Fresenius Medical Care AG 6-K, filed Apr 10, 2025
Fresenius Medical Care AG (FMS)
About this 6-K
Fresenius Medical Care AG filed this 6-K on April 10, 2025.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of April 2025
Commission file number: 001-32749
FRESENIUS MEDICAL CARE AG
(Translation of registrant's name into English)
Else-Kröner-Strasse 1
61346 Bad Homburg
Germany
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form 40-F ¨
EXHIBITS(1)
The following exhibits are being furnished with this Report:
1 Exhibits 99.1 through 99.4 furnished with this report are English convenience translations of the respective binding German versions of such documents and have also been posted on the Company’s website at www.freseniusmedicalcare.com/en/investors/agm.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
DATE: April 10, 2025
| Fresenius Medical Care AG | ||
| By: | /s/ Helen Giza | |
| Name: | Helen Giza | |
| Title: | Chief Executive Officer and Chair of the Management Board | |
| By: | /s/ Martin Fischer | |
| Name: | Martin Fischer | |
| Title: | Chief Financial Officer and member of the Management Board |
Exhibit 99.1
Convenience Translation
Fresenius Medical Care AG
Hof (Saale)
ISIN: DE0005785802 // WKN: 578580
ISIN: US3580291066 // CUSIP: 358029106
Invitation to the Annual General Meeting
We hereby invite our shareholders to the Annual General Meeting of Fresenius Medical Care AG (hereinafter also “Company”). The General Meeting will be held as an in-person meeting on Thursday, 22 May 2025 at 10:00 hours Central European Summer Time (CEST) at the Congress Center Messe Frankfurt, Ludwig-Erhard-Anlage 1, 60327 Frankfurt am Main, Germany.
| I. | Agenda |
| 1. | Presentation of the adopted annual financial statements and the approved consolidated financial statements, the management reports for Fresenius Medical Care AG and the group, the explanatory report by the Management Board on the information pursuant to sec. 289a, 315a of the German Commercial Code (Handelsgesetzbuch) and the report by the Supervisory Board of Fresenius Medical Care AG for fiscal year 2024 |
The aforementioned documents are available from the time the Annual General Meeting is convened on the Company’s website at:
www.freseniusmedicalcare.com/en/agm
The aforementioned documents will also be available for inspection by shareholders at the Annual General Meeting and will be explained in more detail there.
The Supervisory Board has approved the annual financial statements and the consolidated financial statements prepared by the Management Board. Therefore, the annual financial statements are adopted in accordance with sec. 172 German Stock Corporation Act (Aktiengesetz – “AktG”). In accordance with statutory provisions, there will therefore be no resolution in respect of this agenda item.
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| 2. | Resolution on the allocation of distributable profit |
The Management Board and the Supervisory Board propose to allocate the distributable profit of Fresenius Medical Care AG for fiscal year 2024 as reported in the annual financial statements as follows:
| Payment of a dividend of EUR 1.44 for each of the 293,413,449 shares entitled to dividend | EUR | 422,515,366.56 | ||
| Profit carried forward to new account | EUR | 1,799,956,108.70 | ||
| Distributable profit | EUR | 2,222,471,475.26 |
If the number of no-par value shares entitled to dividend for fiscal year 2024 changes prior to the Annual General Meeting, the Annual General Meeting will be presented with a proposal that will be adjusted accordingly with an unchanged dividend of EUR 1.44 for each no-par value share entitled to dividend and adjusted amounts for the dividend sum and the profit carried forward to new account.
Payment of the dividend is due on 27 May 2025.
| 3. | Resolution on the approval of the actions of the members of the Management Board of Fresenius Medical Care AG for fiscal year 2024 |
The Management Board and the Supervisory Board propose to approve the actions of the members of the Management Board of Fresenius Medical Care AG in fiscal year 2024.
| 4. | Resolution on the approval of the actions of the members of the Supervisory Board of Fresenius Medical Care AG for fiscal year 2024 |
The Management Board and the Supervisory Board propose to approve the actions of the members of the Supervisory Board of Fresenius Medical Care AG in fiscal year 2024.
| 5. | Election of the auditor and group auditor for fiscal year 2025, the auditor of the sustainability reporting for fiscal year 2025 as well as the auditor for the potential review of the half-year financial report for fiscal year 2025 and other interim financial information |
The Supervisory Board – based on the recommendation of its Audit Committee (Prüfungsausschuss) – proposes to resolve as follows:
| 5.1 | PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, is elected |
| – | as auditor and group auditor for fiscal year 2025, |
| – | as auditor for the potential review of the half-year financial report and other interim financial information for fiscal year 2025 prepared after the Annual General Meeting 2025, and |
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| – | as auditor for the potential review of interim financial information for fiscal year 2026 prepared prior to the Annual General Meeting 2026. |
The Audit Committee stated that its recommendation is free from undue influence by a third party and that no clause restricting the choice in the meaning of Article 16 (6) of the Regulation (EU) No. 537/2014 of the European Parliament and the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC (EU Statutory Audit Regulation) has been imposed upon it.
| 5.2 | PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, is elected as auditor of the sustainability reporting for fiscal year 2025. |
The auditor of the sustainability reporting is elected as a matter of precaution in case the German legislator, in implementing Art. 37 of the Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 (EU Statutory Audit Directive) in the version of the Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 on corporate sustainability reporting (EU Corporate Sustainability Reporting Directive), should require an explicit election of this auditor by the General Meeting, i.e., the German implementation law should not provide for the audit of the sustainability reporting by the (statutory) auditor anyway.
| 6. | Resolution on the approval of the compensation report for fiscal year 2024 |
The Management Board and the Supervisory Board of listed companies must annually prepare a compensation report in accordance with sec. 162 AktG and submit the compensation report to the General Meeting for approval pursuant to sec. 120a (4) AktG.
The compensation report of the Company for fiscal year 2024 was reviewed by the auditor pursuant to sec. 162 (3) AktG to determine whether the statutorily required disclosures pursuant to sec. 162 (1) and (2) AktG were made. In addition to the statutory requirements, the content of the compensation report was also reviewed by the auditor on a voluntary basis. A corresponding auditor’s report on the compensation report is attached to the compensation report.
The compensation report for fiscal year 2024 including the auditor’s report is available on the Company’s website at:
www.freseniusmedicalcare.com/en/agm
and will continue to be available there during the Annual General Meeting.
The Management Board and the Supervisory Board propose to approve the compensation report for fiscal year 2024, prepared and audited in accordance with sec. 162 AktG.
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| 7. | Resolution on the cancellation of the existing authorized capitals, on the creation of a new authorized capital including the possibility of the exclusion of subscription rights as well as on corresponding amendments to Article 4 (3) and (4) of the Articles of Association of the Company |
The Management Board is authorized pursuant to Article 4 (3) of the Articles of Association to increase the share capital of the Company with the approval of the Supervisory Board by up to EUR 35,000,000.00 by issuing new bearer shares with no-par value for cash on one or more occasions (Authorized Capital 2020/I). Furthermore, the Management Board is authorized pursuant to Article 4 (4) of the Articles of Association to increase the share capital of the Company with the approval of the Supervisory Board by up to EUR 25,000,000.00 by issuing new bearer shares with no-par value for cash and/or contributions in kind on one or more occasions (Authorized Capital 2020/II). These authorizations expire on 26 August 2025, respectively. They have not been exercised.
To enable the Company to increase the share capital in a flexible manner and without a further resolution of the General Meeting also after the existing authorized capitals have expired, the creation of one uniform new authorized capital of up to EUR 60,000,000.00 shall be proposed hereinafter, which will entirely replace the previous Authorized Capital 2020/I and the previous Authorized Capital 2020/II. The creation of only one new authorized capital shall simplify the current capital structure of the Company and take into account the practice of a large number of large, listed companies, which for their part have only created one uniform authorized capital. The proposed volume of this new Authorized Capital 2025 corresponds to the sum of the volumes of the previous authorized capitals and to about 20% of the share capital of the Company existing at the time of this resolution. The term of the authorization shall again be five years. The possibility of excluding shareholders’ subscription rights shall be limited to shares amounting to up to 10% of the Company’s share capital.
The Management Board and the Supervisory Board propose to resolve as follows:
| a) | The Authorized Capital 2020/I in Article 4 (3) of the Articles of Association shall be cancelled by annulling Articles 4 (3) of the Articles of Association. |
| b) | Article 4 (3) of the Articles of Association is revised as follows: |
“The Management Board is authorized until 21 May 2030 to increase the share capital of the Company with the approval of the Supervisory Board by up to EUR 60,000,000.00 (in words: sixty million euros) for cash and/or contributions in kind by issuing new bearer shares with no-par value on one or more occasions (Authorized Capital 2025). The number of shares must be increased in the same proportion as the share capital. The new shares shall participate in the profits from the start of the fiscal year in which they are issued. In deviation therefrom and to the extent legally permissible, the Management Board may stipulate with the approval of the Supervisory Board that the new shares will participate in profits as of the beginning of a fiscal year that has already ended and for which no resolution on the allocation of distributable profit has been passed by the General Meeting at the time of their issue. In general, the shareholders have a subscription right. The new shares can also be obtained by a credit institution, a securities institution or a company operating in accordance with sec. 53 (1) sentence 1 of the German Banking Act (Kreditwesengesetz – KWG) or sec. 53b (1) sentence 1 or (7) KWG (financial institution) or a consortium of such credit institutions, securities institutions and/or financial institutions retained by the Management Board with the obligation to offer the shares to the Company’s shareholders for subscription.
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However, the Management Board is authorized with the approval of the Supervisory Board to exclude the shareholders’ subscription rights in particular in the following cases:
| – | to eliminate fractional amounts from the subscription right; |
| – | to grant subscription rights, as a compensation for dilutive effects, to the holders or creditors of option or conversion rights to shares of the Company or those liable under the corresponding option or conversion obligations arising from bonds issued or guaranteed by the Company or its group companies to the extent to which they would be entitled after exercising these option or conversion rights or fulfilment of these option or conversion obligations; |
| – | in the case of one or more capital increases for contributions in kind for the purpose of acquiring companies, parts of companies, interests in companies or other assets; or |
| – | in the case of one or more capital increases for cash if the issue price for the shares does not significantly fall below the stock exchange price of the shares already listed and the proportionate amount of the share capital of the Company attributable to the shares issued with exclusion of subscription rights exceeds 10% of the share capital neither at the time of this authorization coming into effect nor at the time of the exercise of this authorization. This limit shall include the proportionate amount of share capital attributable to new shares or treasury shares previously acquired by the Company which are issued or sold during the period of validity of this authorization with exclusion of subscription rights in direct, analogous or corresponding application of sec. 186 (3) sentence 4 AktG as well as the proportionate amount of the share capital attributable to shares issued or to be issued to satisfy option or conversion rights or to fulfil option or conversion obligations from bonds, if the bonds are issued during the period of validity of this authorization with exclusion of subscription rights in analogous application of sec. 186 (3) sentence 4 AktG. |
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The Management Board may only exercise the aforementioned authorization to exclude subscription rights to the extent that the proportional amount of the total shares issued subject to an exclusion of subscription rights exceeds 10% of the share capital neither at the time of this authorization coming into effect nor at the time of the exercise of this authorization. In case that during the period of validity of the Authorized Capital 2025 until its utilization, other authorizations on the issuance or on the sale of shares of the Company or the issuance of rights which authorize or bind to the subscription of shares of the Company are exercised and the subscription rights are excluded, such subscription rights will be taken into account with regard to the aforementioned limit.
The Management Board is further authorized to determine with the approval of the Supervisory Board the further details for the implementation of capital increases from the Authorized Capital 2025. The Supervisory Board is authorized to amend the wording of the corresponding provisions of the Articles of Association after a total or partial implementation of the increase of the share capital from the Authorized Capital 2025 in accordance with the volume of such capital increase and, if the Authorized Capital 2025 has not been used or not fully used by 21 May 2030, after the expiry of the authorization.”
| c) | The Authorized Capital 2020/II in Article 4 (4) of the Articles of Association shall be cancelled by annulling Articles 4 (4) of the Articles of Association. |
Pursuant to sec. 203 (2) sentence 2 AktG in conjunction with sec. 186 (4) sentence 2 AktG, the Management Board has submitted a written report outlining the reasons for which it should be authorized to exclude subscription rights in accordance with Section b) above. The content of the report is set out in Section II.1 below. The report will also be available from the time of the convening of the Annual General Meeting on the Company’s website under
www.freseniusmedicalcare.com/en/agm/
and will also be available during the General Meeting.
| 8. | Resolution on the granting of an authorization to issue convertible bonds and/or bonds with warrants with the option of excluding subscription rights, on the creation of a Conditional Capital 2025 and on the corresponding amendment to the Articles of Association of the Company |
The Company currently does not have an authorization to issue option and/or convertible bonds. To provide the Company, if required, with future flexibility in terms of additional financing options, it is intended to create an authorization to issue option and/or convertible bonds with a corresponding conditional capital. Such authorization aligns with the widespread practice of large listed companies. The authorization is to be granted for a total nominal amount of up to EUR 2,000,000,000.00. The term of the authorization shall be five years. The conditional capital shall be limited to up to 10% of the share capital of the Company existing at the time this resolution is voted on. The possibility to exclude the shareholders’ subscription rights shall also be limited to shares amounting to up to 10% of the share capital of the Company.
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The Management Board and the Supervisory Board propose to resolve as follows:
| a) | The Management Board is authorized with the approval of the Supervisory Board to issue on one or more occasions, and also concurrently denominated in various tranches, bearer option bonds and/or convertible bonds or any combination of such instruments (“Bonds”) in the total nominal value of up to EUR 2,000,000,000.00 (in words: two billion euros), and to grant the bearers of Bonds option or conversion rights for a total of up to 29.341.344 bearer shares with no-par value of the Company with a proportional amount of the share capital of up to EUR 29.341,344.00 (in words: twenty-nine million three hundred and forty-one thousand three hundred and forty-four euros) as set forth in detail under the relevant terms and conditions of the Bonds (“Bond Conditions”). The respective Bond Conditions may also provide for mandatory conversion at the end of the term or at other times, including the requirement to exercise the option or conversion rights. The Bonds are to be issued for cash or non-cash consideration. |
The Bonds may also be issued by domestic or foreign companies in which Fresenius Medical Care AG directly or indirectly holds the majority of the shares (“Group Companies”). If the Bonds are issued by a Group Company, the Management Board is authorized, with the approval of the Supervisory Board, to assume the guarantee on behalf of the Company for the Bonds and to grant option rights to the holders of bond warrants, or conversion rights to the holders of convertible bonds, to shares in the Company, as well as to make the necessary declarations and to take the necessary actions required to ensure the success of the issuance. The Bond Conditions, also if Bonds are issued by Group Companies, may stipulate a requirement to exercise the option or conversion at the end of the term, or at an earlier date.
The Bonds may be issued in euros or in the official currency of an OECD member state (capped at the equivalent value in euros).
If option bonds are issued, one or several warrants shall be attached to each option bond that, in accordance with the Bond Conditions to be stipulated by the Management Board, entitle the holder to subscribe for shares in the Company. The Bond Conditions may stipulate that the option price determined in accordance with this authorization may also be settled by transferring partial option bonds and, if applicable, by additional cash payment. The proportion of the share capital represented by the shares issued for each partial option bond may be no higher than the nominal amount of this partial option bond. To the extent fractional shares are created, it may be stipulated that these fractions can be added up to form whole shares in accordance with the Bond Conditions, if necessary, by making an additional payment.
If convertible bonds are issued, the holders of the Bonds shall be granted the right or, if conversion is to be mandatory, they shall undertake to exchange their convertible bonds for shares in the Company in accordance with the Bond Conditions. The conversion ratio shall be calculated by dividing the nominal value or, if the issue price is below the nominal value, the issue price of a partial bond by the conversion price set for a share in the Company. The conversion ratio may in all cases be rounded up or down to a whole number. In addition, it can be stipulated that fractional amounts can be amalgamated and/or settled in cash; furthermore, provision may be made for an additional cash payment.
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The Bond Conditions may stipulate that the conversion ratio shall be variable and the option conversion price determined on the basis of future stock exchange prices within a certain bandwidth.
Without prejudice to sec. 9 (1) and sec. 199 AktG, the respective option or conversion price must be at least 80% of the volume-weighted, average stock exchange price of the Company’s shares in the XETRA trading system of the Frankfurt Stock Exchange (or a comparable successor system) (“Minimum Price”). The basis is the average closing price on the ten stock exchange trading days prior to the final decision of the Management Board on the issuance of the Bonds or, following a public solicitation to submit subscription offers, on the Company’s declaration of acceptance of such offers. Alternatively, if the shareholders’ subscription rights have not been excluded, the price on the stock exchange trading days during the subscription period may be used as a basis (excepting those days of the subscription period that are necessary to announce the option or conversion price in due time pursuant to sec. 186 (2) AktG). In the case of Bonds with an option or conversion obligation, the option or conversion price or reference price of the Company’s share used to determine the option or conversion price may at least either (i) equal the Minimum Price set out above or (ii) correspond to the volume-weighted average price of the Company’s share on at least the three trading days in the XETRA trading system of the Frankfurt Stock Exchange (or a comparable successor system) immediately preceding the determination of the option or conversion price in accordance with the Bond Conditions. The latter average price may also be used if it and the relevant option or conversion price derived therefrom are below the Minimum Price (80%) set out above.
Without prejudice to sec. 9 (1) AktG and sec. 199 AktG, the option or conversion price may be adjusted to preserve the value of the rights on the basis of an antidilution clause, as provided for in the Bond Conditions, if the Company increases the share capital before the end of the option period or conversion period, granting subscription rights to its shareholders, or, if the Company issues or guarantees further Bonds and does not grant subscription rights to the holders of existing option rights or conversion rights or the corresponding obligations. The Bond Conditions may also provide for an adjustment to the option or conversion price to preserve the value of the rights in the case of other measures taken by the Company that may lead to a dilution of the value of the option rights or conversion rights or the corresponding obligations.
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The Bond Conditions may entitle the Company to make a cash payment instead of issuing shares when an option or conversion right is exercised. The Bond Conditions may furthermore entitle the Company to grant bondholders shares in the Company in full or partial settlement of the cash amount that has become due. The subscription or conversion rights of bondholders or claims arising from a mandatory conversion or mandatory option exercise may also be settled with treasury shares and newly issued shares from the Company’s authorized capital and/or from conditional capital and/or authorized capital to be created by a resolution passed at a later date and/or from an ordinary capital increase.
The Management Board is authorized to set the method for calculating the specific option or conversion price as well as the further details governing the issue and the features of the Bonds as well as the Bond Conditions, or to determine these in agreement with the officers and directors of the Group Companies issuing the Bonds, in particular, to set the interest rate, the issue price, the time to maturity and the denomination, the subscription or conversion ratio, to establish an obligation to exercise the option or conversion rights, to require an additional cash payment, to pay compensation for or amalgamate fractional amounts, to make a cash payment in lieu of delivering shares, to deliver existing shares in lieu of issuing new shares as well as to determine the option and the conversion period.
| b) | The shareholders in general shall be granted a right to subscribe for the Bonds. The subscription rights may also be granted in such a way that the Bonds are underwritten by a credit or securities institution or a company (financial institution) operating in accordance with sec. 53 (1) sentence 1 or sec. 53b (1) sentence 1 or (7) KWG or a consortium consisting of such credit, securities or financial institutions with the obligation to offer the Bonds to the shareholders for subscription. To the extent that the Bonds are issued by a Group Company, the Company in general must ensure that shareholders are granted their statutory subscription rights. |
The Management Board, however, is authorized, with the approval of the Supervisory Board, to exclude the shareholders’ subscription rights in the following cases:
| – | to eliminate fractional amounts from subscription rights; |
| – | to grant holders or creditors of option or conversion rights to shares of the Company or debtors of option or conversion obligations under Bonds issued or guaranteed by the Company or any of its Group Companies subscription rights as compensation against effects of dilution to the extent to which they would be entitled to such rights upon exercising such option or conversion rights or fulfilling such option or conversion obligations; |
| – | if the Bonds are issued against contributions in kind for the purpose of acquiring companies, parts of companies, interests in companies or other assets; or |
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| – | insofar as the issue price of a bond is not significantly lower than the theoretical market value calculated according to recognized actuarial methods. The sum of these shares issued subject to an exclusion of subscription rights must not exceed 10% of the respective share capital, neither at the time of resolution on such authorization nor at the time of its utilization. If, during the term of this authorization and until its utilization, other authorizations for the issuance or the disposal of shares of the Company, or the issuance of rights that authorize or bind to the purchase of shares of the Company are used and thereby subscription rights are excluded in direct, analogous or corresponding application of sec. 186 (3) sentence 4 AktG, the same shall be taken into account with regard to the aforementioned 10% limit. |
The Management Board may only exercise the aforementioned authorization to exclude subscription rights to the extent that the proportional amount of all shares issued subject to an exclusion of subscription rights does not exceed 10% of the share capital, neither at the time of resolution on such authorization nor at the time of its utilization. If, during the term of this authorization to issue option bonds and/or convertible bonds or combinations of such instruments until the utilization thereof, other authorizations for the issuance or sale of shares of the Company, or the issuance of rights that authorize or bind to the purchase of shares in the Company are used and subscription rights are excluded, this will be taken into account with regard to the 10% limit.
| c) | In order to grant shares to the holders of option and/or convertible bonds which are issued for cash consideration in accordance with Section a) on the basis of the aforementioned authorization, Article 4 (4) of the Articles of Association following the annulling of the previous Article 4 (4) of the Articles of Association (see Section I.7. c) above) is revised as follows: |
“The share capital of the Company is conditionally increased by up to EUR 29,341,344.00 (in words: twenty-nine million three hundred and forty-one thousand three hundred and forty-four euros) through issuing up to 29,341,344 bearer shares with no-par value (Conditional Capital 2025). The conditional capital increase will only be implemented to the extent that the holders of convertible bonds issued for cash or of warrants from option bonds issued for cash by Fresenius Medical Care AG or a group company until 21 May 2030, on the basis of the authorization granted to the Management Board by the Annual General Meeting of 22 May 2025, exercise their option or conversion rights or fulfill a possible conversion obligation and as long as no other forms of settlement are used. The new shares shall participate in the profits from the start of the fiscal year in which they are issued. In deviation therefrom and to the extent legally permissible, the Management Board may stipulate with the approval of the Supervisory Board that the new shares will participate in profits as of the beginning of a fiscal year that has already ended and for which no resolution on the allocation of distributable profit has been passed by the General Meeting at the time of their issue.
