration arising from short-term objectives. Contrary to this, under Carl Zeiss Meditec AG’s remuneration system, the inflow of funds from the Short-Term Incentive Program (STI) shall generally be higher than that from the Long-Term Incentive Program (LTI). However, the maximum amount achievable under the LTI may exceed the STI amount. The LTI and fixed remuneration as well as the selection of key performance indicators (KPIs) to be applied create and thus ensure a long-term incentive effect. In the Supervisory Board’s view, the current system has proved successful in the past.

Pursuant to Section G.8, a subsequent amendment of the targets or comparative parameters should be excluded. Although the principle is taken into account in the new remuneration system when adjusting the personal variable remuneration (STI component) during the year, it deviates in the STI financial targets and LTI parameters. It should be possible to adjust these components during the year due to special economic circumstances. In the view of the Supervisory Board, this option is appropriate in rare exceptional cases, as exceptional economic circumstances are always also made transparent in good time on the capital market and taken into account in the company forecast.

Contrary to Section G.10, under the remuneration system, variable remuneration amounts granted shall not be predominantly invested in shares of the Company or granted on a share basis, taking the respective tax burden into account. In addition, there is to be no uniform regulation that stipulates that the Management Board member may not access the long-term variable amounts granted until after four years. The Supervisory Board does not consider a share-based remuneration to be an improvement for a long-term incentive compared with the measurement of the sustainable value-added created in the Management Board objectives based on Economic Value Added (EVA®) and Free Cash Flow (FCF).

The LTI and the selection of KPIs create and thus ensure a long-term incentive effect. In the Supervisory Board’s view, the current system has proved successful in the past. The long-term variable remuneration is currently fixed for 3 years. This period is considered sufficient in terms of longevity and sustainability, and is in line with the Company’s medium-term planning horizon in budget planning.

Section G.12 recommends, in the event of the termination of a Management Board contract, that the outstanding variable remuneration components attributable to the time remaining until the end of the contract be paid out in accordance with the originally agreed objectives and comparative parameters and in accordance with the due dates or holding periods specified in the contract. G.13 stipulates that payments in the event of premature termination should not exceed a value of two years' remuneration in the sense of a severance payment cap. Contrary to Section G.12 /G.13 and in the interest of simplifying the processing of early contract terminations, the inclusion of an average variable remuneration component should, in principle, be compensated with the severance payment under the remuneration system.

The Carl Zeiss Meditec Group practices responsible corporate governance geared to creating sustained value-added. It does this based on the strong conviction that sustainable economic success is inextricably linked to compliance with laws and legislation and internal policies. The close and efficient cooperation between the Management Board and Supervisory Board, open corporate communication and proper accounting also play an important role.

As a company of the ZEISS Group, Carl Zeiss Meditec AG is subject to the provisions of globally applicable Code of Conduct adopted back in 2007, in its current version dated October 2023, which stipulates and explains the basic rules for various areas of business activity. You will find this information on our website at www.zeiss.de/meditec-ag/investor-relations/corporate-governance.html.

Carl Zeiss Meditec AG therefore strives not only to consistently achieve its best performance in technological terms but is also committed to adhering to the highest of standards in terms of abiding by the "rules" of good and fair conduct in competition and in dealing with employees and customers.

The Code of Conduct sets out the fundamental ethical principles of good conduct and values which govern the actions of both management and employees in their day-to-day work at the Company. The confidence of business partners, customers, shareholders, authorities and the general public, as well as our competitors in responsible, law-abiding conduct and moral integrity from all of the Group's employees is of the utmost importance for the image and economic success of the Carl Zeiss Meditec Group and the appeal of the ZEISS brand.

As a company of the ZEISS Group, Carl Zeiss Meditec AG has a whistleblower system in place. A compliance case management process has been set up throughout the Group in order to be able to report compliance violations in a protected manner. In principle, reports should first be addressed to the manager, HR department or the responsible compliance officer. Alternatively, violations can be reported anonymously via an online portal called “Integrity Line”. Managers, HR managers and the compliance team take every report seriously. Therefore, a systematic approach ensures that every report is processed.

Pursuant to Art. 19 MAR, members of the Management Board or Supervisory Board of Carl Zeiss Meditec AG must inform the Company and the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) about the purchase and sale of shares of Carl Zeiss Meditec AG.

At its meeting on 14 January 2013 the Supervisory Board passed the following resolution: In order to ensure a uniform position concerning shares of the Company held by members of the Supervisory and Management Board, to enable them to decide independently on personal investment matters and at the same time to prevent possible speculative action in the capital market, the Supervisory Board, in agreement with the Management Board, recommends that Supervisory and Management Board members and related individuals (persons with a close link as per Section 19 (1) Sentence 3 No. 26 MMVO , formerly Section 15a (3) WPHG) do not build up holdings of shares in the Company in the future. Concerning the existing share holdings of members of the Supervisory and Management Board and related individuals it is recommended that they sell these holdings in the medium term subject to the insider trading rules.

At the current time, no Company shares are held by members of the Management Board of Carl Zeiss Meditec AG. Shareholdings by members of the Supervisory Board amount to less than 0.1% of the outstanding share capital.

A key instrument of corporate governance at Carl Zeiss Meditec AG is its risk management system. This is a systematic process which enables the management uses to identify, evaluate and control risks and opportunities early on. The management uses the risk management system to identify unfavorable developments and their effects at an early stage and makes them transparent. This enables appropriate countermeasures to be introduced in a targeted and timely manner and also allows opportunities to be exploited efficiently at the same time. The risk and opportunity management system is continuously improved and developed. Further information on the subject of risk and opportunity management can be found in Annual Report of Carl Zeiss Meditec AG on page 47 et seqq.