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The Management Board is authorized to determine the further details regarding the implementation of the conditional capital increase. The Supervisory Board is authorized to amend the version of Article 4 (4) of the Articles of Association in accordance with the utilization of the Conditional Capital 2025 from time to time. The same applies if the authorization to issue option or convertible bonds is not exercised by the end of the authorization period and if the Conditional Capital 2025 is not utilized by the expiry of all option and conversion periods.”
If, in the opinion of the Management Board, the registration of the deletion of the previous Article 4 (4) of the Articles of Association proposed under Section I.7. c) cannot be effected within a reasonable period of time after the 2025 Annual General Meeting, the Management Board is authorized to also apply for the aforementioned provision of the Articles of Association for the revision of Article 4 (4) of the Articles of Association to be registered with the commercial register as Article 4 (5) of the Articles of Association.
Pursuant to sec. 221 (4) sentence 2 AktG in conjunction with sec. 186 (4) sentence 2 AktG, the Management Board has submitted a written report outlining the reasons for which it should be authorized to exclude subscription rights in accordance with Section b) above. The content of the report is set out in Section II.2 below. The report will also be available from the time of the convening of the Annual General Meeting on the Company’s website under
www.freseniusmedicalcare.com/en/agm/
and will also be available during the General Meeting.
| 9. | Resolution on a new authorization of the Management Board to provide for the holding of a virtual General Meeting and on the corresponding amendment to Article 15 (3) of the Articles of Association of the Company |
Pursuant to Article 15 (3) of the Articles of Association, the Management Board is authorized to provide for the holding of the General Meeting as a virtual General Meeting (i.e. without the shareholders or their proxies being physically present at the place of the General Meeting). This authorization was resolved by the Annual General Meeting on 16 May 2023 and registered with the Company’s commercial register on 14 July 2023. It applies to the holding of virtual General Meetings within a period of two years after its registration with the commercial register and therefore expires on 14 July 2025.
The Management Board did not make use of the authorization pursuant to Article 15 (3) of the Articles of Association. The Company has held all General Meetings which were convened after the termination of the infection control measures in Germany to combat the COVID-19 pandemic in the form of General Meetings held in presence. However, the Management Board and the Supervisory Board are of the opinion that it makes sense to continue to have the flexibility to hold the General Meeting in the form of a virtual meeting in the future. For this reason, the Management Board and the Supervisory Board propose to renew the authorization to hold virtual General Meetings. With the proposed new authorization, the legally possible authorization period of five years is again not to be fully utilized but limited to two years as before.
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The General Meeting in presence and the virtual General Meeting are legally equivalent. In particular, shareholders do not have fewer rights in virtual General Meetings than in General Meetings held in presence. The format of the virtual General Meeting can be useful for the Company and its shareholders. In particular, it provides for a legally secure and efficient way to hold a General Meeting with the participation of many international shareholders.
For future General Meetings, the Management Board should also be able to decide separately and taking into account the circumstances of each individual case whether the General Meeting – in line with the Company’s standard practice – should be held in presence or – in exceptional cases due to special circumstances – as a virtual General Meeting. The Management Board shall continue to make the corresponding decision, taking into account the interests of the Company and its shareholders and, in particular, the agenda items, aspects of health protection for those involved, effort and costs as well as sustainability considerations. Examples of special circumstances that could make it necessary to convene the General Meeting in the virtual format are pandemics, natural disasters, or political crises that could affect the holding of the General Meeting as an in-person meeting or the presence of members of the Management Board or the Supervisory Board.
The shareholder rights will be fully preserved in accordance with legal requirements, regardless of the format of the General Meeting. Furthermore, the provision in the Articles of Association proposed under this agenda item shall stipulate that the decision to hold a virtual General Meeting requires the approval of the Supervisory Board. This is intended to further ensure that the decision is made in the best interests of the Company and its shareholders.
In order to ensure that the new authorization of the Management Board to hold a virtual General Meeting follows the expiration of the previous authorization in terms of timing immediately, the Management Board shall be instructed to file the amended provision of the Articles of Association with the commercial register in such a way that it is not registered before 15 July 2025.
The Management Board and the Supervisory Board propose to resolve as follows:
Article 15 (3) of the Articles of Association of the Company is revised as follows:
“The Management Board is authorized, with the approval of the Supervisory Board, to provide for the General Meeting to be held without the physical presence of the shareholders or their proxies at the place of the General Meeting (virtual General Meeting). The authorization shall apply to the holding of virtual General Meetings for a period of two years after registration of this provision of the Articles of Association with the commercial register.”
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Otherwise, Article 15 of the Articles of Association remains unchanged.
The Management Board is instructed to file the amendment of the Articles of Association with the commercial register in such a way that it is not registered before 15 July 2025.
| 10. | Resolution on an amendment to Article 10 (6) of the Articles of Association of the Company (language version of the minutes of the Supervisory Board) |
Article 10 (6) sentence 1 of the Articles of Association stipulates that minutes of the meetings of the Supervisory Board shall be prepared in the English and German language. This provision goes beyond the statutory requirements, according to which the corresponding minutes are only to be prepared in one language. In order to simplify dealing with the minutes of the meetings of the Supervisory Board and to avoid ambiguities regarding the legally binding language version of the minutes, the requirement for two language versions should be waived in future and the provision in the Articles of Association should be aligned with the legal requirements in this regard.
The Management Board and the Supervisory Board propose to resolve as follows:
Article 10 (6) of the Articles of Association of the Company is revised as follows:
“Minutes of the meetings of the Supervisory Board shall be prepared and signed by the chairperson of the meeting. Any minutes of resolutions adopted outside of meetings shall be signed by the chairperson of the Supervisory Board.”
Otherwise, Article 10 of the Articles of Association remains unchanged.
| II. | Annexes and further information on the agenda items |
| 1. | Written report by the Management Board regarding item 7 of the agenda |
In accordance with sec. 203 (2) sentence 2 and 186 (4) sentence 2 AktG, the Management Board submits a report on the reasons for its authorization to exclude subscription rights in the course of utilizing the authorized capital proposed for resolution under agenda item 7.
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The Management Board is authorized pursuant to Articles 4 (3) and 4 (4) of the Articles of Association to increase the share capital of the Company with the approval of the Supervisory Board by up to EUR 35,000,000.00 by issuing new bearer shares with no-par value for cash (Authorized Capital 2020/I) and by up to EUR 25,000,000.00 by issuing new bearer shares with no-par value for cash and/or contributions in kind (Authorized Capital 2020/II). These authorizations expire on 26 August 2025, respectively. They have not been exercised. To ensure that the Company has the opportunity in future to satisfy any needs for financing that may arise in connection with the implementation of strategic decisions with the approval of the Supervisory Board on short notice and in a sufficiently flexible manner, i.e. without the time-consuming adoption of a new resolution at a General Meeting, a new authorized capital of up to EUR 60,000,000.00 is proposed under agenda item 7. The proposed volume of this new Authorized Capital 2025 corresponds to the sum of the previous authorized capitals and to about 20% of the share capital of the Company existing at the time of the resolution on the new Authorized Capital 2025. The creation of only one new authorized capital shall simplify the current capital structure of the Company and take into account the practice of a large number of large, listed companies, which for their part have only created one uniform authorized capital.
The Authorized Capital 2025 shall authorize the Management Board until 21 May 2030 to increase the share capital of the Company with the approval of the Supervisory Board by up to EUR 60,000,000.00 for cash and/or contributions in kind by issuing new bearer shares with no-par value on one or more occasions.
If the Management Board exercises the authorization proposed for resolution under agenda item 7 b) during the term of the authorization, the shareholders of the Company are generally entitled to subscription rights. To facilitate the processing, it shall also be possible to issue the new shares to credit institutions, securities institutions or financial institutions or a consortium thereof with the obligation to offer the shares to the Company’s shareholders for subscription in accordance with their subscription right (indirect subscription right). However, pursuant to this authorization, the Management Board shall be entitled, with the approval of the Supervisory Board, to exclude this subscription right in the interests of the Company, in particular in the following cases:
| a) | The Management Board shall be able to exclude subscription rights of shareholders with the approval of the Supervisory Board in order to eliminate fractional amounts from the subscription right of the shareholders. Fractional amounts can follow from the issuing volume and the determination of a practicable subscription ratio. The exclusion of subscription rights for fractional amounts under the Authorized Capital 2025 enables the utilization of the proposed authorization in round amounts while maintaining an even subscription rights ratio. This facilitates the processing of the subscription rights. The exclusion of subscription rights therefore enhances practicability of the capital increase and facilitates the processing of the issuing of shares. Furthermore, the value of fractional amounts per shareholder is usually small. In contrast, the effort necessary for the issuance of shares without excluding subscription rights for fractional amounts would be significantly higher. The shares excluded from the subscription rights of shareholders as free fractional amounts will be utilized in the best possible way for the Company, either by sale on the stock exchange or in another way. Since the exclusion of subscription rights is restricted to fractional amounts, a potential disadvantageous dilutive effect for shareholders resulting from an exclusion of subscription rights is small. |
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| b) | The Management Board shall be able to exclude subscription rights of the shareholders with the approval of the Supervisory Board in order to grant subscription rights, as a compensation for dilutive effects, to the holders of option or conversion rights to shares of the Company or those liable under the corresponding option or conversion obligations arising from Bonds issued or guaranteed by the Company or its Group Companies to the extent to which they would be entitled after exercising these option or conversion rights or fulfilment of these option or conversion obligations. This allows for the possibility to grant a protection against dilutive effects to the holders of such instruments in a way accepted and desired in the market. The holders of such instruments are thus placed in the same position as if they were already shareholders. In order to provide the Bonds with such protection against dilutive effects, the subscription right of shareholders to these shares must be excluded. |
| c) | The Management Board shall be able to exclude subscription rights of shareholders with the approval of the Supervisory Board in the case of capital increases for contributions in kind. This shall serve the purpose to enable the acquisition of companies, parts of companies, interests in companies or other assets in exchange for granting of shares of the Company. In order to remain internationally competitive in particular, the Company must be able to act quickly and in a flexible manner on the international markets in the interests of its shareholders at all times. This includes, in particular, the option to acquire companies, parts of companies, interests in companies or other assets to improve the own position. For the sellers of attractive acquisition targets, it can be of particular interest to be able to (also) acquire shares in the acquiring company instead of cash. Also, the acquisition of such acquisition targets in exchange for shares is a liquidity-preserving measure that avoids an increase in the Company’s level of debt. The Company should be put in a position to be able to grant shares as consideration, as the aforementioned acquisition opportunities usually only exist for a short period of time and therefore in most instances the creation of the new shares required for this cannot be resolved upon by a General Meeting that would have to be convened first in order to carry out an ordinary capital increase. With the proposed authorization to exclude subscription rights, the Company retains the necessary flexibility – in line with the existing Authorized Capital 2020/II – to take advantage of opportunities to acquire companies, parts of companies, interests in companies or other assets in a quick and flexible manner. The exclusion of subscription rights results in a pro rata reduction in the relative shareholding quota and the relative share of voting rights of the existing shareholders. However, if subscription rights were to be granted, the acquisition of companies, parts of companies, interests in companies or other assets in exchange for shares would not be possible and the described advantages for the Company and the shareholders would therefore not be achievable. The financial interests of the shareholders of the Company are protected by the statutory obligation of the Management Board to issue the new shares in the event of a capital increase in kind at an issue price that is in an appropriate relative proportion to the value of the contribution in kind. |
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| d) | The Management Board shall be able to exclude subscription rights of the shareholders with the approval of the Supervisory Board in case of capital increases for cash pursuant to sec. 203 (2) sentence 2, 186 (3) sentence 4 AktG if the issue price for the shares does not significantly fall below the stock exchange price of the shares of the Company already listed at the time of the determination of the issue price, and the proportionate amount of the share capital of the Company attributable to the shares issued exceeds 10% of the share capital existing at the time the authorization is exercised first neither at the time of this authorization coming into effect nor at the time of the exercise of this authorization. Although the German Future Financing Act (Zukunftsfinanzierungsgesetz – ZuFinG) raised the legal maximum limit for the simplified exclusion of subscription rights in sec. 186 (3) sentence 4 AktG from 10% to now 20% of the share capital, the proposed resolution of the Management Board and the Supervisory Board deliberately does not exploit this expanded legal framework, but leaves it at the previous maximum limit of 10% of the share capital in the interest of the shareholders. The possibility to exclude subscription rights in analogous application of sec. 186 (3) sentence 4 AktG puts the Company in a position to take advantage of favorable stock market situations effectively and close to the current stock market price and, by setting the issue price close to the market, to achieve the highest possible issue amount and a significant strengthening of its own funds. The authorization thus enables the Company to cover any short-term capital needs and to use the respective stock market price of the shares of the Company to strengthen its own capital. By waiving the subscription right whose processing is time- and cost-consuming (inter alia, with respect to the minimum two-week exercise period pursuant to sec. 186 (1) sentence 2 AktG) the equity requirements can be met in a very timely manner by way of short-term market opportunities within the interest of the Company and its shareholders, and new shareholder groups in Germany and abroad can be gained. The flexibility associated with the exclusion of subscription rights is an important instrument for the Company to take advantage of opportunities in rapidly changing markets. The issue amount for the new shares must be in line with the stock market price of the shares already listed on the stock exchange and must not differ significantly from the current stock market price, in particular not be significantly lower. This ensures that an appropriate market consideration for the new shares is always guaranteed in the interest of the Company and all its shareholders. |
The exclusion of subscription rights leads to a reduction in the relative shareholding and voting rights of the shareholders impacted by this exclusion. This dilution is kept appropriately low by ensuring that the proportional amount of the share capital allocated to shares issued in a capital increase for cash under the exclusion of subscription rights from the Authorized Capital 2025 must not exceed a total of 10% of the share capital. This limit shall also include the proportionate amount of share capital attributable to shares which are issued or sold during the period of validity of this authorization with exclusion of subscription rights in direct, analogous or corresponding application of sec. 186 (3) sentence 4 AktG as well as the proportionate amount of the share capital attributable to shares issued or to be issued to satisfy option or conversion rights or to fulfil option or conversion obligations from Bonds, if the Bonds are issued during the period of validity of this authorization with exclusion of subscription rights in analogous application of sec. 186 (3) sentence 4 AktG. This ensures that the aforementioned maximum limit of 10% is not exceeded, and the financial and voting rights interests of the shareholders are adequately protected when the Authorized Capital 2025 is utilized under the exclusion of subscription rights. Shareholders who are interested in maintaining their shareholding in full also in principle have the opportunity to acquire shares of the Company on the stock exchange and thus under market conditions when the Authorized Capital 2025 is utilized under the exclusion of subscription rights in accordance with sec. 186 (3) sentence 4 AktG.
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The Management Board may only exercise the authorization to exclude subscription rights granted in regard to the Authorized Capital 2025 in the shareholders’ interest to the extent that the proportional amount of the total shares issued subject to an exclusion of subscription rights exceeds 10% of the share capital neither at the time of this authorization coming into effect nor at the time of the exercise of this authorization. In case that during the period of validity of the Authorized Capital 2025 until its utilization, other authorizations on the issuance or on the sale of shares of the Company or the issuance of rights which authorize or bind to the subscription of shares of the Company are exercised and the subscription rights are excluded, such subscription rights will be taken into account with regard to the aforementioned limit of 10% of the share capital.
When considering all the aforementioned circumstances, the Management Board considers the exclusion of subscription rights for the Authorized Capital 2025 for the reasons outlined and taking into account any potential dilutive effects taking effect to the detriment of the shareholders to be appropriate, necessary, and reasonable, and objectively justified when weighing the interests of the Company against those of the shareholders.
Currently, there are no specific plans to utilize the Authorized Capital 2025. The Management Board will carefully consider, in each case, whether to make use of the authorization to utilize the authorized capital and, if applicable, the authorization to exclude subscription rights. It will only make such a decision if it is in the best interest of the Company and all its shareholders, and if it is proportionate and reasonable.
The Management Board will report on each utilization of the authorization granted in accordance with agenda item 7 b) at the respective following General Meeting.
| 2. | Written report by the Management Board regarding item 8 of the agenda |
The Management Board in the following reports on the reasons which authorize it in certain cases to exclude the shareholders’ subscription rights in the event of an issue of option and/or convertible bonds or any combination thereof (“Bonds”) (sec. 221 (4) sentence 2 AktG in conjunction with sec. 186 (4) sentence 2 AktG).
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Appropriate capital resources are fundamental for the development of the business. By issuing Bonds, the Company is able to use attractive financing possibilities, depending on the market situation, e.g. for the purpose of acquiring low-interest debt capital. For this reason, the Management Board and the Supervisory Board propose to the Annual General Meeting that the Management Board be authorized to issue Bonds and to create a corresponding Conditional Capital 2025. The conditional capital increase will only be implemented to the extent that the holders of Bonds issued for cash consideration on the basis of the authorization granted to the Management Board exercise their option or conversion rights, or fulfil any conversion obligations, and to the extent that other forms of fulfilment are not used for servicing.
The Company shall be able to use the German or international capital market or both, depending on the market situation, where appropriate also through its Group Companies, and to issue the Bonds in euro or, capped at the equivalent value in euros, in the official currency of an OECD member state. The Bonds shall be capable of stipulating mandatory conversions, for example by way of an obligation to exercise the conversion or option right. Furthermore, it shall be possible to stipulate that the Bonds may also be fulfilled through supply of treasury shares of the Company or through payment of the equivalent value in cash, instead of shares from the conditional capital.
The proportional amount of the share capital of the shares to be subscribed per individual partial bond may not exceed the nominal amount, or as the case may be, any issue price below the nominal amount of the individual partial bond. The option or conversion price may not be lower than a minimum issue price, the basis for the calculation of which is described in the authorization resolution. The criterion for the calculation will be the respective market price of the Company’s share prevailing at the time of placement of the Bonds; alternatively, in case of option or conversion obligations, the stock market price of the Company’s shares prevailing at the time when the option or conversion price is calculated as defined in more detail by the Bond Conditions. Without prejudice to sec. 9 (1) AktG and sec. 199 AktG, the option or conversion price may be adjusted to preserve the value in accordance with the precise terms and conditions of the respective bond based on an anti-dilution or adjustment clause if the Company increases the share capital prior to the expiry of the conversion or option term, granting subscription rights to its shareholders in the process, or issues or guarantees further Bonds and does not grant any subscription right to the holders of existing conversion and option rights or obligations. The Bond Conditions may also stipulate adjustments to the option or conversion price to preserve their value with regard to any other measure of the Company which may result in a dilution of the value of the option or conversion rights or obligations.
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When issuing Bonds, the shareholders are generally to be granted subscription rights. In order to facilitate processing, it shall also be possible to issue the Bonds to credit or securities institutions, financial institutions, or a consortium of such institutions with the obligation to offer such Bonds to the shareholders for subscription in accordance with the shareholders’ subscription rights (indirect subscription right). In certain cases, however, the Management Board shall also be authorized to exclude the subscription rights of the shareholders with the approval of the Supervisory Board. Such cases are listed in the proposal for resolution and will be described in detail below:
| a) | The Management Board shall be authorized to exclude with the approval of the Supervisory Board the shareholders’ subscription rights in order to eliminate fractional amounts from the shareholders’ subscription rights. Fractional amounts can follow from the issuing volume and the determination of a practicable subscription ratio. The exclusion of subscription rights for fractional amounts enables the utilization of the proposed authorization in round amounts while maintaining an even subscription rights ratio. This facilitates the processing of the subscription rights. The exclusion therefore enhances practicability of the capital increase and facilitates the processing of the issuing of Bonds. Also, the value of fractional amounts per shareholder is usually small. In contrast, the effort necessary for the issuance of Bonds without excluding subscription rights for fractional amounts is significantly higher. The Bonds excluded from shareholders’ subscription rights as free fractional amounts will be utilized in the best possible way for the Company, either by disposal on the stock exchange or in another way. Since the exclusion of subscription rights is restricted to fractional amounts, a potential disadvantageous dilutive effect for shareholders resulting from an exclusion of subscription rights is small. |
| b) | The Management Board shall be authorized to exclude with the approval of the Supervisory Board the shareholders’ subscription rights in order to grant holders or creditors of option or conversion rights to shares of the Company or debtors of corresponding option or conversion obligations subscription rights as compensation against effects of dilution to the extent to which they would be entitled to such rights upon exercising such option or conversion rights or fulfilling such option or conversion obligations. The customary market practice of excluding subscription rights in favor of the holders of existing Bonds with option or conversion rights or conversion or option obligations has the advantage that the conversion or option price for the Bonds already issued, which routinely feature an anti-dilution mechanism, does not have to be discounted. This means that the Bonds can be placed more attractively in multiple tranches, and more funds can be raised overall as a result. The proposed exclusions of subscription rights are therefore in the interests of the Company and its shareholders. |
| c) | The Management Board shall be authorized to exclude with the approval of the Supervisory Board the shareholders’ subscription rights if the Bonds are issued against contributions in kind for the purpose of acquiring companies, parts of companies, interests in companies or other assets. This opens up the possibility of using Bonds as acquisition currency in suitable individual cases, for example in connection with the (also indirect) acquisition of companies, parts of companies, participations in companies or other assets. This opens up the possibility of using Bonds as an acquisition currency in suitable individual cases. This possibility creates an advantage in the competition for interesting acquisition targets as well as the necessary scope to take advantage of opportunities to acquire companies, parts of companies, interests in companies or other assets in a way that preserves liquidity. To remain competitive especially in an international perspective, the Company must in the interest of its shareholders at any time be in a position to act quickly and flexibly on the international markets. The Management Board will ensure that the value of the in-kind contribution is in reasonable proportion to the theoretical market value of the Bonds as in line with recognized methods of financial mathematics. |
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| d) | The Management Board shall be authorized to exclude with the approval of the Supervisory Board the shareholders’ subscription rights insofar as the issue price of a Bond is not significantly lower than the theoretical market value calculated according to recognized actuarial methods and the sum of these shares issued subject to an exclusion of subscription rights does not exceed 10% of the respective share capital, neither at the time of resolution on such authorization nor at the time of its utilization. |
In accordance with sec. 221 (4) sentence 2 AktG, the provision in sec. 186 (3) sentence 4 AktG shall apply analogously to the exclusion of subscription rights upon the issuance of Bonds. Placement of Bonds while excluding the subscription rights of shareholders enables the Company to take advantage of favorable capital market situations in the short-term and thus to generate a significantly higher inflow of funds than in the event of an issuance upholding the subscription rights. If subscription rights were granted, successful placement would be endangered or associated with additional time and cost expenditure (inter alia, with respect to the minimum two-week exercise period pursuant to sec. 186 (1) sentence 2 AktG) due to the uncertainty with regard to the exercise of the subscription rights. Conditions which are favorable to the Company and which are as market-oriented as possible can only be fixed if the Company is not bound by them for too long during an offer period. Otherwise, a significant markdown would be required in order to ensure the attractiveness of the conditions and thus the chances for success of the respective issue throughout the offer period.
The shareholders’ interests to maintain the value of their shareholding in the Company are protected by issuing the Bonds at a price not significantly below the theoretical market value. The theoretical market value is to be determined on the basis of recognized actuarial methods. When setting the price, the Management Board will keep any discount on the theoretical market value as low as possible, taking into consideration the respective capital market situation. Thus, the calculated market value of a subscription right will be decreased to almost zero, so that the shareholders do not incur any noteworthy economic disadvantage from the exclusion of subscription rights.
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The dilution of the shareholders’ influence conveyed by their voting rights is kept low since the volume of a subscription right exclusion is limited. The total number of shares represented by the Bonds issued without subscription rights may not exceed 10% of the respective share capital, neither at the time of resolution on such authorization nor at the time of its utilization. Although the German Future Financing Act (Zukunftsfinanzierungsgesetz – ZuFinG) raised the legal maximum limit for the simplified exclusion of subscription rights in sec. 186 (3) sentence 4 AktG from 10% to now 20% of the share capital, the proposed resolution of the Management Board and the Supervisory Board deliberately does not exploit this expanded legal framework, but leaves it at the previous maximum limit of 10% of the share capital in the interest of the shareholders. Any shares issued or sold from other sources according to a direct, analogous or corresponding application of sec. 186 (3) sentence 4 AktG with an exclusion of subscription rights during the period from the resolution of the Annual General Meeting on the authorization to issue Bonds until the exercise of such authorization shall be credited against such limit. Furthermore, any rights permitting or requiring the subscription of shares of the Company and issued in direct, analogous or corresponding application of sec. 186 (3) sentence 4 AktG with an exclusion of subscription rights during the period from the resolution of the Annual General Meeting on the authorization to issue Bonds until the exercise of such authorization shall also be credited against such limit.
The Management Board may exercise the authorizations to exclude subscription rights to the extent such that the proportional number of all shares attributable to Bonds with exclusion of subscription rights does not exceed 10% of the share capital. This 10% limit shall not be exceeded, neither at the time of resolution on such authorization nor at the time of its utilization. This limits the total volume of Bonds issued without subscription rights. The shareholders are thus additionally protected against any inappropriate dilution of their existing equity interests. Crediting clauses ensure that the Management Board will not exceed the 10% limit by additionally exercising other authorizations – such as any Authorized Capital – and in doing so also excluding the shareholders’ subscription rights.
Duly taking all circumstances stated herein into account, the Management Board considers the exclusion of subscription rights appropriate, necessary, adequate as well as materially justified weighing the interests of the Company and the interests of shareholders for the stated reasons and in consideration of the potential dilutive effect to the disadvantage of the shareholders.
Currently, there are no specific plans for exercising the authorization to issue Bonds. In any case, the Management Board will carefully examine whether the exercise of the authorization and any potential exclusion of subscription rights is in the interest of the Company and its shareholders.
The Management Board will report to the respective following General Meeting on any exercise of the authorization pursuant to agenda item 8 b).
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| III. | Further information and notes regarding the convening |
| 1. | Total number of shares and voting rights |
At the time of the convening of the Annual General Meeting, the share capital of the Company is composed of 293,413,449 non-par value shares and consists solely of bearer shares, having one vote per share. The Company does not hold any treasury shares at the time of the convening of the Annual General Meeting. Therefore, there are 293,413,449 voting rights at the time of the convening of the Annual General Meeting.
| 2. | Requirements for the participation in the Annual General Meeting and the exercise of voting rights |
Only those shareholders are entitled to participate in the Annual General Meeting and to exercise their voting rights who have registered with the Company in text form in German or English by no later than the end of 15 May 2025, 24:00 hours (CEST) using one of the contact options below and have provided the Company with evidence of their entitlement to participate in the Annual General Meeting and to exercise their voting rights:
Fresenius
Medical Care AG
c/o Computershare Operations Center
80249 Munich
Germany
or by e-mail: anmeldestelle@computershare.de
As evidence of their entitlement to attend the Annual General Meeting and to exercise their voting rights, shareholders must, by the end of 15 May 2025, 24:00 hours (CEST) at the latest, provide evidence of their shareholding issued by the ultimate intermediary, usually their depositary institution, in text form in German or English to one of the aforementioned contact options. Evidence pursuant to sec. 67c (3) AktG is sufficient. The evidence of entitlement must relate to the close of business on the 22nd day prior to the Annual General Meeting, i.e., 30 April 2025, 24:00 hours (CEST) (“Record Date”).
Admission tickets to participate in the Annual General Meeting will be sent to eligible shareholders after the receipt of their registration and evidence of shareholding in due form and in a timely manner using one of the aforementioned contact options. Unlike the registration for the Annual General Meeting and the evidence of shareholding, the admission tickets merely serve as organizational aids and are not required in order to participate in the Annual General Meeting or to exercise voting rights. Most depositary institutions will ensure that admission tickets are received in good time, provided that shareholders complete the admission ticket order forms sent to them by their depositary institution and return them to their depositary institution in good time for the latter to be able to register and provide evidence of shareholding for the shareholder in good time. We ask shareholders, in their own interest, to contact their depositary institution as early as possible to ensure an early registration and a timely receipt of the admission ticket.
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As regards the participation in the Annual General Meeting and the exercise of voting rights, only those who have duly provided evidence of shareholding are considered shareholders in relation to the Company. The right of participation in the Annual General Meeting and the extent of the voting rights are solely determined by the shareholding on the Record Date. The Record Date is not accompanied by a lock on the sale of shares, i.e., shareholders may dispose of their shares even after registration. Even a full or partial sale of the shareholding after the Record Date does not affect the right to participate and the extent of the voting rights. This also applies accordingly to the acquisition of shares after the Record Date. Persons who do not yet hold shares on the Record Date and become shareholders only thereafter are entitled to participate in the Annual General Meeting and exercise voting rights for the shares held by them only to the extent that they are authorized by proxy or otherwise authorized to exercise rights. However, the Record Date has no relevance for dividend entitlement because this is solely linked to the shareholder status on the date of the resolution on the allocation of distributable profit by the Annual General Meeting.
| 3. | Proxy voting procedure |
Shareholders may also have their rights in connection with the Annual General Meeting exercised by a proxy, e.g., an intermediary, an association of shareholders, a proxy advisor or another person of their choice. If the shareholder authorizes more than one person, the Company may reject one or more of these. For the authorization of the voting proxies appointed by the Company who are bound by instructions, the special features described under Section III.4 apply.
The granting of proxy authorization, its revocation and the proof of authorization vis-à-vis the Company must be in text form. Intermediaries as defined by sec. 67a (4) AktG, associations of shareholders, proxy advisors or other persons as defined by sec. 135 (8) AktG, insofar as proxy authorization shall be granted to them, may require different procedures, which need to be obtained from them in each case.
The proxy authorization may be granted to the proxy or granted or proven to the Company. The proof of the authorization of a proxy may either be presented at the entrance to the meeting venue of the Annual General Meeting on the day of the Annual General Meeting or be submitted to the Company in advance to one of the following contact options:
Fresenius
Medical Care AG
c/o Computershare Operations Center
80249 Munich
Germany
or by e-mail: anmeldestelle@computershare.de
In case the proxy authorization or the proof of the authorization of a proxy is submitted to the Company in advance to the postal address or e-mail address stated above, we for organizational reasons ask for a corresponding submission by 21 May 2025, 24:00 hours (CEST).
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The submission may also be made via electronic communication using the password-protected authorization and instruction system (Shareholder Portal) in accordance with the explanations under Section III.5.
This does not affect the possibility of granting proxy authorization to a third party at the Annual General Meeting on site.
In order to allow a clear allocation of the proxy authorization, please state the full name or company, place of residence or business address, and admission ticket number of the shareholder.
After registration has been completed, the Company will provide a form that can be used to grant proxy authorization together with the admission ticket. A corresponding form for granting proxy authorization can also be downloaded from the Company’s website at:
www.freseniusmedicalcare.com/en/agm
If the Company receives divergent declarations in connection with the granting and revocation of a proxy authorization by different means of transmission and if the Company cannot identify which of these declarations was made last, these declarations shall be treated as binding in the following order of transmission: (1) authorization and instruction system for the Annual General Meeting (Shareholder Portal), (2) pursuant to sec. 67c (1) and (2) sentence 3 AktG in conjunction with Art. 2 (1) and (3) and Art. 9 (4) of the Implementing Regulation (EU) 2018/1212, (3) e-mail and (4) paper form.
Registration and evidence of shareholding in due form and in a timely manner in accordance with the above provisions are also required in case a proxy authorization is granted (see Section III.2, “Requirements for the participation in the Annual General Meeting and the exercise of voting rights”). This does not preclude the granting of a proxy authorization after registration and providing evidence of shareholding.
| 4. | Voting procedure for proxies appointed by the Company and bound by instructions |
The Company offers its shareholders or their proxies the opportunity to be represented by proxies appointed by the Company and bound by instructions. The proxies appointed by the Company are employees of the Company or of an affiliated company of the Company who vote on the individual agenda items in accordance with the instructions given to them based on authorizations by shareholders or their proxies. These proxies appointed by the Company must be granted proxy authorization in text form as well as explicit instructions for the exercise of voting rights. The proxies appointed by the Company will not exercise the voting rights at their own discretion but exclusively on the basis of the instructions given by the shareholder. If no explicit and unambiguous instructions have been given, the proxies appointed by the Company will abstain from voting on the relevant agenda items. If an individual vote is to be taken on an agenda item without this having been communicated in advance of the Annual General Meeting, an instruction on this agenda item as a whole shall also be deemed to be a corresponding instruction for each item of the individual vote. The proxies appointed by the Company will not accept any instructions to speak, ask questions, propose motions, submit election proposals or make statements for the record, either in the run-up to the Annual General Meeting or during the Annual General Meeting, nor will they exercise any other shareholder rights.
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After registration has been completed, the Company will provide a form together with the admission ticket that can be used to grant proxy authorization and issue instructions. A corresponding form for granting proxy authorization and issuing instructions can also be downloaded from the Company’s website at:
www.freseniusmedicalcare.com/en/agm
Proxy authorization including voting instructions for the proxies appointed by the Company may already be submitted to the Company prior to the Annual General Meeting. In this case, proxy authorization and voting instructions must be received by the Company for organizational reasons by 21 May 2025, 24:00 hours (CEST) at one of the following contact options:
Fresenius
Medical Care AG
c/o Computershare Operations Center
80249 Munich
Germany
or by e-mail: anmeldestelle@computershare.de
The submission may also be made via electronic communication using the password-protected authorization and instruction system (Shareholder Portal) in accordance with the explanations under Section III.5.
This does not preclude the possibility to grant proxy authorization to the proxies appointed by the Company and to give them instructions at the Annual General Meeting until the beginning of voting.
The authorization of proxies appointed by the Company does not preclude a personal participation in the Annual General Meeting. If a shareholder wishes to participate and exercise his or her shareholders’ rights in person or via another proxy despite having authorized the proxies appointed by the Company, participation in person or via such other proxy is deemed a revocation of the proxy authorization granted to the proxies appointed by the Company.
If the Company receives divergent declarations in connection with the granting and revocation of a proxy authorization or instructions by different means of transmission and if the Company cannot identify which of these declarations was made last, these declarations shall be treated as binding in the following order of transmission: (1) authorization and instruction system for the Annual General Meeting (Shareholder Portal), (2) pursuant to sec. 67c (1) and (2) sentence 3 AktG in conjunction with Art. 2 (1) and (3) and Art. 9 (4) of the Implementing Regulation (EU) 2018/1212, (3) e-mail and (4) paper form.
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Registration and evidence of shareholding in due form and in a timely manner in accordance with the provisions stated above are also required in case a proxy authorization is granted to the proxies appointed by the Company (see Section III.2, “Requirements for the participation in the Annual General Meeting and the exercise of voting rights”).
| 5. | Electronic transmission of proxy authorization and instructions, revocation of proxy authorizations and proof of authorization (Shareholder Portal) |
Proxy authorizations and instructions, the revocation of proxy authorizations and proof of authorization can until 21 May 2025, 24:00 hours (CEST) – subject to technical availability – also be transmitted electronically to the Company via an internet-based authorization and instruction system (“Shareholder Portal”). Shareholders who have properly registered and properly provided evidence of their shareholding can access this password-protected Shareholder Portal expected to be accessible from 30 April 2025 on the Company’s website at:
www.freseniusmedicalcare.com/en/agm
Further information and deadlines for using the Shareholder Portal can also be found there. Access to the password-protected Shareholder Portal requires the entry of access data, which will be sent to shareholders or their proxies with the admission ticket after proper registration and provision of evidence of shareholding.
| 6. | Information on shareholders’ rights pursuant to sec. 122 (2), sec. 126 (1), sec. 127, sec. 131 (1) AktG |
| a) | Supplements to the agenda at the request of a minority according to sec. 122 (2) AktG |
Shareholders whose total combined shares amount to the twentieth part of the share capital or the proportionate amount of the share capital of EUR 500,000.00 (that is equivalent to 500,000 non-par value shares) can request, according to sec. 122 (2) AktG, that items be placed on the agenda and be published. For each new item, reasons or a draft resolution must be attached.
Supplemental requests must be received by the Company at least 30 days prior to the Annual General Meeting in writing; the day of receipt and the day of the Annual General Meeting are not included in that calculation. Therefore, the last possible date for receipt is 21 April 2025, 24:00 hours (CEST).
Applicants must provide evidence that they have held the minimum quantity of shares for at least 90 days prior to the day of the receipt of the supplemental request by the Company and that they hold the shares until the decision of the Management Board on the supplemental request (sec. 122 (2), (1) sentence 3 AktG). When calculating the shareholding period, sec. 70 AktG must be observed.
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We ask shareholders to submit any supplemental requests to the following address:
Fresenius
Medical Care AG
– Vorstand –
Else-Kröner-Straße 1
61352 Bad Homburg v.d. Höhe
Germany
Unless made public with the invitation of the Annual General Meeting, supplements to the agenda that are required to be published are published without undue delay upon receipt of the supplemental request in the German Federal Gazette (Bundesanzeiger). In addition, such requests are made accessible to shareholders on the Company’s website at
www.freseniusmedicalcare.com/en/agm
without undue delay and communicated pursuant to sec. 125 (1) sentence 3 AktG.
| b) | Motions and election proposals by shareholders according to sec. 126 (1), sec. 127 AktG |
Prior to the Annual General Meeting shareholders may submit countermotions regarding proposals made by the Management Board and/or the Supervisory Board on specific agenda items as well as election proposals to the Company. Countermotions and election proposals to be made available which are received by the Company at least 14 days before the Annual General Meeting, not including the day of receipt and the day of the Annual General Meeting, i.e., no later than 7 May 2025, 24:00 hours (CEST), using one of the contact options below, will be made available to the other shareholders, including the name of the shareholder and any reasons, on the Company’s website at www.freseniusmedicalcare.com/en/agm.
Any comments of the management of the Company on countermotions or election proposals will also be published under the aforementioned website.
Countermotions and election proposals must be sent exclusively to one of the following contact options:
Fresenius
Medical Care AG
– Investor Relations –
Else-Kröner-Straße 1
61352 Bad Homburg v.d. Höhe
Germany
or by e-mail: hauptversammlung@freseniusmedicalcare.com
Countermotions or election proposals addressed elsewhere will not be considered.
A countermotion and any reasons given do not need to be made accessible under the prerequisites of sec. 126 (2) sentence 1 AktG. Pursuant to sec. 126 (2) sentence 2 AktG, any reasons for a countermotion also do not need to be made available if they amount to more than 5,000 characters in total. Sec. 126 AktG applies mutatis mutandis to election proposals of a shareholder pursuant to sec. 127 AktG. In addition, the Management Board is not obligated to publish an election proposal pursuant to sec. 127 sentence 3 AktG if such election proposal fails to contain the information required by sec. 124 (3) sentence 4 AktG and sec. 125 (1) sentence 5 AktG.
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| c) | Right to information pursuant to sec. 131 (1) AktG |
Upon request pursuant to sec. 131 (1) AktG, each shareholder shall in the Annual General Meeting be provided with information on the affairs of the Company by the Management Board including the legal and business relationships of the Company with affiliated companies and about the situation of the group and the companies included in the consolidated financial statements. This applies only to the extent that the information is necessary for a proper evaluation of an item on the agenda. The Management Board may refuse to provide information on the grounds listed in sec. 131 (3) sentence 1 AktG.
Pursuant to sec. 131 (2) sentence 2 AktG in conjunction with Article 18 (2) sentence 2 of the Articles of Association of the Company, the chairperson of the meeting is entitled to reasonably limit the shareholders’ speaking time and the time to ask questions at the beginning or during the Annual General Meeting, insofar as this is permitted by law.
| d) | Further information on the rights of the shareholders |
Further explanations of the shareholders’ rights under sec. 122 (2), sec. 126 (1), sec. 127 and sec. 131 (1) AktG are available on the Company’s website at:
www.freseniusmedicalcare.com/en/agm
| 7. | Information on the Company’s website |
This invitation to the Annual General Meeting, the documents to be made available to the Annual General Meeting and further information in connection with the Annual General Meeting pursuant to sec. 124a AktG can be accessed via the website of the Company at
www.freseniusmedicalcare.com/en/agm
as of the convening of the Annual General Meeting and will also be accessible there during the Annual General Meeting.
The documents to be made available to the General Meeting will also be available for inspection by the shareholders at the Annual General Meeting. These documents will also be available for inspection by the shareholders at the offices of the Company, Fresenius Medical Care AG, Else-Kröner-Straße 1, 61352 Bad Homburg v. d. Höhe, Germany, from the date of the convening of the Annual General Meeting.
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In addition, it is intended to publish the speech of the chairwoman of the Management Board on the aforementioned website of the Company prior to the Annual General Meeting.
The voting results will also be published on the aforementioned website of the Company after the Annual General Meeting.
| 8. | Audio and visual broadcast |
The chairperson of the meeting is expected to arrange that all shareholders of the Company and interested members of the public can follow the introductory statement of the chairperson of the meeting and the speech of the chairwoman of the Management Board live on the internet in video and audio from 10:00 hours (CEST) on the day of the Annual General Meeting. In this case, unrestricted access to the live broadcast will be made available via the website:
www.freseniusmedicalcare.com/en/agm
| 9. | Time specifications in this invitation |
The time specifications in this invitation refer to the Central European Summer Time (CEST) unless explicitly stated otherwise. With regard to the Coordinated Universal Time (UTC) this translates to UTC = CEST minus two hours.
| 10. | Communication via intermediaries |
In accordance with sec. 67c AktG in conjunction with the Implementing Regulation (EU) 2018/1212, registration for the Annual General Meeting, evidence of shareholding, proxy authorization to third parties as well as authorization and instructions to the proxies appointed by the Company can also be transmitted to the Company via intermediaries in ISO format 20022 (e.g., SWIFT with the code: CMDHDEMMXXX) within the applicable, aforementioned deadlines. Authorization via the SWIFT Relationship Management Application (RMA) is required for the use of SWIFT communication.
Shareholders who wish to make use of this means of communication are asked to contact their respective (ultimate) intermediary, for example their custodian bank, for further details.
| 11. | Notice to the holders of American Depositary Receipts (ADR) regarding the Annual General Meeting |
Holders of ADR will generally submit voting instructions to The Bank of New York Mellon, in its capacity as the depositary bank, with respect to the shares represented by their ADR. The Bank of New York Mellon will distribute to ADR holders (a) a notice informing ADR holders of the electronic availability of the invitation to the Annual General Meeting and the agenda, as well as the materials referred to in the agenda, and (b) a voting instruction form. Voting instructions must be received by The Bank of New York Mellon by no later than 12 May 2025 prior to 17:00 hours (EDT) (UTC = EDT plus four hours). Persons whose ADR are held by a bank, a broker or another intermediary may be required to provide their voting instructions through their intermediaries, who will in turn forward such instructions to the depositary bank.
Page 29
| 12. | Data protection information for shareholders and their proxies |
When shareholders register for the Annual General Meeting and exercise their shareholder rights in relation to the Annual General Meeting or issue a proxy authorization, the Company collects personal data about the shareholders and/or their proxies in order to enable the shareholders and their proxies to exercise their rights in relation to the Annual General Meeting. The Company processes personal data as a data controller in accordance with the provisions of the General Data Protection Regulation (“GDPR”) and all other applicable laws.
Details on the processing of personal data and the rights of shareholders and/or their proxies under the GDPR can be found on the Company’s website at:
www.freseniusmedicalcare.com/en/agm
Hof (Saale), April 2025
Fresenius Medical Care AG
The Management Board
Page 30
Exhibit 99.2
Fresenius Medical Care AG
Compensation Report for the fiscal year 2024
Table of contents
| Introduction | 3 |
| The Fiscal Year in retrospect | 4 |
| Business performance and economic environment | 4 |
| Short-term incentive target achievement | 4 |
| Long-term incentive target achievement for the performance period ending at the end of the Fiscal Year | 4 |
| Compensation-relevant changes for the Management Board | 5 |
| Changes to the Management Board | 6 |
| Introduction and implementation of the Compensation System 2024+ | 6 |
| Guiding principles of the Compensation System 2024+ | 6 |
| Components of the Compensation System 2024+ | 8 |
| Compensation System 2020+ and Compensation System 2024+ in comparison | 9 |
| New pension arrangements: Cash pension allowance | 9 |
| Introduction of Share Ownership Guidelines | 9 |
| New performance targets for the long-term variable compensation | 10 |
| Compensation Governance for Management Board members | 10 |
| Compensation systems applying to compensation | 10 |
| Compensation structure (target compensation) | 12 |
| Compensation reviews | 13 |
| Horizontal comparison (peer group) | 13 |
| Vertical comparison (intra-company) | 13 |
| Result of the review of the appropriateness of the compensation | 14 |
| Caps and maximum compensation | 14 |
| Malus and clawback | 16 |
| Management Board members’ compensation | 16 |
| Fixed compensation components | 16 |
| Short-Term Incentive – MBBP 2024+ | 17 |
| Functioning | 18 |
| Link to strategy | 19 |
| Financial performance targets | 19 |
| Sustainability target | 20 |
| Overall target achievement | 21 |
| Long-Term Incentive – MB LTIP 2020 | 22 |
| Functioning | 23 |
| Link to strategy | 24 |
| Target values and target achievement (Allocation 2021) | 25 |
| Vested amounts (Allocation 2021) | 25 |
| Compliance with maximum compensation (Allocations 2021) | 26 |
| Compensation tables for the Management Board members in office in the Fiscal Year | 27 |
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| Outstanding share-based compensation components | 29 |
| MB LTIP 2024+ (Allocation in the Fiscal Year) | 29 |
| Overview of outstanding share-based compensation components | 31 |
| Temporal profile of the share-based compensation components | 32 |
| Share Ownership Guidelines and Shareholdings | 32 |
| Other benefits and commitments | 33 |
| Benefits from third parties | 33 |
| Pension-related obligations | 33 |
| Cash pension allowance and defined contribution pension commitments | 33 |
| Defined benefit pension commitments | 34 |
| U.S.-based 401(k) Savings Plan | 35 |
| Post-employment non-competition covenant | 35 |
| Change of control | 35 |
| Severance payment cap | 36 |
| Continued compensation in cases of sickness | 36 |
| Further information | 36 |
| Former Management Board members’ compensation | 36 |
| Remuneration of the members of the Supervisory Board | 38 |
| Changes to the remuneration in the Fiscal Year | 38 |
| Remuneration awarded and due in the Fiscal Year | 39 |
| Comparative presentation of the development of the compensation | 40 |
| Metrics for the performance of the Company | 40 |
| Information on the compensation awarded and due | 40 |
| Financial figures | 40 |
| Compensation of the Management Board | 41 |
| Compensation of the Supervisory Board | 41 |
| Compensation of the employees | 41 |
| Table on the development of the compensation | 42 |
| Outlook for the compensation for 2025 | 42 |
| Auditor’s Report | 43 |
2
Introduction
The Compensation Report of Fresenius Medical Care AG (Company) for the fiscal year 2024 (Fiscal Year) was prepared in accordance with the requirements of Section 162 of the German Stock Corporation Act (Aktiengesetz – AktG). The Compensation Report includes individualized and comprehensive information on the compensation within the meaning of Section 162 paragraph 1 AktG awarded and due to current and former members of the management board and of the supervisory board in the Fiscal Year and benefits within the meaning of Section 162 paragraph 2 AktG awarded or promised to members of the management board.
PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PwC) audited the Compensation Report from a formal perspective pursuant to Section 162 paragraph 3 AktG. In addition to such audit from a formal perspective which is required by law with respect to whether the report contains the information required by law, PwC was instructed to carry out an audit from a substantive perspective of such information included in the Compensation Report. The auditor’s report is annexed to this Compensation Report.
The 2024 Annual General Meeting (AGM) of the Company approved the Compensation Report for 2023 with a majority of around 98.39% of the votes cast. The management board of the Company (Management Board) and the supervisory board of the Company (Supervisory Board) are therefore reaffirmed in the manner of reporting. The structure of the Compensation Report for the Fiscal Year and the level of detail of the information provided are essentially the same as in the previous year.
The Company existed in the legal form of a partnership limited by shares until November 30, 2023. Until then, the Company’s business was managed by its general partner, i.e. Fresenius Medical Care Management AG (General Partner). The General Partner exited the Company when the change in legal form took effect. The members of the management board of the General Partner then in office were appointed as members of the Management Board. No compensation was awarded or due to the former General Partner or the members of its supervisory board in the Fiscal Year. Details on the duration of the service agreements of the members of the Management Board can be found in the Company’s Declaration on Corporate Governance, which can be found on the Company’s website at www.freseniusmedicalcare.com/en/investors/corporate-governance/ in the section “Declaration on Corporate Governance.” The Compensation Report therefore generally no longer contains information on the compensation awarded or due to the General Partner or the members of its supervisory board in previous fiscal years. The information on compensation awarded or due to former members of the management board of the General Partner for their activities in this function continues to be reported where applicable.
Unless otherwise indicated, the following information on the compensation of the members of the Management Board relates to the members of the Management Board of the Company in office in the Fiscal Year. For the amounts, see the section “Compensation tables for the Management Board members in office in the Fiscal Year.”
For information on compensation of former members of the Management Board of the Company or of the management board of the former General Partner of the Company and the amounts of such compensation, see the section “Former Management Board members’ compensation.”
3
Certain disclosures in this Compensation Report fulfil reporting obligations from the company’s sustainability statement resulting from the application of the European Sustainability Reporting Standards (ESRS). The corresponding references are marked in the following, for example with [ESRS 2, 40g], and are located in or at the end of the corresponding sections in which the disclosures can be found.
The Fiscal Year in retrospect
The compensation awarded and due to the members of the Management Board in the Fiscal Year rewarded their performance in particular in achieving the Company’s strategic goals. At the same time, it provided effective incentives for the long-term value-creation of the Company – taking into account the interests of patients, shareholders, employees and other stakeholders as well as compensation practices in relevant comparable markets. Therefore, the compensation of the members of the Management Board made a significant contribution to promoting the business strategy and the long-term sustainable development of the Company and the group.
Business performance and economic environment
The general conditions for the business of Fresenius Medical Care further stabilized over the course of the Fiscal Year and essentially developed positively in line with expectations. However, the overall economic environment remained challenging in the Fiscal Year and, as in the previous year, business performance was impacted by inflation- and labor-related cost increases. Despite these macroeconomic challenges, Fresenius Medical Care’s global same market treatment volumes grew in the Fiscal Year. The positive effects of the continued far-reaching turnaround and transformation measures counteracted these burdens. Additional sustainable savings in connection with the FME25 program, further structural improvements and a continuous improvement in the operating performance of both business segments led to operating income growth. At the end of the Fiscal Year, the financial forecasts were fully achieved.
Short-term incentive target achievement
The business performance in the Fiscal Year was reflected by an overall target achievement of 99.20% to 127.92% for the short-term variable compensation component (Short-Term Incentive) for the Fiscal Year. For further details see the section “Short-Term Incentive – MBBP 2024+.”
Long-term incentive target achievement for the performance period ending at the end of the Fiscal Year
The performance period of the allocation made in 2022 under the Management Board Long Term Incentive Plan 2020 (MB LTIP 2020) as a long-term variable compensation component (Long-Term Incentive) ended upon the end of the Fiscal Year. The performance periods for the allocations made in 2023 and 2024 will only end in the coming years.
The target achievement for the allocation made in 2022 was governed by the fiscal years 2022, 2023 and 2024. The target achievement levels of the performance targets “revenue growth” and “net income growth” were calculated based on a compound annual growth rate (CAGR) over the entire three-year performance period. Annual target values applied to the performance target “return on invested capital” (ROIC).
4
Against this background, target achievement in contrast to the allocations for previous years is no longer reported per year, but per performance target. The target values and the target achievement were each as shown in the following table:
Target values and target achievement for the allocation 2022 under the MB LTIP 2020
| Target values | Actual values | Target achievement | ||||||||||||||||||||||||
| 0% | 100% | 200% | As reported | Currency translation adjustment |
At constant currency according to plan terms |
CAGR | ||||||||||||||||||||
| Revenue growth | ||||||||||||||||||||||||||
| 2022 | } | 10.1 | % | (8.0 | )% | 2.1 | % | } | ||||||||||||||||||
| 2023 | ≤ 2 | % | = 5 | % | ≥ 8 | % | 0.3 | % | 5.2 | % | 5.5 | % | 2.5 | % | 17 | % | ||||||||||
| 2024 | (0.6 | )% | 0.6 | % | 0.0 | % | ||||||||||||||||||||
| Net income growth | ||||||||||||||||||||||||||
| 2022 | } | (30.5 | )% | (6.1 | )% | (36.6 | )% | } | ||||||||||||||||||
| 2023 | ≤ 10 | % | = 17 | % | ≥ 20 | % | (25.9 | )% | 1.6 | % | (24.3 | )% | (19.3 | )% | 0 | % | ||||||||||
| 2024 | 7.8 | % | 1.6 | % | 9.4 | % | ||||||||||||||||||||
| Return on invested capital (ROIC) | ||||||||||||||||||||||||||
| 2022 | } | 3.3 | % | — | % | 3.3 | % | 0 | % | |||||||||||||||||
| 2023 | ≤ 5.5 | % | = 6.0 | % | ≥ 6.5 | % | 2.8 | % | — | % | 2.8 | % | 0 | % | ||||||||||||
| 2024 | 3.5 | % | — | % | 3.5 | % | 0 | % | ||||||||||||||||||
| Overall Target Achievement | 6 | % | ||||||||||||||||||||||||
The compensation under the MB LTIP 2020 vests on the third anniversary after the respective allocation and is required to be invested in shares of the Company acquired on the stock exchange which are to be held for at least one year. In accordance with recommendation G.10 of the German Corporate Governance Code (GCGC), the members of the Management Board therefore cannot dispose of the corresponding amounts before four years have passed since the respective allocation.
The specific amounts to be invested in shares of the Company from the aforementioned allocation for 2022 can be determined only after vesting in 2025 and will be disclosed in the Compensation Report for 2025.
Details on the vested amounts to be invested in shares of the Company in the Fiscal Year from the allocation for 2021 under the MB LTIP 2020 can be found in the section “Vested amounts (Allocation 2021).”
Information on the outstanding tranches of Long-Term Incentives, including a temporal profile of the individual tranches, can be found in the section “Outstanding share-based compensation components.”
Compensation-relevant changes for the Management Board
The amount of the target total direct compensation (consisting of base salary as well as the target amounts and allocation values for short-term and long-term variable compensation) of the members of the Management Board in office in the Fiscal Year remained unchanged from the previous year both overall and in terms of its individual components. The main changes relevant to the compensation for the Management Board compared to the previous year are as follows.
5
Changes to the Management Board
Dr. Jörg Häring has been appointed as a member of the Management Board with effect from June 1, 2024. Dr. Häring is responsible for the newly created department Global Legal, Compliance and Human Resources. Performance-based variable compensation components were granted or allocated to Dr. Häring in accordance with the Compensation System 2024+ on a pro rata basis for the period from his appointment as of June 1, 2024.
Mr. Craig Cordola, Ed.D., has been appointed as the member of the Management Board responsible for the Care Delivery business segment with effect from January 1, 2024. Mr. Cordola, Ed.D., succeeds Mr. William Valle, who left the Management Board at the end of December 31, 2023.
Introduction and implementation of the Compensation System 2024+
The Company’s 2024 AGM approved the “Compensation System 2024+” with a majority of around 87.58% of the votes cast. The Compensation System 2024+ was developed on the basis of the “Compensation System 2020+”, which had been approved by the Company’s 2020 AGM with a majority of around 95.05% of the votes cast. The Compensation System 2024+ in principle applies to the compensation of the Management Board from the Fiscal Year and has been implemented in the service agreements of the members of the Management Board.
Guiding principles of the Compensation System 2024+
The objective of the Compensation System 2024+ is to enable the members of the Management Board to participate reasonably in a sustainable and long-term development of the company’s business and to reward them based on their duties and performance as well as their success in managing the company’s economic and financial position giving due regard to the peer environment, and to make a significant contribution to the implementation and further development of the business strategy. [ESRS 2, 29a]
6
The guiding principles on which the Compensation System 2024+ is based are shown in the following diagram:
7
Components of the Compensation System 2024+
The following diagram shows the compensation components and further design elements of the Compensation System 2024+, which are described in more detail below:
8
Compensation System 2020+ and Compensation System 2024+ in comparison
The key differences between the Compensation System 2020+ and the Compensation System 2024+ are shown in the following diagram:
Significant changes relevant to compensation relate in particular to pension arrangements and the introduction of more stringent share ownership guidelines in addition to already existing shareholding requirements. In addition, a capital market-related and a non-financial, sustainability-related performance target have been introduced for allocations of long-term variable compensation from the Fiscal Year onwards.
New pension arrangements: Cash pension allowance
The pension scheme has been generally converted from pension commitments to pension allowances. The pension allowance amounts to 40% of the respective base salary and is paid out in cash for privately managed pension investments. Existing defined benefit pension commitments remain unaffected. Further details on this can be found in the section “Pension-related obligations.”
Introduction of Share Ownership Guidelines
The introduction of Share Ownership Guidelines is intended to tie the Management Board compensation even more closely to the interests of the shareholders and the sustainable development of Fresenius Medical Care. These guidelines provide that the Chairperson of the Management Board must invest 200% and the other Management Board members must invest 150% of their relevant annual base salary in shares of the Company. The highest annual base salary during the period in which the shares are to be acquired is to be applied. The shares must generally be acquired within four years of the start of the respective service agreement, but no earlier than January 1, 2024, and must be held for a period of at least two years after the end of the respective service agreement. Existing shareholding requirements in connection with personal investments, such as from the MB LTIP 2020, remain unaffected. Shares acquired prior to the beginning of the relevant investment period or as part of an equity settlement under a long-term incentive plan are credited to the investment obligation. Changes in the value of the shares after their acquisition are not taken into account for purposes of the fulfillment of the investment obligation. Further details on this can be found in the section “Share Ownership Guidelines and Shareholdings.”
9
New performance targets for the long-term variable compensation
The introduction of a capital markets target for the Long-Term Incentive addresses investor-specific requirements for the inclusion of a relative performance measurement in comparison to relevant competitors and ties the compensation of the Management Board to the long-term capital market performance of Fresenius Medical Care. In line with current national and international market practice, the total shareholder return (“TSR”) compared to competitors (“Relative TSR”) is used as the capital market target. The target achievement of the Relative TSR is determined based on the percentile ranking of the TSR performance of the Company in comparison to the TSR performance of companies in one or more comparison groups determined by the Supervisory Board. In general, STOXX® Europe 600 Health Care and S&P 500 Health Care indices are determined as comparison groups.
The introduction of a non-financial, sustainability-related performance target for the Long-Term Incentive in addition to the non-financial, sustainability-related performance target for the Short-Term Incentive is derived from the Company’s commitment toward maintaining a responsible corporate culture and attaining strategic sustainability targets, which also takes into account the requirements of the Company’s shareholders and further stakeholders. Sustainability is an essential and integral part of the corporate strategy of Fresenius Medical Care. By considering key objectives in the areas of Environment, Social and Governance (ESG) in the context of Long-Term Incentives, also investor-specific and social requirements are met and the long-term, sustainable development of Fresenius Medical Care is promoted. For the allocation of the Long-Term Incentive for the Fiscal Year, the reduction in market-based CO2e emissions, for which more detailed information can be found in the company’s sustainability statement, was defined as the sustainability target. [ESRS 2, 29c]
Compensation Governance for Management Board members
Compensation for the members of the Management Board is granted on the basis of the respective compensation system, which was submitted by the Supervisory Board to the general meeting for approval. The Supervisory Board is responsible for determining the compensation of the members of the Management Board. The Supervisory Board is supported in this by the Compensation Committee formed from among its members, which prepares the resolutions of the Supervisory Board. In the Fiscal Year, the Compensation Committee comprised Ms. Pascale Witz (Chairwoman) and Mr. Shervin J. Korangy as well as, since March 14, 2024, Dr. Manuela Stauss-Grabo (Deputy Chairwoman) and Ms. Regina Karsch.
Compensation systems applying to compensation
The compensation of the Management Board members for the Fiscal Year was determined in accordance with the Compensation System 2024+, which was approved by the Company’s AGM on May 16, 2024 with a majority of around 87.58% of the votes cast and implemented in the service agreements of the members of the Management Board. [ESRS 2, 29e]
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Compensation components allocated before the Fiscal Year generally continue to be subject to the applicable underlying compensation system. This in particular concerns allocations of long-term variable compensation made in previous years under the Compensation System 2020+. Further information on this can be found in the section “Overview of outstanding share-based compensation components” and in the section “Temporal profile of the share-based compensation components.” There are no outstanding variable, performance-based compensation components from the period before the Compensation System 2020+.
The compensation components awarded and due in the Fiscal Year are in accordance with the respective compensation systems.
Details of the Compensation System 2024+ and the Compensation System 2020+ are available on the Company’s website at www.freseniusmedicalcare.com/en/about-us/management-board/compensation/. The main elements of the Compensation System 2024+ are set out in this Compensation Report in the section “Components of the Compensation System 2024+.” The main elements of the Compensation System 2020+ are set out in the Compensation Reports for the fiscal years 2023, 2022 and 2021. They are also set out in this Compensation Report insofar as they are relevant to compensation awarded or due in the Fiscal Year.
The Compensation System 2024+ and the Compensation System 2020+ as well as the compensation awarded or due in the Fiscal Year are in each case in accordance with the relevant recommendations of the GCGC in the version dated April 28, 2022.
11
Compensation structure (target compensation)
Under the Compensation System 2024+, the Supervisory Board determines the target amount for short-term variable compensation for each fiscal year and the allocation amount for each allocation of long-term variable compensation. The target amount or the allocation amount is the amount that is earned if the target achievement is 100%. The target amount for the short-term variable compensation can be set within a range of 100% (multiplier of 1) to 125% (multiplier of 1.25) of the relevant base salary of the respective member of the Management Board and in general amounts to 105% (multiplier of 1.05). The allocation amount for the long-term variable compensation of the Chairperson of the Management Board can be set within a range of 105% (multiplier of 1.05) to 200% (multiplier of 2) and for the other Management Board members can be set within a range of 105% (multiplier of 1.05) to 150% (multiplier of 1.5) of the relevant base salary and in general amounts to 135% (multiplier of 1.35). The multiplier is determined at the beginning of each performance period. The allocation amount for the long-term variable compensation must exceed the target amount of the short-term variable compensation.
For the Fiscal Year, the Supervisory Board applied a multiplier of 1.05 for the short-term variable compensation and a multiplier of 1.35 for the allocation amount for the long-term variable compensation for all members of the Management Board. This corresponds to the multipliers that were to be applied under the Compensation System 2020+. The compensation structure of the target total direct compensation for the Fiscal Year therefore consists of 29% base salary, 31% short-term incentive and 40% long-term incentive.
Owing to a 71% share of performance-based variable compensation components in the target total direct compensation, the compensation of the Management Board is, as a whole, performance-based. Owing to a 40% long-term incentive share (i.e., 56% of performance-based variable compensation components) in the target total direct compensation, the compensation of the Management Board is geared to promoting sustainable and long-term corporate development.
Information on the relative shares of the fixed and the variable compensation components in the compensation granted in the Fiscal Year can be found in the tables in the sections “Compensation tables for the Management Board members in office in the Fiscal Year” and “Former Management Board members’ compensation”, respectively.
12
Compensation reviews
The value of the total target compensation of each Management Board member is determined by the Supervisory Board in line with the Compensation System 2024+. In compliance with the requirements of the German Stock Corporation Act and the recommendations of the GCGC, it is ensured that compensation is commensurate with the duties and performance of each Management Board member and the Company’s situation, is geared toward the long-term, sustainable development of Fresenius Medical Care and does not exceed customary compensation without any special justification. To this end, both external and internal compensation comparisons are conducted. As a result, the respective total compensation may differ among the Management Board members, diligently considering the respective Management Board member’s function and responsibilities as well as differences in international pay practices. The total compensation for the individual Management Board members takes into account the interests of the Company in retaining Management Board members and attracting qualified candidates for the Management Board.
Horizontal comparison (peer group)
In order to assess the appropriateness of the Compensation System 2024+ and the individual compensation of the Management Board members, the Supervisory Board conducts a horizontal review of compensation amounts and structures (external comparison). The horizontal comparison is made at a national level with other companies from the most relevant German benchmark index in which the Company is listed (since December 27, 2024, DAX, until then in the Fiscal Year MDAX) and at an international level with companies operating in a similar sector and having a similar size.
For the Fiscal Year, the MDAX companies as of December 31, 2023 and – depending on the specific tasks of the relevant member of the Management Board – the following companies were used as international peer group: Baxter International Inc., Becton, Dickinson and Company, Boston Scientific Corporation, Cigna Corporation, Coloplast A/S, CVS Health Corporation, DaVita Inc., Encompass Health Corporation, Koninklijke Philips N.V., Medtronic plc, Merck KGaA, Sartorius AG, Siemens Healthineers AG, and Smith & Nephew plc. In addition, the DAX companies as of December 31, 2023 were also used. The changes in the composition of the international peer group compared to the previous year serve to better reflect the global orientation of Fresenius Medical Care and also to include relevant European companies of a similar size in the comparison.
Vertical comparison (intra-company)
The Supervisory Board also takes into account a vertical review of the compensation levels of Fresenius Medical Care’s employees when determining the compensation system and the compensation of the Management Board members (internal comparison). The compensation of the Management Board members and of the members of the upper management of Fresenius Medical Care (currently Management Level 8 or higher) as well as of the global staff (generally all employees with the exception of Fresenius Medical Care’s upper management) is set in relation. When conducting the vertical review, the Supervisory Board in accordance with recommendation G.4 of the GCGC also takes into account the development of compensation levels over time.
13
Result of the review of the appropriateness of the compensation
On the basis of the compensation reviews it carried out in the Fiscal Year, the Supervisory Board came to the conclusion that the compensation of the Management Board is appropriate in terms of both its structure and amount.
Caps and maximum compensation
The Management Board members’ total compensation is limited by a cap applicable to each variable compensation component and by maximum compensation.
For the Short-Term Incentive, the target achievement and payout are capped at 150% of the relevant target amount. For the Long-Term Incentive, the target achievement is capped at 200% for each allocation. In addition, the amounts received from each allocation of the Long-Term Incentive – irrespective of whether they are paid out in cash or, as provided for alternatively under the Compensation System 2024+, settled in shares of the Company – are capped at 400% of the allocation amount. Since the amount payable in cash or to be settled in shares also depends on the development of the Company’s share price, the opportunity of benefiting from the share price development in the relevant vesting period thus also is limited. The Supervisory Board has further agreed a cap option for the variable compensation components in the event that extraordinary developments occur. In the Fiscal Year, there was no reason for the Supervisory Board to make use of this cap option.
In addition, there is a maximum amount of total compensation for each member of the Management Board (maximum compensation). The maximum compensation limits the benefits that a member of the Management Board can receive as compensation for a fiscal year, irrespective of when the actual payment accrues. The maximum compensation includes the base salary for the fiscal year (paid out during the fiscal year), the Short-Term Incentive for the fiscal year (paid out in the following fiscal year) and the Long-Term Incentive for the fiscal year (paid out in later fiscal years) and all fringe benefits, sign-on bonuses and other compensation for the relevant fiscal year such as a pension allowance for the relevant fiscal year (paid out in general during the fiscal year). Any pension service costs incurred in a fiscal year in line with a pension commitment being part of the fixed compensation components are also included in the calculation of the maximum compensation. A Management Board member’s maximum compensation may be lower than the sum of the potentially achievable payouts from the individual compensation components determined or allocated for a fiscal year.