At the end of the Annual General Meeting on 22 March 2023, the Supervisory Board of Carl Zeiss Meditec AG has been composed, pursuant to the 1976 Co-determination Act and Art. 11 (1) of the Company's Articles of Association, of six members to be elected by the shareholders and six members to be elected by the employees. The shareholder representatives on the Supervisory Board objected to the overall fulfillment prior to the new election by resolution dated 8 September 2022, meaning that the minimum proportion of 30% for women and 30% for men must be fulfilled separately by the shareholder representatives and the employee representatives. At the present time, the minimum proportion of two female and two male members on the shareholder and employee side respectively has been met.

An age limit of 65 years has been defined for the acceptance of Supervisory Board mandates at Carl Zeiss Meditec AG in the Rules of Procedure of the Supervisory Board.

The Supervisory Board has a General and Personnel Committee, an Audit Committee, a Mediation Committee and a Nominating Committee.

Pursuant to Section C.6 of the German Corporate Governance Code 2022 (DCGK 2022), there should be a certain number of independent members on the shareholder side that shareholders deem appropriate; the ownership structure should be taken into account. In its own estimation, the Supervisory Board has an adequate number of independent members with Isabel De Paoli, Peter Kameritsch and Tania von der Goltz, also taking the ownership structure of Carl Zeiss Meditec AG into consideration, in which Carl Zeiss AG directly and indirectly holds a share of around 59.1%, who have no business or personal relationship with Carl Zeiss Meditec AG or the Management Board or Carl Zeiss AG as controlling shareholder.

Pursuant to C.7 DCGK 2022 more than half of the shareholder representatives are independent from the Company and from the Management Board. Members of the Supervisory Board who have no personal or business relationship with the Company or the Management Board that could give rise to a material and not merely temporary conflict of interest are deemed to be independent. When assessing independence, particular consideration shall be given to whether the Supervisory Board member himself or a close family member of him

• has been a member of the Company's Management Board for the two years preceding the appointment
• currently or in the year up to his appointment, directly or as a shareholder or in a responsible function of a company outside the Group, has or has had a significant business relationship with the Company or a company dependent on it,
• is a close family member of a member of the Management Board, or
• has been a member of the Supervisory Board for more than twelve years.
  
  

Taking into account these indicators set out in C.7 DCGK 2022, all members of the Supervisory Board are independent on the shareholder side in the sense of C.7 DCGK. Although Dr. Karl Lamprecht is a member of the Management Board of the controlling shareholder and Stefan Müller is also a member of the Management Board of the controlling shareholder since 1 Jan 2024, they are considered independent within the meaning of C.7 GCGC 2022. This also applies to Torsten Reitze, who holds the position of Managing Director at an affiliated company of Carl Zeiss Meditec AG.

Pursuant to C.10 DCGK 2022, the Chairman of the Supervisory Board, the Chairman of the Audit Committee and the Chairman of the committee responsible for the remuneration of the Management Board should also be independent from the Company and the Management Board. In addition, the Chairman of the Audit Committee should be independent from the controlling shareholder. The Audit Committee is chaired by Peter Kameritsch, who is independent of Carl Zeiss AG. The Chairman of the whole Supervisory Board as well as the General and Personnel Committee, and therefore Chairman of the committee responsible for the remuneration of the Management Board, is Dr. Karl Lamprecht.

There were no conflicts of interest on the Supervisory Board in fiscal year 2023/24.

The Supervisory Board is also responsible for long-term succession planning for the Management Board. The Chairman of the Supervisory Board holds regular meetings with the Chairman of the Management Board to discuss this. The subject is also discussed by the General and Personnel Committee of the Supervisory Board. They deliberate on the contract terms and renewal options for current members of the Management Board and advise on potential candidates for succession. When filling positions, both external and internal candidates are considered. Particular attention is paid to filling the positions with internal candidates who have the necessary qualifications and experience. Succession planning extends internally to potential candidates throughout the ZEISS Group.

The basic eligibility criteria for selecting candidates for a Management Board position are accordingly based on the knowledge required to fulfill the tasks for the area of responsibility to be taken over, professional qualifications, personality, integrity, management qualities and previous achievements and knowledge about the Company.

The Supervisory Board decides which person should be appointed to a specific position on the Management Board in the interests of the Company and taking all circumstances of the individual case into consideration. In summary, the Supervisory Board considers in particular the following aspects:

• The members of the Management Board should have many years of management experience, also in the international field
• The Management Board as a whole should have many years of experience in the field of medical technology
• The Management Board as a whole should have many years of experience within Carl Zeiss Meditec and the Zeiss Group
• The Supervisory Board has stipulated an age limit of 65 years for the members of the Management Board in its Rules of Procedure
  
  

The Supervisory Board regularly assesses the effectiveness of its committees and of the Supervisory Board as a whole. During the past fiscal year the Supervisory Board conducted a self-assessment, to evaluate the efficiency of its activities. This took the form of a questionnaire, in which the members of the Supervisory Board gave their appraisal of the effectiveness of the work of the Supervisory Board and its committees and suggested possibilities for improvement.

The questionnaire contains questions about the following topics, among others: Quality of meeting preparation, running of Supervisory Board meetings, communication between the members of the Supervisory Board, input from the committees, number of committees and frequency of their meetings.

After evaluating the questionnaires, the results and the possibilities for improvement were discussed at the next regular plenary session. Proposed recommendations for the work of the Supervisory Board were discussed and an agreement reached on their implementation.

Further information on the cooperation of the Management Board and Supervisory Board, the composition and method of working of the committees can be found in the Report of the Supervisory Board and the notes accompanying the consolidated financial statements in the 2023/24 Annual Report.