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The caps and maximum compensation are shown in the following diagram:
The maximum compensation for a fiscal year is determined based on the currency of the base salary as specified in the relevant Management Board member’s service agreement. Under the Compensation System 2024+ and the allocation of responsibilities on which it is based, and in accordance with the respective service agreement, it amounts to €12,000 THOUS or $12,975 THOUS for the Chairperson of the Management Board (CEO), €9,500 THOUS or $10,272 THOUS for the Management Board member responsible for the Care Delivery operating segment (under the Compensation System 2020+ until the reorganization of the allocation of responsibilities to realign the Company’s operating model: Management Board member responsible for the North America region), and €7,000 THOUS or $7,569 THOUS for any other Management Board function. The aforementioned amounts in euro for the maximum compensation are identical to those under the Compensation System 2020+. The aforementioned U.S. dollar amounts were based on an updated exchange rate compared to the Compensation System 2020+.
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Amount of the maximum compensation under the Compensation System 2024+
in THOUS
| Function | Contractually agreed maximum compensation | |||||
| Helen Giza | Chairwoman and Chief Executive Officer | $ | 12,975 | |||
| Craig Cordola, Ed.D. | Chief Executive Officer for Care Delivery | $ | 10,272 | |||
| Martin Fischer | Chief Financial Officer | € | 7,000 | |||
| Dr. Jörg Häring | Legal, Compliance and Human Resources | € | 7,000 | |||
| Franklin W. Maddux, M.D. | Global Chief Medical Officer | $ | 7,569 | |||
| Dr. Katarzyna Mazur-Hofsäß | Chief Executive Officer for Care Enablement | € | 7,000 | |||
Information on compliance with the maximum compensation can be found in the section “Compliance with maximum compensation (Allocations 2021).”
Malus and clawback
The Supervisory Board is entitled to withhold or reclaim variable compensation components in cases of a Management Board member’s misconduct or non-compliance with his or her duties or internal Company guidelines, considering the characteristics of the individual case. Within this framework, the Supervisory Board ensures that contractual provisions are in place determining detailed requirements for withholding or reclaiming variable compensation components and setting forth the consequences thereof, including the forfeiture, in full or in part, of all or some variable compensation components. Also, the Supervisory Board has adopted a policy that in accordance with applicable regulatory requirements provides that the Company may recover excess incentive-based compensation if it is required to prepare an accounting restatement due to material noncompliance with relevant financial reporting requirements under U.S. federal securities laws.
In the Fiscal Year, there was no reason for the Supervisory Board to make use of these authorizations.
Management Board members’ compensation
The compensation awarded or due in the Fiscal Year to the Management Board members in office in the Fiscal Year will be described in more detail below. Tables showing their respective total compensation are set out in the section “Compensation tables for the Management Board members in office in the Fiscal Year.” Information on the compensation for former Management Board members are set out in the section “Former Management Board members’ compensation.”
Compensation awarded and due to the members of the Management Board in the Fiscal Year consisted of fixed and variable components:
| – | fixed compensation, consisting of a base salary, fringe benefits and, if applicable, a pension allowance in cash, |
| – | one-year variable compensation (Short-Term Incentive) and |
| – | multi-year variable compensation (Long-Term Incentive), consisting of payments under share-based cash-settled compensation allocated in previous years. |
Fixed compensation components
Management Board members receive a base salary and fringe benefits as well as a pension allowance or a pension commitment as fixed compensation components. The pension commitment does not, however, constitute compensation in the meaning of Section 162 paragraph 1 AktG.
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The amount of the base salary is set out in the individual service agreements of the members of the Management Board. In line with standard local practice, the base salary is generally paid in twelve monthly installments for members of the Management Board resident in Germany and in biweekly installments for members of the Management Board resident in the U.S.
In the Fiscal Year, the fringe benefits awarded or due to the Management Board members under their individual service agreements consisted mainly of the private use of company cars, the payment of a mobility allowance or the use of rental cars, housing, rent and relocation payments, reimbursement of fees for the preparation of tax returns, reimbursement of charges, contributions to pension schemes (other than the pension commitments or the cash pension allowance set out herein), contributions to accident, life and health insurances or other insurances as well as tax equalization compensation due to varying tax rates applicable in Germany and the country in which the relevant Management Board member is personally taxable. See the section “Further information” for details of such tax equalization compensation.
In addition, individual Management Board members received a pension allowance in cash amounting to 40% of their base salary for their own pension provision. For individual other Management Board members, pension commitments exist. Payments to the Management Board members under pension commitments will generally only become due when the covered event occurs. The pension allowance and the pension commitments are set out in the section “Pension-related obligations.”
Short-Term Incentive – MBBP 2024+
Under the Compensation System 2024+, the Management Board members are entitled to receive a Short-Term Incentive in accordance with the Management Board Bonus Plan 2024+ (MBBP 2024+), which may result in a cash payment. The Short-Term Incentive rewards the Management Board members for the Company’s performance in the relevant fiscal year. The Short-Term Incentive is linked to the achievement of three financial targets and one non-financial, sustainability-related performance target.
The target Short-Term Incentive amount for the Fiscal Year (which is paid out at a target achievement level of 100%) equaled 105% (multiplier of 1.05) of the relevant base salary of the respective Management Board member.
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Functioning
The functioning of the MBBP 2024+ is shown in the following diagram:
The Short-Term Incentive is measured based on the achievement of four performance targets: 20% relate to revenue, 40% to operating income, 20% to net income and 20% to the achievement of a measurable sustainability target, which can also consist of various sub-targets.
The Supervisory Board defines for each performance target the specific target values that lead to a target achievement of 0% (lower threshold), 100% and 150% (cap). The Supervisory Board may also set additional target values leading to a target achievement of between 0% and 150%. The following applies to each performance target: If the lower threshold of a target value is not exceeded, the target achievement is 0%. If the upper target value is reached or exceeded, the target achievement is 150%. Target achievement in the range between two adjacent target values is generally determined by linear interpolation.
The Short-Term Incentive is paid out in the year following the year of target achievement.
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Link to strategy
The financial performance targets (revenue, operating income, net income) reflect key operating figures of the Company and support Fresenius Medical Care’s strategy of achieving sustainable and profitable growth. The non-financial, sustainability-related performance target underlines Fresenius Medical Care’s commitment to implement its global sustainability targets.
The respective weighting of the individual performance targets for the Short-Term Incentive and their link to Fresenius Medical Care’s strategy are shown in the following diagram:
Financial performance targets
The underlying financial figures of the financial performance targets for the Short-Term Incentive are at constant currency and may be adjusted for certain effects to ensure comparability of the financial figures with respect to the operational performance, e.g., effects from certain acquisitions and divestments or effects from changes in IFRS accounting standards.
In order to further enhance collaboration across the operating segments and at the same time incentivize the Management Board members with respect to their individual responsibilities, some performance targets are measured at group level whereas others are measured at the level of the area of responsibility of the individual Management Board member. The financial performance targets “revenue” and “operating income” are in principle measured at group level. For the Management Board members with responsibility for the Care Delivery and Care Enablement operating segments, these performance targets are measured at the level of the segment for which they are responsible. The net income target for all Management Board members is measured at group level. By measuring certain performance targets at group level as well as at the level of the operating segments, the financial performance of both the group and that of the relevant operating segments is reflected.
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The target values applied to the financial performance targets in the Fiscal Year for the Short-Term Incentive and their achievement are set out in the table below.
Short-Term Incentive – Target values and target achievement in the Fiscal Year (financial performance targets)
| Target values (1) | Actual values | Target achievement | ||||||||||||||||||||||||||||||
| 0% | 30% | 100% | 150% | As reported | Adjustments (2) | According to plan terms | ||||||||||||||||||||||||||
| in € M | in € M | in € M | in € M | in € M | in € M | in € M | in % | |||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||
| Group | ≤ 17,597 | = 18,575 | = 19,553 | ≥ 20,530 | 19,336 | (182 | ) | 19,154 | 71.45 | |||||||||||||||||||||||
| Care Delivery | ≤ 13,893 | = 14,665 | = 15,436 | ≥ 16,208 | 15,275 | (191 | ) | 15,084 | 68.08 | |||||||||||||||||||||||
| Care Enablement | ≤ 5,033 | = 5,312 | = 5,592 | ≥ 5,871 | 5,557 | (13 | ) | 5,544 | 88.09 | |||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||||||||
| Group | ≤ 1,404 | = 1,652 | ≥ 1,900 | 1,392 | 272 | 1,664 | 102.49 | |||||||||||||||||||||||||
| Care Delivery | ≤ 1,266 | = 1,490 | ≥ 1,713 | 1,190 | 273 | 1,463 | 88.20 | |||||||||||||||||||||||||
| Care Enablement | ≤ 185 | = 218 | ≥ 250 | 267 | (3 | ) | 264 | 150.00 | ||||||||||||||||||||||||
| Net income | ≤ 616 | = 725 | ≥ 834 | 538 | 277 | 815 | 141.53 | |||||||||||||||||||||||||
| (1) | According to the plan terms, the financial figures underlying the target values had to be adjusted by effects resulting from strategic portfolio divestments. The target values shown here already include these adjustments. |
| (2) | According to the plan terms, the financial figures underlying the target achievement were translated at the exchange rates that were applied for the determination of the target values to ensure comparability. In addition, they were adjusted according to the plan terms for one-time effects in connection with strategic portfolio divestments to the extent these effects deviate from the one-time effects included in the target values. |
Sustainability target
The sustainability target relates to strategic focus areas of Fresenius Medical Care in the areas of Environment, Social and Governance (ESG). The sustainability target is defined by the Supervisory Board for each fiscal year and can also consist of various sub-targets. The sustainability target is measured at group level for all Management Board members in order to ensure close collaboration among them in the context of the Company’s sustainability efforts.
For the Fiscal Year, the Supervisory Board defined two equally weighted sub-targets as sustainability target for the Short-Term Incentive: Patient Satisfaction and Employee Satisfaction. Both sub-targets have already been used for the sustainability target for 2023. These sub-targets are in line with the topics of quality of care and employee engagement relevant to Fresenius Medical Care, which emerged from the company’s last materiality analysis in 2023. In order to determine the target achievement, the values reported in the company’s sustainability statement for the Fiscal Year were used for each sub-target. The company’s sustainability statement for the Fiscal Year was reviewed by the auditor with limited assurance. [ESRS 2, 29b,d]
Patient Satisfaction was determined using the Net Promoter Score (NPS). The NPS is a strategically relevant measure of patient satisfaction with the company’s services, measured as the patient’s likelihood to recommend Fresenius Medical Care to others for dialysis treatment. The NPS is determined on the basis of patient surveys conducted as part of Fresenius Medical Care’s global Patient Experience Program. Fresenius Medical Care has set itself the target of achieving an NPS value of at least 70 every year. This corresponds to a target achievement for the sustainability sub-target “Patient Satisfaction” of 100% for the Fiscal Year. The NPS is calculated in integers.
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The target achievement for the sustainability sub-target “Patient Satisfaction” was 120.00%.
Short-Term Incentive – Sustainability sub-target Patient Satisfaction
| Target values | Target achievement | ||||||||||||||||||||||
| 0% | 50% | 75% | 100% | 110% | 120% | 130% | 140% | 150% | Absolute | Relative | |||||||||||||
| in points | in points | in points | in points | in points | in points | in points | in points | in points | in points | in % | |||||||||||||
| Net Promoter Score | ≤ 50 | = 58 | = 65 | = 70 | = 71 | = 72 | = 73 | = 74 | ≥ 75 | 72 | 120.00 | ||||||||||||
The sustainability sub-target “Employee Satisfaction” is another strategically relevant indicator and was measured using the Employee Engagement Score (EES). As part of a group-wide survey, the company evaluated employee feedback on positive aspects of the working environment as well as opportunities for improvement. The company determined the EES by asking employees to indicate the extent to which they agree that they a) tell others great things about working at Fresenius Medical Care, b) rarely think about leaving Fresenius Medical Care, and c) are inspired to do their best work every day. Employees responded on a scale from one (I strongly disagree) to six (I strongly agree). Based on the average score across all three items, employees were categorized as engaged or not engaged. The EES is the proportion of all employees categorized as “engaged” based on this methodology.
The target achievement for the sustainability sub-target “Employee Satisfaction” was 100.00%.
Short-Term Incentive – Sustainability sub-target Employee Satisfaction
| Target values | Target achievement | |||||||||||||||||||||||
| 0% | 50% | 100% | 150% | Absolute | Relative | |||||||||||||||||||
| in % | in % | in % | in % | in % | in % | |||||||||||||||||||
| Employee Engagement Score | ≤ 50 | = 52 | = 56 | ≥ 63 | 56 | 100.00 | ||||||||||||||||||
The overall target achievement for the sustainability target was 110.00%. The target achievement for the sustainability target and the individual, equally weighted sustainability sub-targets are shown in the following table:
Short-Term Incentive – Sustainability target achievement in the Fiscal Year
in %
| Target achievement per sustainability sub-target | Sustainability target achievement | |||||||
| Patient Satisfaction (50%) | Employee Satisfaction (50%) | |||||||
| 120.00 | 100.00 | 110.00 | ||||||
Overall target achievement
The degree of the overall target achievement for the Short-Term Incentive is determined based on the weighted arithmetic mean of the target achievement level of each performance target. Multiplying the degree of the respective overall target achievement with the target Short-Term Incentive amount results in the final Short-Term Incentive amount. After the corresponding resolution of the Supervisory Board, the final Short-Term Incentive amount is paid to the respective Management Board member in cash. Since the overall target achievement is capped at 150%, the final Short-Term Incentive amount is also capped at 150% of the respective target Short-Term Incentive amount.
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The following table shows the target achievement per performance target as well as the overall target achievement for the Fiscal Year:
Short-Term Incentive – Overall target achievement in the Fiscal Year
in %
| Target achievement (weighting) | Overall target achievement | |||||||||||||||||||
| Revenue (20%) | Operating income (40%) | Net income (20%) | Sustainability target (20%) | |||||||||||||||||
| Helen Giza | 71.45 | 102.49 | 141.53 | 110.00 | 105.59 | |||||||||||||||
| Craig Cordola, Ed.D. | 68.08 | 88.20 | 141.53 | 110.00 | 99.20 | |||||||||||||||
| Martin Fischer | 71.45 | 102.49 | 141.53 | 110.00 | 105.59 | |||||||||||||||
| Dr. Jörg Häring | 71.45 | 102.49 | 141.53 | 110.00 | 105.59 | |||||||||||||||
| Franklin W. Maddux, M.D. | 71.45 | 102.49 | 141.53 | 110.00 | 105.59 | |||||||||||||||
| Dr. Katarzyna Mazur-Hofsäß | 88.09 | 150.00 | 141.53 | 110.00 | 127.92 | |||||||||||||||
The amounts to be paid out to the individual Management Board members in 2025 on the basis of this overall target achievement for the Fiscal Year, taking into account the target amount (base salary times the multiplier) and in compliance with the cap, can be found in the following table:
Short-Term Incentive – Amounts to be paid in 2025 for the performance in the Fiscal Year
in € THOUS
| Base salary | Multiplier | Target amount | Cap (150%) | Overall target achievement in % | Payout amount | |||||||||||||||||||
| Helen Giza (1) | 1,663 | 1.05 | 1,746 | 2,619 | 105.59 | 1,844 | ||||||||||||||||||
| Craig Cordola, Ed.D. (1) | 1,340 | 1.05 | 1,407 | 2,111 | 99.20 | 1,395 | ||||||||||||||||||
| Martin Fischer | 800 | 1.05 | 840 | 1,260 | 105.59 | 887 | ||||||||||||||||||
| Dr. Jörg Häring (2) | 408 | 1.05 | 428 | 642 | 105.59 | 453 | ||||||||||||||||||
| Franklin W. Maddux, M.D. (1) | 979 | 1.05 | 1,028 | 1,542 | 105.59 | 1,086 | ||||||||||||||||||
| Dr. Katarzyna Mazur-Hofsäß | 1,064 | 1.05 | 1,117 | 1,676 | 127.92 | 1,429 | ||||||||||||||||||
| (1) | Note for the amounts as set out herein that the compensation benefits for Ms. Helen Giza as well as Messrs. Craig Cordola, Ed.D. and Franklin W. Maddux, M.D. are denominated in U.S. dollars and that the amounts are subject to currency fluctuations. The translation of U.S. dollar amounts was done at the average exchange rate for the applicable calendar year. |
| (2) | Dr. Jörg Häring was appointed as a member of the Management Board as of June 1, 2024, and correspondingly receives the Short-Term Incentive for the Fiscal Year on a pro-rated basis. |
The corresponding information on the Short-Term Incentive paid out in the Fiscal Year for the performance in 2023 to Management Board members who served in 2023 was previously disclosed in the Compensation Report for the year 2023.
Long-Term Incentive – MB LTIP 2020
On the basis of the Compensation System 2020+, Performance Shares were allocated in previous years to the Management Board members in office at the time under the MB LTIP 2020 as a performance-based Long-Term Incentive. In the Fiscal Year, the compensation from the Performance Shares allocated for 2021 was earned.
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Performance Shares under the MB LTIP 2020 are non-equity, cash-settled virtual compensation instruments with a performance period of three years. Any amounts received from the Performance Shares are subject to the achievement of three equally weighted performance targets and further depend on the development of the stock exchange price of the shares of the Company.
The allocation amount for the Performance Shares equaled 135% (multiplier of 1.35) of the relevant base salary of the respective Management Board member. In order to determine the number of Performance Shares to be allocated to the relevant Management Board member, the relevant allocation amount was divided by the value per Performance Share determined in accordance with IFRS 2 and considering the average price of the Company’s shares over a period of 30 calendar days prior to each relevant allocation date. The number of Performance Shares to vest for each Management Board member depended on the achievement of the performance targets.
Functioning
The functioning of the MB LTIP 2020 is shown in the following diagram:
The Supervisory Board defined for each performance target the specific target values that lead to a target achievement of 0% (lower threshold), 100% and 200% (cap). The following applies to each performance target: If the lower target value is not exceeded, a target achievement of 0% applies. If the upper target value is reached or exceeded, a target achievement of 200% applies. If the actual financial figures range between the relevant target values applicable to a target achievement of 0% to 100% or 100% to 200%, the target achievement is determined by linear interpolation. At the end of the three-year performance period, the Supervisory Board determines the overall target achievement by taking the average of the target achievement levels for the three performance targets in the applicable three-year performance period. The three performance targets are equally weighted.
Based on the degree of the overall target achievement, the number of Performance Shares to vest is determined for each member of the Management Board. The number of Performance Shares may increase or decrease over the performance period. A total loss as well as (at most) doubling of the allocated Performance Shares in case of a target achievement of 200% (cap) is possible. After the final determination of the overall target achievement, the number of Performance Shares to vest is multiplied by the average price of the Company’s shares over the 30 calendar days preceding the relevant vesting date in order to calculate the corresponding amount received from the Performance Shares to vest. The total proceeds from the Performance Shares (the amount that can be earned under an allocation) are capped at 400% of the relevant allocation amount.
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The proceeds from the Performance Shares (after taxes and duties) are transferred to a bank, which uses them to purchase shares of the Company on the stock exchange. The shares acquired in this way are subject to a holding period of at least one year. In accordance with recommendation G.10 of the GCGC, the members of the Management Board can therefore only dispose of this Long-Term Incentive after a period of at least four years.
Link to strategy
The three performance targets revenue growth, net income growth and return on invested capital (ROIC) were selected because they provide effective incentives that the Company’s investments achieve a certain return and thus promote long-term, profitable growth and an attractive total return for shareholders. These performance targets form part of the Company’s primary key performance indicators or secondary financial performance indicators and support the execution of the Company’s long-term strategy.
The respective weighting of the individual performance targets for the Long-Term Incentive and their link to Fresenius Medical Care’s strategy are shown in the following diagram:
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Target values and target achievement (Allocation 2021)
In the Fiscal Year, the Long-Term Incentive from the allocation for 2021 was earned. The performance targets for the 2021, 2022 and 2023 performance periods were decisive for target achievement. The annual target values and target achievement are shown in the following table:
Long-Term Incentive – Target values and target achievement for the Allocation 2021 under the MB LTIP 2020
| Target values | Actual values | Target achievement | ||||||||||||||||||||||||||||||
| 0% | 100% | 200% | As reported | Currency translation adjustment |
At constant currency according to plan terms |
Per performance target |
Annual | |||||||||||||||||||||||||
| 2021 | ||||||||||||||||||||||||||||||||
| Revenue growth | ≤ 1 | % | = 6 | % | ≥ 11 | % | (1.3 | )% | 3.1 | % | 1.8 | % | 16 | % | ||||||||||||||||||
| Net income growth | ≤ 0 | % | = 5 | % | ≥ 10 | % | (16.8 | )% | 2.4 | % | (14.4 | )% | 0 | % | 5 | % | ||||||||||||||||
| Return on invested capital (ROIC) | ≤ 5.5 | % | = 6.0 | % | ≥ 6.5 | % | 4.9 | % | — | % | 4.9 | % | 0 | % | ||||||||||||||||||
| 2022 | ||||||||||||||||||||||||||||||||
| Revenue growth | ≤ 1 | % | = 6 | % | ≥ 11 | % | 10.1 | % | (8.0 | )% | 2.1 | % | 22 | % | ||||||||||||||||||
| Net income growth | ≤ 0 | % | = 5 | % | ≥ 10 | % | (30.5 | )% | (6.1 | )% | (36.6 | )% | 0 | % | 7 | % | ||||||||||||||||
| Return on invested capital (ROIC) | ≤ 5.5 | % | = 6.0 | % | ≥ 6.5 | % | 3.3 | % | — | % | 3.3 | % | 0 | % | ||||||||||||||||||
| 2023 | ||||||||||||||||||||||||||||||||
| Revenue growth | ≤ 1 | % | = 6 | % | ≥ 11 | % | 0.3 | % | 5.2 | % | 5.5 | % | 90 | % | ||||||||||||||||||
| Net income growth | ≤ 0 | % | = 5 | % | ≥ 10 | % | (25.9 | )% | 1.6 | % | (24.3 | )% | 0 | % | 30 | % | ||||||||||||||||
| Return on invested capital (ROIC) | ≤ 5.5 | % | = 6.0 | % | ≥ 6.5 | % | 2.8 | % | — | % | 2.8 | % | 0 | % | ||||||||||||||||||
| Overall Target Achievement | 14 | % | ||||||||||||||||||||||||||||||
Vested amounts (Allocation 2021)
The following table shows the amounts that vested in the Fiscal Year from the Allocation 2021 and were awarded within the meaning of Section 162 paragraph 1 sentence 1 AktG:
Long-Term Incentive – Vested amount from the Allocation 2021 of the MB LTIP 2020
| Fair Value at allocation | Number of allocated Performance Shares | Overall target achievement | Number of final Performance Shares | Share price at vesting | Vested amount | |||||||||||||||||||
| in € THOUS | in % | in € | in € THOUS | |||||||||||||||||||||
| Members of the Management Board in office in the Fiscal Year | ||||||||||||||||||||||||
| Helen Giza (1) | 1,138 | 20,941 | 14 | 2,932 | 36.79 | 121 | ||||||||||||||||||
| Franklin W. Maddux, M.D. (1) | 1,016 | 18,625 | 14 | 2,608 | 36.79 | 107 | ||||||||||||||||||
| Dr. Katarzyna Mazur-Hofsäß | 1,225 | 22,533 | 14 | 3,155 | 36.79 | 116 | ||||||||||||||||||
| Former members of the Management Board | ||||||||||||||||||||||||
| Rice Powell (1) | 2,231 | 40,894 | 14 | 5,725 | 36.79 | 236 | ||||||||||||||||||
| Dr. Olaf Schermeier | 1,105 | 20,328 | 14 | 2,846 | 36.79 | 105 | ||||||||||||||||||
| William Valle (1) | 1,723 | 31,582 | 14 | 4,421 | 36.79 | 182 | ||||||||||||||||||
| Kent Wanzek (1) | 1,033 | 18,929 | 14 | 2,650 | 36.79 | 109 | ||||||||||||||||||
| Harry de Wit | 1,012 | 18,614 | 14 | 2,606 | 36.79 | 96 | ||||||||||||||||||
| (1) | Note for the amounts set out that the compensation benefits for Ms. Helen Giza as well as for Messrs. Franklin W. Maddux M.D., Rice Powell, William Valle and Kent Wanzek are denominated in U.S. dollars and that the amounts are subject to currency fluctuations. The translation of U.S. dollar amounts for the Long-Term Incentive awarded in the Fiscal Year (vested amount) was done at the closing rate of the vesting date. |
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The amounts that vested in the Fiscal Year (after taxes and duties) were not paid out but in accordance with the plan terms transferred to a bank, which used them to purchase shares of the Company on the stock exchange. The shares acquired in this way are subject to a holding period of at least one year.
Compliance with maximum compensation (Allocations 2021)
In the Fiscal Year, compliance with the maximum compensation from allocations from 2021 could be conclusively assessed since the vesting period for the Long-Term Incentive allocated in 2021 under the MB LTIP 2020 ended and the amount earned in this respect was determined. The individual maximum compensation limits for the respective members of the Management Board for 2021 were in each case complied with. It was not necessary to reduce the payout amount of the Long-Term Incentive (as provided for in order to avoid exceeding the maximum compensation if necessary). The details are shown in the following table:
Compliance with the maximum compensation of the members of the Management Board then in office for 2021
in € THOUS
| Members of the Management Board in office in the Fiscal Year | ||||||||||||
| Helen Giza | Franklin W. Maddux, M.D. (1) | Dr. Katarzyna Mazur-Hofsäß | ||||||||||
| Base salary | 855 | 822 | 920 | |||||||||
| Fringe benefits | 214 | 171 | 60 | |||||||||
| Pension expense | — | — | 2,498 | (2) | ||||||||
| Total fixed components | 1,069 | 993 | 3,478 | |||||||||
| Short-Term Incentive | 712 | 684 | 892 | |||||||||
| Long-Term Incentive (MB LTIP 2020) | 121 | 104 | 116 | |||||||||
| Total variable components | 833 | 788 | 1,008 | |||||||||
| Total compensation for 2021 | 1,902 | 1,781 | 4,486 | |||||||||
| Cap Short-Term Incentive | 1,077 | 1,036 | 1,159 | |||||||||
| Cap Long-Term Incentive | 4,617 | 4,439 | 4,968 | |||||||||
| Maximum compensation | 7,000 | (3) | 7,000 | 7,000 | ||||||||
| in € THOUS | Former members of the Management Board | |||||||||||||||||||
| Rice Powell (1) | Dr. Olaf Schermeier | William Valle (1) | Kent Wanzek (1) | Harry de Wit | ||||||||||||||||
| Base salary | 1,804 | 830 | 1,394 | 835 | 760 | |||||||||||||||
| Fringe benefits | 333 | 88 | 256 | 167 | 331 | |||||||||||||||
| Pension expense | — | 282 | 1348 | 470 | 548 | |||||||||||||||
| Total fixed components | 2,137 | 1,200 | 2,998 | 1,472 | 1,639 | |||||||||||||||
| Short-Term Incentive | 1,502 | 691 | 1,075 | 695 | 779 | |||||||||||||||
| Long-Term Incentive (MB LTIP 2020) | 228 | 105 | 176 | 105 | 96 | |||||||||||||||
| Total variable components | 1,730 | 796 | 1,251 | 800 | 875 | |||||||||||||||
| Total compensation for 2021 | 3,867 | 1,996 | 4,249 | 2,272 | 2,514 | |||||||||||||||
| Cap Short-Term Incentive | 2,273 | 1,046 | 1,756 | 1,052 | 958 | |||||||||||||||
| Cap Long-Term Incentive | 9,742 | 4,482 | 7,528 | 4,509 | 4,104 | |||||||||||||||
| Maximum compensation | 12,000 | (4) | 7,000 | 9,500 | (5) | 7,000 | 7,000 | |||||||||||||
| (1) | The maximum compensation of Messrs. Franklin W. Maddux M.D., Rice Powell, William Valle and Kent Wanzek for 2021 is agreed in U.S. dollars. For the presentation in this table, the U.S. dollar amounts were translated with the exchange rate of €1/$1.11947 used when the maximum compensation in the Compensation System 2020+ was determined, which is why the amounts set out herein may deviate from the amounts set out in other tables of this Compensation Report or in tables of previous Compensation Reports. |
| (2) | The pension commitment was made in 2021. The pension expense set out herein includes the past service cost which relates to the service period rendered since the appointment as a member of the Management Board effective September 1, 2018. |
| (3) | In 2021, Ms. Helen Giza was Chief Financial Officer. Therefore, the maximum compensation amount applicable to the Chief Financial Officer applies to her maximum compensation for 2021. |
| (4) | In 2021, Mr. Rice Powell was Chairman of the Management Board. Therefore, the maximum compensation amount applicable to the Chairman of the Management Board applies to his maximum compensation for 2021. |
| (5) | In 2021, Mr. William Valle was the Management Board member responsible for the North America Region. Therefore, the maximum compensation amount applicable to the Management Board member responsible for the North America region under the Compensation System 2020+ applies to his maximum compensation for 2021. |
26
Compensation tables for the Management Board members in office in the Fiscal Year
The following tables show the individualized compensation awarded and due in the Fiscal Year to each Management Board member in office in the Fiscal Year. In addition, the pension expense incurred for the individual contractual pension commitments is disclosed. The tabular presentation is based on the model tables of the GCGC in its previous version dated February 7, 2017.
For the purposes of the following tables, compensation is deemed to have been “awarded in the fiscal year” if it has vested in the fiscal year. For this purpose, compensation is deemed to have vested in the year in which the underlying activity has been fully performed and the entitlement to payment of the compensation is no longer subject to any conditions precedent or conditions subsequent. For the Long-Term Incentives shown in this Compensation Report, this corresponds to the year in which they are paid out. The Long-Term Incentive earned under the MB LTIP 2020 is to be regarded as “awarded” irrespective of the fact that the amounts earned are to be invested in shares of the Company in accordance with the applicable plan terms.
Based on this understanding, the Short-Term Incentive is considered to have vested in the year, and is shown in the following tables for the respective years, in which the underlying activity was performed. This facilitates comparison of the performance of the members of the Management Board in a year with the performance of the Company in the same year and allows the Short-Term Incentive to be allocated on an accrual basis to the year in which the performance was performed. The columns for 2024 therefore contain the Short-Term Incentive for the Fiscal Year that will not be paid out until 2025, and the columns for 2023 contain the Short-Term Incentive for 2023 that was paid out in the Fiscal Year.
Insofar as members of the Management Board in office in the Fiscal Year have received payments as compensation for forfeited compensation benefits from a previous employment relationship, the corresponding amounts are reported under fringe benefits. Such payments were or are only made if the member of the Management Board has not resigned from office and the Company has not terminated such member’s service agreement and would not be entitled to terminate it when the payment becomes due.
27
Compensation of the members of the Management Board in office in the Fiscal Year
in € THOUS
| Helen Giza | Craig Cordola, Ed.D. | |||||||||||||||||||||||||||||||
| Chairwoman and Chief Executive Officer | Chief Executive Officer for Care Delivery | |||||||||||||||||||||||||||||||
| Member of the Management Board since November 1, 2019 | Member of the Management Board since January 1, 2024 | |||||||||||||||||||||||||||||||
| 2024 | 2023 (1) | 2024 | 2023 (1) | |||||||||||||||||||||||||||||
| Absolute | Ratio in % | Absolute | Ratio in % | Absolute | Ratio in % | Absolute | Ratio in % | |||||||||||||||||||||||||
| Base salary | 1,663 | 1,665 | (4) | 1,340 | ||||||||||||||||||||||||||||
| Fringe benefits | 80 | 23 | 447 | (4) | ||||||||||||||||||||||||||||
| Cash pension allowance | — | 536 | ||||||||||||||||||||||||||||||
| Total non-performance-based compensation | 1,743 | 47 | 1,688 | 39 | 2,323 | 62 | ||||||||||||||||||||||||||
| Short-Term Incentive | 1,844 | 50 | 2,017 | 47 | 1,395 | 38 | ||||||||||||||||||||||||||
| Long-Term Incentive | 121 | 3 | 599 | 14 | — | — | ||||||||||||||||||||||||||
| Allocation 2019 (Share Based Award (2)) | 32 | |||||||||||||||||||||||||||||||
| Allocation 2019 (MB LTIP 2019 (3)) | 180 | |||||||||||||||||||||||||||||||
| Allocation 2020 (MB LTIP 2020) | 387 | |||||||||||||||||||||||||||||||
| Allocation 2021 (MB LTIP 2020) | 121 | — | ||||||||||||||||||||||||||||||
| Total variable compensation | 1,965 | 2,616 | 1,395 | |||||||||||||||||||||||||||||
| Total compensation according to sec. 162 para. 1 sent. 2 no. 1 AktG | 3,708 | 4,304 | 3,718 | |||||||||||||||||||||||||||||
| Pension expense | 729 | 625 | — | |||||||||||||||||||||||||||||
| Total compensation including pension expense | 4,437 | 4,929 | 3,718 | |||||||||||||||||||||||||||||
| Martin Fischer | Dr. Jörg Häring | |||||||||||||||||||||||||||||||
| Chief Financial Officer | Legal, Compliance and Human Resources | |||||||||||||||||||||||||||||||
| Member of the Management Board since October 1, 2023 | Member of the Management Board since June 1, 2024 | |||||||||||||||||||||||||||||||
| 2024 | 2023 (1) | 2024 | 2023 (1) | |||||||||||||||||||||||||||||
| Absolute | Ratio in % | Absolute | Ratio in % | Absolute | Ratio in % | Absolute | Ratio in % | |||||||||||||||||||||||||
| Base salary | 800 | 200 | 408 | |||||||||||||||||||||||||||||
| Fringe benefits | 437 | (5) | 445 | (5) | 354 | (7) | ||||||||||||||||||||||||||
| Cash pension allowance | 400 | (6) | 163 | |||||||||||||||||||||||||||||
| Total non-performance-based compensation | 1,637 | 65 | 645 | 73 | 925 | 67 | ||||||||||||||||||||||||||
| Short-Term Incentive | 887 | 35 | 242 | 27 | 453 | 33 | ||||||||||||||||||||||||||
| Long-Term Incentive | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Allocation 2019 (Share Based Award (2)) | — | |||||||||||||||||||||||||||||||
| Allocation 2019 (MB LTIP 2019 (3)) | — | |||||||||||||||||||||||||||||||
| Allocation 2020 (MB LTIP 2020) | — | |||||||||||||||||||||||||||||||
| Allocation 2021 (MB LTIP 2020) | — | — | ||||||||||||||||||||||||||||||
| Total variable compensation | 887 | 242 | 453 | |||||||||||||||||||||||||||||
| Total compensation according to sec. 162 para. 1 sent. 2 no. 1 AktG | 2,524 | 887 | 1,378 | |||||||||||||||||||||||||||||
| Pension expense | — | — | — | |||||||||||||||||||||||||||||
| Total compensation including pension expense | 2,524 | 887 | 1,378 | |||||||||||||||||||||||||||||
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Compensation of the members of the Management Board in office in the Fiscal Year
| Franklin W. Maddux, M.D. | Dr. Katarzyna Mazur-Hofsäß | |||||||||||||||||||||||||||||||
| Global Chief Medical Officer | Chief Executive Officer for Care Enablement | |||||||||||||||||||||||||||||||
| Member of the Management Board since January 1, 2020 | Member of the Management Board since September 1, 2018 | |||||||||||||||||||||||||||||||
| 2024 | 2023 (1) | 2024 | 2023 (1) | |||||||||||||||||||||||||||||
| Absolute | Ratio in % | Absolute | Ratio in % | Absolute | Ratio in % | Absolute | Ratio in % | |||||||||||||||||||||||||
| Base salary | 979 | 980 | 1,064 | 1,064 | ||||||||||||||||||||||||||||
| Fringe benefits | 187 | 187 | 57 | 32 | ||||||||||||||||||||||||||||
| Cash pension allowance | — | — | ||||||||||||||||||||||||||||||
| Total non-performance-based compensation | 1,166 | 49 | 1,167 | 43 | 1,121 | 42 | 1,096 | 34 | ||||||||||||||||||||||||
| Short-Term Incentive | 1,086 | 46 | 1,188 | 44 | 1,429 | 54 | 1,289 | 40 | ||||||||||||||||||||||||
| Long-Term Incentive | 107 | 5 | 353 | 13 | 116 | 4 | 825 | 26 | ||||||||||||||||||||||||
| Allocation 2019 (Share Based Award (2)) | — | 227 | ||||||||||||||||||||||||||||||
| Allocation 2019 (MB LTIP 2019 (3)) | — | 226 | ||||||||||||||||||||||||||||||
| Allocation 2020 (MB LTIP 2020) | 353 | 372 | ||||||||||||||||||||||||||||||
| Allocation 2021 (MB LTIP 2020) | 107 | 116 | ||||||||||||||||||||||||||||||
| Total variable compensation | 1,193 | 1,541 | 1,545 | 2,114 | ||||||||||||||||||||||||||||
| Total compensation according to sec. 162 para. 1 sent. 2 no. 1 AktG | 2,359 | 2,708 | 2,666 | 3,210 | ||||||||||||||||||||||||||||
| Pension expense | 397 | 418 | 611 | 499 | ||||||||||||||||||||||||||||
| Total compensation including pension expense | 2,756 | 3,126 | 3,277 | 3,709 | ||||||||||||||||||||||||||||
| (1) | Note for purposes of comparison between the amounts indicated and those of the Fiscal Year that the compensation is subject to foreign exchange rate fluctuations depending on whether it is contractually denominated in euro (Mr. Martin Fischer, Dr. Jörg Häring and Dr. Katarzyna Mazur-Hofsäß) or U.S. dollars (Ms. Helen Giza, Craig Cordola, Ed.D. and Mr. Franklin W. Maddux, M.D.). The plan terms of the Share Based Award entitled to payments in euro. In principle, the translation of U.S. dollar amounts was done at the average exchange rate for the applicable calendar year. For the Long-Term Incentive the translation of U.S. dollar amounts was done at the closing rate of the applicable vesting date. |
| (2) | The Share Based Award was an amount of the variable compensation component that under the compensation systems applicable until December 31, 2019 was to be converted into virtual shares of the Company not backed by equity of the Company as an amount to be deferred. Further details can be found in previous Compensation Reports. |
| (3) | The Management Board Long Term Incentive Plan 2019 (MB LTIP 2019) was the predecessor plan to the MB LTIP 2020. Further details can be found in previous Compensation Reports. |
| (4) | The fringe benefits of Mr. Craig Cordola, Ed.D. reported for the Fiscal Year include a payment of $450 THOUS (€416 THOUS), which he received as compensation for forfeited compensation benefits from a previous employment relationship. As agreed, Mr. Cordola, Ed.D. invested 50% of the net amount of this compensation in shares of the Company. |
| (5) | The fringe benefits of Mr. Martin Fischer include a payment of €300 THOUS for each of the Fiscal Year and 2023, which he received as compensation for forfeited compensation benefits from a previous employment relationship. In 2025, Mr. Fischer can receive a further payment of up to €300 THOUS as compensation for forfeited compensation benefits from a previous employment relationship. |
| (6) | Since October 1, 2024, Mr. Martin Fischer has received the pension allowance described in this Compensation Report. The defined contribution pension commitment previously promised to Mr. Fischer in the event of the conclusion of a corresponding reinsurance policy was canceled in view of the new pension regulations under the Compensation System 2024+. The amount reported here also includes an amount of €320 THOUS (corresponding to 40% of his annual base salary), which Mr. Fischer received in the Fiscal Year as compensation for the insurance contributions that would otherwise have to be paid for the period from October 1, 2023 to September 30, 2024. |
| (7) | The fringe benefits of Dr. Jörg Häring reported for the Fiscal Year include a payment of €300 THOUS, which he received as compensation for forfeited compensation benefits from a previous employment relationship. |
Outstanding share-based compensation components
The following information concerns outstanding share-based compensation components. To the extent share-based compensation components are outstanding after the end of the Fiscal Year, these relate solely to allocations of Performance Shares under the MB LTIP 2020 and the MB LTIP 2024+.
MB LTIP 2024+ (Allocation in the Fiscal Year)
Under the Compensation System 2024+, the members of the Management Board were allocated Performance Shares as a long-term variable compensation component under the Management Board Long-Term Incentive Plan 2024+ (MB LTIP 2024+) in the Fiscal Year. The functioning of the MB LTIP 2024+ is shown in the following diagram:
29
As in previous years, return on invested capital (ROIC) has been set as the profitability target. The target achievement of the Relative TSR is determined based on the percentile ranking of the TSR performance of the Company in comparison to the TSR performance of the companies of the STOXX® Europe 600 Health Care and S&P 500 Health Care indices. The reduction in market-based CO2e emissions has been set as the sustainability target. This target is in line with the topic of climate protection relevant to Fresenius Medical Care, which emerged from the company’s last materiality analysis in 2023. Information on the target values and the respective performance target achievement will be disclosed after the end of the performance period in the Compensation Report for the relevant fiscal year.
The performance shares allocated in the Fiscal Year are paid out in cash after vesting. The allocation amount for the Performance Shares equaled 135% (multiplier of 1.35) of the relevant base salary of the respective Management Board member. The number of Performance Shares allocated in the Fiscal Year, which was determined taking into account the allocation amount (base salary times the multiplier) and the value per Performance Share on the allocation date, is shown in the following table:
Performance Shares allocated in the Fiscal Year under the MB LTIP 2024+
| Base salary | Multiplier | Allocation amount | Value per Performance Share at allocation (1) |
Number of Performance Shares |
Cap (400%) | |||||||||||||||||||
| in € THOUS | in € THOUS | in € | in € THOUS | |||||||||||||||||||||
| Helen Giza (2) | 1,663 | 1.35 | 2,245 | 31.54 | 71,358 | 8,980 | ||||||||||||||||||
| Craig Cordola, Ed.D. (2) | 1,340 | 1.35 | 1,809 | 31.54 | 57,483 | 7,236 | ||||||||||||||||||
| Martin Fischer | 800 | 1.35 | 1,080 | 31.54 | 34,242 | 4,320 | ||||||||||||||||||
| Dr. Jörg Häring (3) | 408 | 1.35 | 551 | 34.78 | 15,850 | 2,204 | ||||||||||||||||||
| Franklin W. Maddux, M.D. (2) | 979 | 1.35 | 1,322 | 31.54 | 42,022 | 5,288 | ||||||||||||||||||
| Dr. Katarzyna Mazur-Hofsäß | 1,064 | 1.35 | 1,436 | 31.54 | 45,542 | 5,744 | ||||||||||||||||||
| (1) | The value per Performance Share as set out herein and relevant for the number of Performance Shares to be allocated is determined according to the plan terms considering the average price of the Company’s shares over a period of 30 calendar days prior to the allocation date and assuming a 100% target achievement for the performance target “Relative TSR”, which is why it may deviate from the Fair Value according to IFRS 2. |
| (2) | Note for the amounts as set out herein that the compensation benefits for Ms. Helen Giza as well as Messrs. Craig Cordola, Ed.D. and Franklin W. Maddux, M.D. are denominated in U.S. dollars and that the amounts are subject to currency fluctuations. The translation of U.S. dollar amounts was done at the average exchange rate for the applicable calendar year. |
| (3) | Dr. Jörg Häring was appointed as a member of the Management Board as of June 1, 2024, and has therefore received a pro-rated allocation under the MB LTIP 2024+ in the Fiscal Year. The allocation for Dr. Häring was made as of June 1, 2024. The value per Performance Share at allocation therefore differs from that for the other Management Board members, for whom the allocation was made as of March 1, 2024. |
30
Overview of outstanding share-based compensation components
The status of the outstanding Performance Shares of the current and former members of the Management Board in the Fiscal Year and further information are shown in the following table:
Overview of outstanding Performance Shares allocated under the MB LTIP 2020 and under the MB LTIP 2024+
| Allocation date | Vesting date | Fair Value at allocation (1) | Number of allocated Performance Shares | Overall target achievement (if final) | Number
of Performance Shares as of December 31, 2024 | |||||||||||||||
| in € THOUS | in % | |||||||||||||||||||
| Members of the Management Board in office in the Fiscal Year | ||||||||||||||||||||
| Helen Giza | ||||||||||||||||||||
| Allocation 2022 | March 1, 2022 | March 1, 2025 | 1,688 | 32,279 | 6 | 1,937 | ||||||||||||||
| Allocation 2023 | March 1, 2023 | March 1, 2026 | 2,177 | 67,568 | 67,568 | |||||||||||||||
| Allocation 2024 | March 1, 2024 | March 1, 2028 | 2,182 | 71,358 | 71,358 | |||||||||||||||
| Total | 171,205 | 140,863 | ||||||||||||||||||
| Craig Cordola, Ed.D. | ||||||||||||||||||||
| Allocation 2024 | March 1, 2024 | March 1, 2028 | 1,758 | 57,483 | 57,483 | |||||||||||||||
| Total | 57,483 | 57,483 | ||||||||||||||||||
| Martin Fischer | ||||||||||||||||||||
| Allocation 2023 | October 1, 2023 | October 1, 2026 | 264 | 7,037 | 7,037 | |||||||||||||||
| Allocation 2024 | March 1, 2024 | March 1, 2028 | 1,049 | 34,242 | 34,242 | |||||||||||||||
| Total | 41,279 | 41,279 | ||||||||||||||||||
| Dr. Jörg Häring | ||||||||||||||||||||
| Allocation 2024 | June 1, 2024 | June 1, 2028 | 546 | 15,850 | 15,850 | |||||||||||||||
| Total | 15,850 | 15,850 | ||||||||||||||||||
| Franklin W. Maddux, M.D. | ||||||||||||||||||||
| Allocation 2022 | March 1, 2022 | March 1, 2025 | 1,110 | 20,974 | 6 | 1,258 | ||||||||||||||
| Allocation 2023 | March 1, 2023 | March 1, 2026 | 1,282 | 39,790 | 39,790 | |||||||||||||||
| Allocation 2024 | March 1, 2024 | March 1, 2028 | 1,285 | 42,022 | 42,022 | |||||||||||||||
| Total | 102,786 | 83,070 | ||||||||||||||||||
| Dr. Katarzyna Mazur-Hofsäß | ||||||||||||||||||||
| Allocation 2022 | March 1, 2022 | March 1, 2025 | 1,359 | 26,074 | 6 | 1,564 | ||||||||||||||
| Allocation 2023 | March 1, 2023 | March 1, 2026 | 1,375 | 42,852 | 42,852 | |||||||||||||||
| Allocation 2024 | March 1, 2024 | March 1, 2028 | 1,395 | 45,542 | 45,542 | |||||||||||||||
| Total | 114,468 | 89,958 | ||||||||||||||||||
| Former members of the Management Board | ||||||||||||||||||||
| Rice Powell | ||||||||||||||||||||
| Allocation 2022 | March 1, 2022 | March 1, 2025 | 2,425 | 45,841 | 6 | 2,750 | ||||||||||||||
| Total | 45,841 | 2,750 | ||||||||||||||||||
| William Valle | ||||||||||||||||||||
| Allocation 2022 | March 1, 2022 | March 1, 2025 | 1,888 | 35,678 | 6 | 2,141 | ||||||||||||||
| Allocation 2023 | March 1, 2023 | March 1, 2026 | 1,995 | 61,938 | 61,938 | |||||||||||||||
| Total | 97,616 | 64,079 | ||||||||||||||||||
| (1) | The IFRS 2 Fair Value in principle reflects all market conditions, including for the Allocation 2024 the current target achievement for the performance target “Relative TSR” on the respective allocation date. The amounts set out herein for the Allocation 2024 are based on a 100% target achievement for the performance target “Relative TSR” to avoid the allocation value being influenced by short-term volatility in the development of the Company’s Relative TSR and to enable comparability of the allocation value with those from previous years. |
31
Temporal profile of the share-based compensation components
The following diagram shows the temporal profile of the outstanding share-based compensation components. The temporal profile uses a simplified, schematic illustration of the allocations. The details can be found in the tables above and in the corresponding explanations.
Share Ownership Guidelines and Shareholdings
Under the formal Share Ownership Guidelines (SOG) introduced with the Compensation System 2024+, the members of the Management Board are generally obliged to invest a portion of their compensation in shares of the Company (SOG amount) within four years of the start of their respective service agreement, but no earlier than January 1, 2024, and to hold these shares for at least two years after the end of their respective service agreement. Further information on this can be found in the section “Introduction of Share Ownership Guidelines.”
The obligation to invest the amounts earned from allocations under the MB LTIP 2020 in accordance with the applicable plan terms in shares of the Company, which must be held for at least one year, remains unaffected. The amounts invested by the members of the Management Board in the Fiscal Year in this respect are shown in the section “Vested amounts (Allocation 2021).”
In addition, in 2021, the supervisory board of the General Partner responsible at the time decided that the Management Board members then in office – with their consent – would acquire shares on the Company on the stock exchange for a portion of their variable compensation and hold such shares for at least three years. Further information on this can be found in the Compensation Report for previous years.
Shares acquired prior to the beginning of the investment period relevant for the SOG or as part of an equity settlement under a long-term incentive plan are credited to the investment obligation. Changes in the value of the shares after their acquisition are not taken into account for purposes of the fulfillment of the investment obligation under the SOG.
The shareholdings notified to the Company as of the end of the Fiscal Year of the members of the Management Board in office in the Fiscal Year as well as the status of the fulfillment of the SOG are shown in the following table. The investment obligation under the SOG may be satisfied by acquisition of shares or American Depositary Shares (ADSs). For simplification purposes, the number of shares and ADSs have been combined in the following table. Where ADSs are held, two ADSs represent one share.
32
Overview on the SOG requirements and on the status
| SOG requirements | Status as of December 31, 2024 | |||||||||||||||||||||||||||
| Member
of the Management Board since | Annual
base salary | SOG
amount in % of base salary | SOG amount | To fulfill until | Amount invested (3) | Status
of fulfillment | Number
of shares | |||||||||||||||||||||
| in € THOUS | in % | in € THOUS | in TSD € | in % | ||||||||||||||||||||||||
| Helen Giza (1) | November 1, 2019 (2) | 1,663 | 200 | 3,326 | December 31, 2027 | 767 | 23 | 17,036 | ||||||||||||||||||||
| Craig Cordola, Ed.D. (1) | January 1, 2024 | 1,340 | 150 | 2,010 | December 31, 2027 | 1,379 | 69 | 39,448 | ||||||||||||||||||||
| Martin Fischer | October 1, 2023 | 800 | 150 | 1,200 | December 31, 2027 | — | — | — | ||||||||||||||||||||
| Dr. Jörg Häring | June 1, 2024 | 700 | 150 | 1,050 | May 31, 2028 (4) | — | — | — | ||||||||||||||||||||
| Franklin W. Maddux, M.D. (1) | January 1, 2020 | 979 | 150 | 1,469 | December 31, 2027 | 1,188 | 81 | 23,687 | ||||||||||||||||||||
| Dr. Katarzyna Mazur-Hofsäß | September 1, 2018 | 1,064 | 150 | 1,596 | December 31, 2027 | 553 | 35 | 12,928 | ||||||||||||||||||||
| (1) | The annual base salary and consequently also the SOG amount and the amount invested for Ms. Helen Giza and for Messrs. Craig Cordola, Ed.D. and Franklin W. Maddux, M.D is agreed in U.S. dollars. For the presentation in this table, the U.S. dollar amounts were translated with the average exchange rate of the calendar year. |
| (2) | Ms. Helen Giza is Chairwoman and Chief Executive Officer since December 6, 2022, for whom the increased SOG amount applies. |
| (3) | According to the SOG, the acquired shares are in principle credited with the amount invested. There is no revaluation on a specific reporting date or at current share prices. To the extent the acquisition is made in a currency other than that of the agreed base salary and consequently also of the SOG amount, the translation of the invested amounts is done at the exchange rate of the respective acquisition date. |
| (4) | Dr. Jörg Häring is member of the Management Board since June 1, 2024, which is why the time limit for investing the SOG amount deviates from the time limit for the other members of the Management Board. |
Other benefits and commitments
The following information concerns benefits and commitments to members of the Management Board within the meaning of Section 162 paragraph 2 AktG and related disclosures as, for instance, on the cash pension allowance.
Benefits from third parties
Unless otherwise stated in this Compensation Report, no benefits were awarded or promised to the members of the Management Board by a third party in the Fiscal Year with regard to their activities as members of the Management Board, and compensation awarded to members of the Management Board for management activities or supervisory board mandates in companies of the Company’s group is offset against the compensation of the respective member of the Management Board. If the Supervisory Board resolves that compensation awarded to members of the Management Board for supervisory board activities outside the Company's group shall be deducted in full or in part from the compensation of the respective member of the Management Board, this will be made transparent accordingly.
Pension-related obligations
The pension arrangements with the members of the Management Board and the changes to the corresponding commitments agreed in the Fiscal Year to implement the Compensation System 2024+ are presented below.
Cash pension allowance and defined contribution pension commitments
The members of the Management Board first appointed with effect from or after January 1, 2024, Mr. Craig Cordola, Ed.D. and Dr. Jörg Häring, as well as future members of the Management Board, have been or will be granted a cash pension payment allowance in the amount of 40% of their respective base salary in accordance with the Compensation System 2024+. The pension allowance is generally paid in the same cycle as the base salary.
33
In the Fiscal Year, it was agreed with the members of the Management Board Ms. Helen Giza and Mr. Franklin W. Maddux, M.D., each of whom has been granted a pension commitment within the framework of a defined contribution plan, and with Mr. Martin Fischer, who had been promised such a pension commitment in the event of the conclusion of a corresponding reinsurance policy, that the pension commitments would each be canceled and that they would instead be granted the aforementioned pension allowance with effect from the cancellation of the pension commitment. The cancellation of the pension commitment for Mr. Fischer took effect at the end of September 30, 2024. The termination of the pension commitments for Ms. Giza and Mr. Maddux, M.D. will each take effect in 2025. It was agreed with the aforementioned members of the Management Board that they would each receive a payment in the amount of the sum of the insurance contributions that have been paid (for Ms. Giza and Mr. Maddux, M.D.) or should have been paid (for Mr. Fischer, for whose pension commitment no reinsurance policy had until then been taken out) as compensation when the cancellation of the respective pension commitments takes effect. As the insurance contributions for the financing of the defined contribution plans and the pension allowance each correspond to 40% of the annual base salary, this change is neutral in terms of amount for the members of the Management Board.
For the defined contribution commitments that still exist after the end of the Fiscal Year, there is generally a waiting period for the granting of benefits during the first three years after the pension commitment has been made. Under the defined contribution plan, an annual insurance contribution amounting to 40% of the base salary, which determines the future benefit amount, is paid for the respective Management Board member retrospectively for the period from the appointment as a member of the Management Board. After reaching the relevant retirement age under the defined contribution plan, payments can be made either as a one-off payment or optionally in ten annual installments. An annuity payment is not provided. The defined contribution plan provides for survivors’ benefits (Hinterbliebenenversorgung) and benefits after the occurrence of a full or partial reduction in earning capacity (Erwerbsminderung). The implementation of the defined contribution plan is carried out in the form of external financing as a defined contribution plan with a reinsurance policy. The risks of death and occupational disability are covered already upon making of the pension commitment.
The insurance contributions in the Fiscal Year and the present value as of December 31 of the Fiscal Year are as follows:
Defined contribution pension commitments
| in € THOUS | ||||||||
| Insurance contribution 2024 | Present value as of December 31, 2024 | |||||||
| Helen Giza | 729 | 2,427 | ||||||
| Franklin W. Maddux, M.D. | 397 | 1,704 | ||||||
| Total: | 1,126 | 4,131 | ||||||
Defined benefit pension commitments
The Management Board member Dr. Katarzyna Mazur-Hofsäß and individual former Management Board members, each of whom were appointed to the Management Board before January 1, 2019, were each made an individual, performance-based (i.e., defined benefit) contractual pension commitment.
The defined benefit pension commitments each provide for a retirement pension and survivor benefits (Hinterbliebenenversorgung) as of the time of conclusively ending active work (at age 65 at the earliest) or upon occurrence of disability or incapacity to work (Berufs- oder Erwerbsunfähigkeit) or of a full or partial reduction in earning capacity (Erwerbsminderung), calculated by reference to the amount of the recipient’s most recent base salary.
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The retirement pension in principle amounts to 30% of the pensionable income. The aforementioned percentage increases by 1.5 percentage points for each full year of service, up to a maximum of 45%. The pensionable income is determined on the basis of the average base salary in the last five years before the occurrence of the insured event. Current retirement pensions increase according to statutory requirements (Section 16 of the German Act for the Improvement of Company Pension Plans (BetrAVG)). As a general rule, 30% of the gross amount of any post-retirement income from an activity of the Management Board member is to be offset against the pension.
If the Management Board member dies, the surviving spouse receives a pension amounting to 60% of the pension claim applicable at that time. Furthermore, the deceased Management Board member’s natural legitimate children (leibliche eheliche Kinder) receive an orphan’s pension amounting to 20% of the pension claim applicable at that time until they complete their education, but no longer than they reach 25 years of age. However, all orphans’ pensions and the surviving spouse’s pension, taken together, may not exceed 90% of the Management Board member’s pension claim.
If the Management Board member leaves the Management Board before reaching the age of 65, the rights to the aforementioned benefits survive. In such case, however, the pension to be paid is reduced – unless the Management Board member ceases to hold office because a covered event occurs (disability or incapacity to work, payment of a survivor’s pension in case of death or, if applicable, early retirement) – in proportion to the ratio of the actual years of service as a Management Board member to the potential years of service until reaching the age of 65.
According to IAS 19, the pension commitment for Dr. Katarzyna Mazur-Hofsäß has increased by €632 THOUS in the Fiscal Year and amounted to €3,660 THOUS on December 31, 2024 (December 31, 2023: €3,028 THOUS).
U.S.-based 401(k) Savings Plan
Based on individual contractual commitments, the Management Board members Ms. Helen Giza and Mr. Craig Cordola, Ed.D., additionally participated in the U.S.-based 401(k) Savings Plan in the Fiscal Year. In this context, an amount of $10,350 (€9,562) for Ms. Giza and an amount of $4,756 (€4,394) for Mr. Cordola, Ed.D., were earned in the Fiscal Year. This plan generally allows employees in the U.S. to invest a limited portion of their gross salaries in retirement pension programs. The company supports its employees at this with matching contributions of up to 50% of the annual payments.
Post-employment non-competition covenant
A post-employment non-competition covenant was agreed with each member of the Management Board. If such covenant becomes applicable, the member of the Management Board will receive, for a period of up to two years, non-compete compensation amounting to half of the respective annual base salary for each year the non-competition covenant is applied.
Change of control
The service agreements of the Management Board members contain no express provisions for the event of a change of control.
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Severance payment cap
The service agreements concluded with the Management Board members provide for a severance payment cap. Under this cap, payments in connection with the early termination of a Management Board activity may not exceed the value of two years’ compensation and may not compensate for more than the remaining term of the service agreement. To calculate the relevant annual compensation, only the fixed compensation components are applied. If the Company has terminated the service agreement for good cause or would be entitled to do so, no severance payments will be made.
Continued compensation in cases of sickness
All Management Board members have received individual contractual commitments to obtain continued compensation in cases of sickness for a maximum of twelve months; after six months of sick leave, insurance benefits may be offset against such payments. If a Management Board member dies, the surviving dependents will be paid three more monthly installments after the month of death, not to exceed, however, the amount due for the period until the scheduled expiration of the relevant service agreement.
Further information
Compensation of the U.S. members of the Management Board Ms. Helen Giza, Mr. Craig Cordola, Ed.D., and Mr. Franklin W. Maddux, M.D., was paid or taxed partly in the U.S. (in U.S. dollars) and partly in Germany (in euro). With respect to the amount paid in Germany, it was agreed with the aforementioned Management Board members that due to varying tax rates in both countries, the increased or lower tax burden to such members of the Management Board arising from German tax rates in comparison to U.S. tax rates will be balanced or will be paid back by them (net compensation). Pursuant to a modified net compensation agreement, these Management Board members will be treated as if they were taxed in the U.S. only. Since the actual tax burden can be calculated only in connection with the preparation of the Management Board members’ tax returns, subsequent adjustments may have to be made, which will then be retroactively covered in future Compensation Reports.
To the extent permitted by law, the Company undertook to indemnify the Management Board members from claims asserted against them arising out of their work for the Company and its affiliates, to the extent such claims exceed their liability under German law. To secure such obligations, a Directors & Officers liability insurance is in place having a deductible that corresponds to the specifications under German stock corporation law.
In accordance with applicable legal requirements, no loans or advance payments on future compensation components were awarded to members of the Management Board in the Fiscal Year.
Former Management Board members’ compensation
The compensation awarded or due to former members of the Management Board in the Fiscal Year is shown individually in the following table, unless the respective member of the Management Board left before the end of 2014. Members of the Management Board who left before the end of 2014 received pension payments totaling €583 THOUS in the Fiscal Year. Otherwise, no compensation was awarded or due to former members of the Management Board in the Fiscal Year.
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| Compensation of the former members of the Management Board | ||||||||||||||||||||||||
| in € THOUS | ||||||||||||||||||||||||
| Michael Brosnan (1) | Roberto Fusté | Dr. Carla Kriwet | ||||||||||||||||||||||
| Member of the Management Board until October 31, 2019 | Member of the Management Board until March 31, 2016 | Member of the Management Board until December 5, 2022 | ||||||||||||||||||||||
| Absolute | Ratio in % | Absolute | Ratio in % | Absolute | Ratio in % | |||||||||||||||||||
| Pension payments | 374 | 293 | — | |||||||||||||||||||||
| Fringe benefits | — | — | 297 | (2) | ||||||||||||||||||||
| Total non-performance-based compensation | 374 | 100 | 293 | 100 | 297 | 100 | ||||||||||||||||||
| Allocation 2021 (MB LTIP 2020) | — | — | — | |||||||||||||||||||||
| Total variable compensation | — | — | — | — | — | — | ||||||||||||||||||
| Total compensation according to sec. 162 para. 1 sent. 2 no. 1 AktG | 374 | 293 | 297 | |||||||||||||||||||||
| Ronald Kuerbitz (1) | Rice Powell (1) | Dr. Olaf Schermeier | ||||||||||||||||||||||
| Member of the Management Board until February 17, 2017 | Member of the Management Board until December 31, 2022 | Member of the Management Board until December 31, 2021 | ||||||||||||||||||||||
| Absolute | Ratio in % | Absolute | Ratio in % | Absolute | Ratio in % | |||||||||||||||||||
| Pension payments | 11 | 684 | — | |||||||||||||||||||||
| Fringe benefits | — | 10 | — | |||||||||||||||||||||
| Total non-performance-based compensation | 11 | 100 | 694 | 75 | — | — | ||||||||||||||||||
| Allocation 2021 (MB LTIP 2020) | — | 236 | 105 | |||||||||||||||||||||
| Total variable compensation | — | — | 236 | 25 | 105 | 100 | ||||||||||||||||||
| Total compensation according to sec. 162 para. 1 sent. 2 no. 1 AktG | 11 | 930 | 105 | |||||||||||||||||||||
| William Valle (1) | Kent Wanzek (1) | Harry de Wit | ||||||||||||||||||||||
| Member of the Management Board until December 31, 2023 | Member of the Management Board until December 31, 2021 | Member of the Management Board until December 31, 2021 | ||||||||||||||||||||||
| Absolute | Ratio in % | Absolute | Ratio in % | Absolute | Ratio in % | |||||||||||||||||||
| Pension payments | — | 273 | — | |||||||||||||||||||||
| Fringe benefits | — | — | — | |||||||||||||||||||||
| Total non-performance-based compensation | — | — | 273 | 71 | — | — | ||||||||||||||||||
| Allocation 2021 (MB LTIP 2020) | 182 | 109 | 96 | |||||||||||||||||||||
| Total variable compensation | 182 | 100 | 109 | 29 | 96 | 100 | ||||||||||||||||||
| Total compensation according to sec. 162 para. 1 sent. 2 no. 1 AktG | 182 | 382 | 96 | |||||||||||||||||||||
| (1) | Note for the amounts set out that the compensation benefits for Messrs. Michael Brosnan, Ronald Kuerbitz, Rice Powell, William Valle and Kent Wanzek are denominated in U.S. dollars. In principle, the translation of U.S. dollar amounts was done at the average exchange rate for the applicable calendar year. For the Long-Term Incentive the translation of U.S. dollar amounts was done at the closing rate of the applicable vesting date. |
| (2) | As already reported in the 2022 Compensation Report, an entitlement to payments of up to €1,300 THOUS for forfeited compensation benefits from a previous service relationship was agreed with Dr. Kriwet on conclusion of her service agreement, which could have become due in March 2024 and March 2025. With the payment of €285 set out herein all entitlements under this agreement have been settled. The fringe benefits reported here also include an amount of €12 THOUS attributable to the value of the use of a company car to which Dr. Kriwet was entitled as agreed, as already reported in the 2022 Compensation Report. |
For an explanation as to how the compensation components correspond to the relevant compensation system, as to how compensation promotes the long-term development of the Company, as to how the performance criteria were applied and as to how the compensation “awarded” in the Fiscal Year is defined, see the respective aforementioned statements regarding the compensation for the Management Board members in office in the Fiscal Year.
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Remuneration of the members of the Supervisory Board
The Supervisory Board advises and monitors the Management Board and is involved in the strategy and planning and in all matters of fundamental importance to the company. In view of these tasks, which carry a high degree of responsibility, the members of the Supervisory Board are intended to receive appropriate remuneration, which also takes sufficient account of the time required to hold the Supervisory Board office. In addition, Supervisory Board remuneration that is appropriate also with respect to the market environment ensures that the Company will continue to have qualified candidates for the Supervisory Board in the future. Appropriate remuneration of the Supervisory Board members thus contributes to the promotion of the business strategy and the long-term development of the Company.
The remuneration for the members of the Supervisory Board is granted on the basis of the Company’s Articles of Association. According to Article 14 of the Articles of Association, the members of the Supervisory Board receive fixed remuneration, fringe benefits (comprising the reimbursement of expenses and insurance coverage) and, if they serve on committees of the Supervisory Board, generally remuneration for these committee activities.
The fixed remuneration for service on the Supervisory Board or committees of the Supervisory Board is payable in four equal installments at the end of a calendar quarter. The members of the Supervisory Board do not receive variable remuneration; the remuneration awarded and due to them exclusively comprises fixed remuneration components.
If a fiscal year is not a complete calendar year, the remuneration relating to a full fiscal year is paid on a pro rata temporis basis. This generally applies accordingly if members of the Supervisory Board hold their office in the Supervisory Board or in a committee of the Supervisory Board or hold the office as chairperson or deputy chairperson only during a part of a full fiscal year.
The members of the Supervisory Board are reimbursed for the expenses incurred in the exercise of their office, including any statutory value-added tax owed by them. Furthermore, a Directors & Officers liability insurance in favor of the supervisory board members is in place, having a deductible corresponding to the specifications applying to management board members under German stock corporation law.
Changes to the remuneration in the Fiscal Year
The Company’s 2024 AGM resolved with a majority of around 99.49% of the votes cast to amend the corresponding provisions of the Articles of Association with effect from July 1, 2024. The remuneration of the members of the Supervisory Board was increased moderately overall in order to appropriately take into account the further increased demands regarding the responsibilities of the Supervisory Board and certain Supervisory Board committees as well as the corresponding increase in time expenditure, and to ensure that the Company remains competitive in the competition for highly qualified Supervisory Board candidates. The currency of the remuneration was changed from U.S. dollars to euro. The resolution of the Company’s 2024 AGM on the Supervisory Board members’ remuneration can be found on the Company’s website at www.freseniusmedicalcare.com/en/about-us/supervisory-board/remuneration.
The changes to the remuneration for serving on the Supervisory Board and its committees effective July 1, 2024 are as follows:
The fixed remuneration for each Supervisory Board member of previously $160 THOUS per year was changed to €170 THOUS per year. The additional remuneration for the chairperson and the deputy chairperson of the Supervisory Board was adjusted accordingly from $160 THOUS and $80 THOUS per year to €170 THOUS and €85 THOUS per year, respectively.
The members of the Audit Committee and the Presiding Committee instead of $40 THOUS per year receive €55 THOUS per year for their work in each of these committees. For serving as a member of the Compensation Committee and the Nomination Committee as well as any other committee only the currency of the remuneration was changed from U.S. dollars to euro; in this respect, instead of $40 THOUS per year, €40 THOUS per year are to be paid.
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The additional remuneration for the chairperson of the aforementioned Supervisory Board committees was adjusted accordingly from $40 THOUS per year to €55 THOUS per year for the respective chairperson of the Audit Committee or the Presiding Committee and to €40 THOUS per year for the respective chairperson of the Compensation Committee or the Nomination Committee.
The additional remuneration for the deputy chairperson of committees of the Supervisory Board of previously $20 THOUS was canceled.
No additional remuneration is paid for serving as a member of the Mediation Committee.
Remuneration awarded and due in the Fiscal Year
The remuneration awarded and due in the Fiscal Year to the members of the Supervisory Board of the Company is shown in the following table. No remuneration was awarded or due to former Supervisory Board members in the Fiscal Year.
Remuneration of the members of the Supervisory Board in office in the Fiscal Year (1)
in € THOUS
| Remuneration for supervisory board activities | Remuneration for committee services | Total remuneration | ||||||||||||||||||||||
| 2024 | 2023 (2) | 2024 | 2023 (2) | 2024 | 2023 (2) | |||||||||||||||||||
| Michael Sen (3) | 318 | 296 | 191 | 148 | 509 | 444 | ||||||||||||||||||
| Stefanie Balling (4) | 215 | — | 105 | — | 320 | — | ||||||||||||||||||
| Ralf Erkens (5) | 150 | — | 39 | — | 189 | — | ||||||||||||||||||
| Beate Haßdenteufel (6) | 150 | — | 11 | — | 161 | — | ||||||||||||||||||
| Sara Hennicken (7) | 174 | 155 | 38 | 3 | 212 | 158 | ||||||||||||||||||
| Regina Karsch (8) | 150 | — | 31 | — | 181 | — | ||||||||||||||||||
| Shervin J. Korangy (9) | 159 | 12 | 86 | 8 | 245 | 20 | ||||||||||||||||||
| Dr. Marcus Kuhnert (10) | 159 | 12 | 138 | 9 | 297 | 21 | ||||||||||||||||||
| Frank Michael Prescher (11) | 150 | — | 39 | — | 189 | — | ||||||||||||||||||
| Gregory Sorensen, M.D. (12) | 159 | 148 | 54 | 3 | 213 | 151 | ||||||||||||||||||
| Dr. Manuela Stauss-Grabo (13) | 150 | — | 37 | — | 187 | — | ||||||||||||||||||
| Pascale Witz (14) | 172 | 148 | 127 | 82 | 299 | 230 | ||||||||||||||||||
| Total | 2,106 | 771 | 896 | 253 | 3,002 | 1,024 | ||||||||||||||||||
| (1) | Shown without withholding tax. The currency of the remuneration was changed from U.S. dollars to euro effective July 1, 2024. The translation of U.S. dollar amounts was made for the period from January 1, 2024 to June 30, 2024 using the average exchange rate for the first half of 2024 and for the previous year using the average exchange rate for the previous year. |
| (2) | Mr. Michael Sen and Ms. Sara Hennicken each were exclusively, and Mr. Gregory Sorensen, M.D. and Ms. Pascale Witz each were also, members of the supervisory board of the Company’s General Partner, Fresenius Medical Care Management AG, which was involved in the corporate governance of the Company until the change in the Company’s legal form took effect on November 30, 2023. In continuation of the Company’s previous reporting practice, the amounts shown in this table for 2023 also include the remuneration they received for their work on the supervisory board of Fresenius Medical Care Management AG. |
| (3) | Until November 30, 2023, member and Chairman of the supervisory board of Fresenius Medical Care Management AG in its function as the General Partner. Since then, member and Chairman of the Supervisory Board of the Company as well as of the Presiding Committee and the Nomination Committee. |
| (4) | Since January 26, 2024, member of the Supervisory Board of the Company. Since March 14, 2024, Deputy Chairwoman of the Supervisory Board as well as member and Deputy Chairwoman of the Audit Committee and the Presiding Committee. |
| (5) | Since January 26, 2024, member of the Supervisory Board of the Company. Since March 14, 2024, member of the Presiding Committee. |
| (6) | Since January 26, 2024, member of the Supervisory Board of the Company. |
| (7) | Until November 30, 2023, member of the supervisory board of Fresenius Medical Care Management AG in its function as the General Partner. Since then, member of the Supervisory Board of the Company and of the Nomination Committee. From November 30, 2023 to March 14, 2024 Deputy Chairwoman of the Supervisory Board of the Company. |
| (8) | Since January 26, 2024, member of the Supervisory Board of the Company. Since March 14, 2024, member of the Compensation Committee. |
| (9) | Since November 30, 2023, member of the Supervisory Board of the Company, member of the Compensation Committee as well as member and Deputy Chairman of the Nomination Committee. |
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| (10) | Since November 30, 2023, member of the Supervisory Board of the Company, member and Chairman of the Audit Committee as well as member of the Presiding Committee. |
| (11) | Since January 26, 2024, member of the Supervisory Board of the Company. Since March 14, 2024, member of the Audit Committee. |
| (12) | Until November 30, 2023, also member of the supervisory board of Fresenius Medical Care Management AG in its function as the General Partner. Since then, member of the Audit Committee. |
| (13) | Since January 26, 2024, member of the Supervisory Board of the Company. Since March 14, 2024, member and Deputy Chairwoman of the Compensation Committee. |
| (14) | Until November 30, 2023, also member of the supervisory board of Fresenius Medical Care Management AG in its function as the General Partner. Since then, also member and Chairwoman of the Compensation Committee as well as member of the Nomination Committee. Until March 14, 2024, also member and Deputy Chairwoman of the Audit Committee; until November 30, 2023, Chairwoman of the Audit Committee. |
Comparative presentation of the development of the compensation
The development of the compensation awarded and due to the current and former members of the Management Board and the Supervisory Board, the development of the Company’s earnings and the development of the average compensation of employees on a full-time equivalent (FTE) basis are shown comparatively in the following table. The disclosures are also made for the former members of the management board of the former General Partner of the Company (i.e., Fresenius Medical Care Management AG). The disclosures are only made for persons to whom compensation was granted or due in the Fiscal Year.
Metrics for the performance of the Company
For the purposes of a comparative presentation of the Company’s performance, in addition to the Company’s annual results for the year under German commercial law, which shows the Company’s earnings development pursuant to German commercial law, revenue and net income as well as operating income and return on invested capital (ROIC) are also used, each of which serve as primary key performance indicators or secondary financial performance indicators of the group and as performance targets for the Management Board members’ variable compensation.
Information on the compensation awarded and due
Since the Compensation Report for 2021, the compensation has been reported in accordance with the provisions of the new Section 162 AktG introduced at the time. In order to obtain a reasonable comparison between the individual years, the information contained in the following table on the compensation of the members of the Management Board and the Supervisory Board in 2020 is also reported in accordance with the understanding of the term “compensation awarded and due” applied in the compensation tables in the section “Compensation tables for the Management Board members in office in the Fiscal Year.” The amounts disclosed for 2020 therefore differ in some cases from the corresponding disclosures in the Compensation Report for 2020.
Financial figures
The figures set out in the compensation comparison are disclosed at current currency and in accordance with the accounting standards applied by the Company in the relevant fiscal year, while the growth rates relating to the Management Board members’ Long-Term Incentive are determined at constant currency and the figures relating to the Management Board members’ Short-Term Incentive are translated at the exchange rates that were applied for the determination of the target values.
As disclosed in the Compensation Reports for the relevant years, the figures used for determining the level of target achievement and for determining the Management Board members’ compensation were and are, in some cases, adjusted for certain effects to ensure comparability of the figures with respect to the operational performance.
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Consequently, there is only a limited degree of comparability between the figures relating to each year shown in the following table and the corresponding amounts of the Management Board members’ compensation and, in particular, between these figures in terms of their respective annual change.
Compensation of the Management Board
In accordance with the applicable plan terms, an award in the meaning of this Compensation Report from the Long-Term Incentive to the members of the Management Board is generally made only after expiry of the multi-year vesting period. As a result, compensation awarded or due to Management Board members is usually lower in the first years of their Management Board activity than in subsequent years.
The vesting periods for the various Long-Term Incentives included in the following table are not identical. This means that more than one tranche of the Long-Term Incentives could be earned in certain years and is therefore deemed to have been awarded. This applies, for example, to the 2019 allocation under the Management Board Long Term Incentive Plan 2019 (MB LTIP 2019) and the 2020 allocation under the MB LTIP 2020, which each vested in 2023.
The pension allowance introduced with effect from January 1, 2024 for individual members of the Management Board is compensation within the meaning of Section 162 paragraph 1 sentence 2 no. 1 AktG and is therefore – unlike the pension expense for pension commitments incurred for individual current or former members of the Management Board – included in the amounts shown in the following table.
Compensation of the Supervisory Board
The variable compensation component previously in place for the Supervisory Board was eliminated with effect from January 1, 2021. To compensate for this, the fixed compensation of the members of the Supervisory Board was increased effective from January 1, 2021. Furthermore, the compensation for the members of the Supervisory Board and its committees was changed with effect as of July 1, 2024 and increased moderately overall in order to appropriately take into account the further increased demands regarding the responsibilities of the Supervisory Board and certain Supervisory Board committees as well as the corresponding increase in time expenditure.
Compensation of the employees
Employee compensation is based on the average wages and salaries of all employees on an FTE basis at the Company and its group companies worldwide in the respective year in order to enable reporting that is consistent with the corresponding figures from reports for previous years as well as the most comprehensive comparison possible over the entire comparative period.
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Table on the development of the compensation
The comparative presentation of the development of the compensation over the past five years is shown in the following table:
Comparative presentation of the development of the compensation
| 2024 | Change | 2023 | Change | 2022 | Change | 2021 | Change | 2020 | |||||||||||||||||||
| in € THOUS | in % | in € THOUS | in % | in € THOUS | in % | in € THOUS | in % | in € THOUS | |||||||||||||||||||
| Revenue | 19,335,909 | (1 | ) | 19,453,617 | 0 | 19,398,017 | 10 | 17,618,685 | (1 | ) | 17,859,063 | ||||||||||||||||
| Operating income | 1,392,395 | 2 | 1,369,438 | (9 | ) | 1,511,755 | (18 | ) | 1,852,290 | (20 | ) | 2,304,409 | |||||||||||||||
| Net income | 537,913 | 8 | 498,997 | (26 | ) | 673,405 | (31 | ) | 969,308 | (17 | ) | 1,164,377 | |||||||||||||||
| ROIC | 3.5 | % | 25 | 2.8 | % | (15 | ) | 3.3 | % | (33 | ) | 4.9 | % | (16 | ) | 5.8 | % | ||||||||||
| Annual result according to the statutory financial statements of Fresenius Medical Care AG | 966,458 | 21 | 798,197 | n. a. | (1,141,219 | ) | n. a. | 1,737,017 | n. a. | (1,357,242 | ) | ||||||||||||||||
| Average employees’ compensation | 60.8 | 17 | 51.9 | (1 | ) | 52.3 | 15 | 45.4 | (2 | ) | 46.2 | ||||||||||||||||
| CEO pay ratio (CEO in office at year-end to average employees) | 61:1 | n. a. | 83:1 | n. a. | 38:1 | n. a. | 119:1 | n. a. | 165:1 | ||||||||||||||||||
| Members of the Management Board in office in the Fiscal Year | |||||||||||||||||||||||||||
| Helen Giza | 3,708 | (14 | ) | 4,304 | 119 | 1,969 | 11 | 1,781 | (12 | ) | 2,014 | ||||||||||||||||
| Craig Cordola, Ed.D. | 3,718 | n. a. | — | n. a. | — | n. a. | — | n. a. | — | ||||||||||||||||||
| Martin Fischer | 2,524 | 185 | 887 | n. a. | — | n. a. | — | n. a. | — | ||||||||||||||||||
| Dr. Jörg Häring | 1,378 | n. a. | — | n. a. | — | n. a. | — | n. a. | — | ||||||||||||||||||
| Franklin W. Maddux, M.D. | 2,359 | (13 | ) | 2,708 | 61 | 1,683 | (15 | ) | 1,986 | (33 | ) | 2,949 | |||||||||||||||
| Dr. Katarzyna Mazur-Hofsäß | 2,666 | (17 | ) | 3,210 | 69 | 1,903 | 2 | 1,872 | (6 | ) | 1,993 | ||||||||||||||||
| Former members of the Management Board | |||||||||||||||||||||||||||
| Michael Brosnan | 374 | (38 | ) | 601 | 57 | 382 | (41 | ) | 651 | (83 | ) | 3,813 | |||||||||||||||
| Roberto Fusté | 293 | — | 293 | — | 293 | 7 | 274 | (87 | ) | 2,157 | |||||||||||||||||
| Dr. Carla Kriwet | 297 | n. a. | — | (100 | ) | 3,173 | n. a. | — | n. a. | — | |||||||||||||||||
| Ronald Kuerbitz | 11 | n. a. | — | n. a. | — | n. a. | — | n. a. | — | ||||||||||||||||||
| Rice Powell | 930 | (64 | ) | 2,574 | (45 | ) | 4,658 | (14 | ) | 5,424 | (29 | ) | 7,642 | ||||||||||||||
| Dr. Olaf Schermeier | 105 | (84 | ) | 670 | 4 | 644 | (75 | ) | 2,578 | (15 | ) | 3,042 | |||||||||||||||
| William Valle | 182 | (97 | ) | 6,387 | 85 | 3,457 | (7 | ) | 3,709 | (16 | ) | 4,402 | |||||||||||||||
| Kent Wanzek | 382 | (66 | ) | 1,137 | 54 | 740 | (71 | ) | 2,554 | (30 | ) | 3,654 | |||||||||||||||
| Harry de Wit | 96 | (86 | ) | 706 | 11 | 637 | (77 | ) | 2,814 | (13 | ) | 3,243 | |||||||||||||||
| Members of the supervisory board in office in the Fiscal Year | |||||||||||||||||||||||||||
| Michael Sen | 509 | 15 | 444 | 289 | 114 | n. a. | — | n. a. | — | ||||||||||||||||||
| Stefanie Balling | 320 | n. a. | — | n. a. | — | n. a. | — | n. a. | — | ||||||||||||||||||
| Ralf Erkens | 189 | n. a. | — | n. a. | — | n. a. | — | n. a. | — | ||||||||||||||||||
| Beate Haßdenteufel | 161 | n. a. | — | n. a. | — | n. a. | — | n. a. | — | ||||||||||||||||||
| Sara Hennicken | 212 | 34 | 158 | 216 | 50 | n. a. | — | n. a. | — | ||||||||||||||||||
| Regina Karsch | 181 | n. a. | — | n. a. | — | n. a. | — | n. a. | — | ||||||||||||||||||
| Shervin J. Korangy | 245 | 1,125 | 20 | n. a. | — | n. a. | — | n. a. | — | ||||||||||||||||||
| Dr. Marcus Kuhnert | 297 | 1,314 | 21 | n. a. | — | n. a. | — | n. a. | — | ||||||||||||||||||
| Frank Michael Prescher | 189 | n. a. | — | n. a. | — | n. a. | — | n. a. | — | ||||||||||||||||||
| Gregory Sorensen, M.D. | 213 | 41 | 151 | (1 | ) | 152 | 77 | 86 | n. a. | — | |||||||||||||||||
| Dr. Manuela Stauss-Grabo | 187 | n. a. | — | n. a. | — | n. a. | — | n. a. | — | ||||||||||||||||||
| Pascale Witz | 299 | 30 | 230 | 10 | 209 | 12 | 187 | 24 | 151 |
Outlook for the compensation for 2025
The Supervisory Board has again set the two equally weighted sub-targets “patient satisfaction” and “employee satisfaction” as the sustainability target for the STI for 2025 and the reduction in market-based CO2e emissions as the sustainability target for the LTI allocation for 2025. The other performance targets for the STI for the year 2025 and for the allocation of the LTI for 2025 also correspond to those of the Fiscal Year. Information on the target values and the respective performance target achievement will be disclosed after the end of the performance period in the Compensation Report for the relevant fiscal year.
42
Auditor’s Report
To Fresenius Medical Care AG, Hof (Saale)
We have audited the remuneration report of Fresenius Medical Care AG, Hof (Saale), for the financial year from January 1 to December 31, 2024 including the related disclosures, which was prepared to comply with § [Article] 162 AktG [Aktiengesetz: German Stock Corporation Act].
Responsibilities of the Executive Directors and the Supervisory Board
The executive directors and the supervisory board of Fresenius Medical Care AG are responsible for the preparation of the remuneration report, including the related disclosures, that complies with the requirements of § 162 AktG. The executive directors and the supervisory board are also responsible for such internal control as they determine is necessary to enable the preparation of a remuneration report, including the related disclosures, that is free from material misstatement, whether due to fraud or error.
Auditor’s Responsibilities
Our responsibility is to express an opinion on this remuneration report, including the related disclosures, based on our audit. We conducted our audit in accordance with German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the remuneration report, including the related disclosures, is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts including the related disclosures stated in the remuneration report. The procedures selected depend on the auditor’s judgment. This includes the assessment of the risks of material misstatement of the remuneration report including the related disclosures, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the preparation of the remuneration report including the related disclosures. The objective of this is to plan and perform audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the executive directors and the supervisory board, as well as evaluating the overall presentation of the remuneration report including the related disclosures.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Audit Opinion
In our opinion, based on the findings of our audit, the remuneration report for the financial year from January 1 to December 31, 2024, including the related disclosures, complies in all material respects with the accounting provisions of § 162 AktG.
43
Reference to an Other Matter – Formal Audit of the Remuneration Report according to § 162 AktG
The audit of the content of the remuneration report described in this auditor’s report includes the formal audit of the remuneration report required by § 162 Abs. [paragraph] 3 AktG, including the issuance of a report on this audit. As we express an unqualified audit opinion on the content of the remuneration report, this audit opinion includes that the information required by § 162 Abs. 1 and 2 AktG has been disclosed in all material respects in the remuneration report.
Restriction on use
We issue this auditor’s report on the basis of the engagement agreed with Fresenius Medical Care AG. The audit has been performed only for purposes of the company and the auditor’s report is solely intended to inform the company as to the results of the audit. Our responsibility for the audit and for our auditor’s report is only towards the company in accordance with this engagement. The auditor’s report is not intended for any third parties to base any (financial) decisions thereon. We do not assume any responsibility, duty of care or liability towards third parties; no third parties are included in the scope of protection of the underlying engagement. § 334 BGB [Bürgerliches Gesetzbuch: German Civil Code], according to which objections arising from a contract may also be raised against third parties, is not waived.
Frankfurt am Main, February 28, 2025
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
| (sgd. Peter Kartscher) | (sgd. Dominik Höhler) | |
| Wirtschaftsprüfer | Wirtschaftsprüfer | |
| (German Public Auditor) | (German Public Auditor) |
44
Exhibit 99.3
Convenience translation
Report by the Supervisory Board
of Fresenius Medical Care AG
for the Fiscal Year 2024
Dear Shareholders,
Fresenius Medical Care successfully completed its first full fiscal year following its change in legal form to a stock corporation. The year 2024 was marked by dynamic developments and significant geopolitical and geo-economic changes. Nevertheless, the global economy experienced stable growth, particularly in the health care sector. In this environment, the Company succeeded in improving the lives of millions of patients and making a significant contribution to the renal care continuum.
Throughout fiscal year 2024, Fresenius Medical Care continued the disciplined execution of its ambitious FME25 transformation program, achieving major milestones and exceeding its savings targets. Sustainable deleveraging, the realignment into two global business segments, the strategic optimization of the legacy portfolio, and, not least, the Company’s new independence are paying off. Furthermore, 2024 was a year of innovation for Fresenius Medical Care. For example, the Company made great strides in dialysis technology and personalized therapy, expanded the use of artificial intelligence in dialysis, and extended its global research collaborations.
As a result of these strategic decisions, Fresenius Medical Care is optimally positioned to continue setting the highest standards in renal care and actively shaping some of the most pressing societal challenges in the health care market. The market has recognized these achievements: in December 2024, the Company returned to the DAX 40.
Since January 2024, the Supervisory Board has been fully and equally composed of twelve members. I would like to extend my sincere congratulations to our new Supervisory Board members on their appointment to the board. I am convinced that their extensive experience and in-depth knowledge will be a valuable asset to the Supervisory Board. I look forward to continuing our constructive and successful collaboration in the best interests of the Company.
On behalf of the Supervisory Board, I would also like to extend my sincere congratulations to Dr. Jörg Häring on his appointment to the Management Board, which has been further strengthened by the addition of Legal, Compliance, and Human Resources. The collaboration between the Supervisory Board and the Management Board is based on trust and close cooperation. Under the leadership of Helen Giza, Fresenius Medical Care has an outstanding team and the necessary team spirit to successfully drive the Company’s continued development.
Fresenius Medical Care is well positioned to build on these achievements in the current fiscal year, further strengthen its position in the dialysis market, and increase shareholder value.
In the past fiscal year, the Supervisory Board once again observed all duties imposed on it by law, the Articles of Association and the rules of procedure. In this context it also took into account the recommendations and suggestions of the German Corporate Governance Code. The Supervisory Board supervised the Management Board within its responsibility, regularly advised the Management Board and was involved in decisions of fundamental importance to the company, including sustainability matters.
All relevant questions of the business policy, the company’s planning and the strategy were subject to the deliberations. Reports of the Management Board on the course of the business, the profitability and liquidity as well as on the situation and outlook of the Company and the group formed the basis for the work of the Supervisory Board. Further topics were the risk situation and risk management as well as discussions on portfolio changes and investment projects. The Supervisory Board and its competent committees comprehensively discussed these as well as also all further significant business events. The Supervisory Board passed resolutions within its competencies according to law and the Articles of Association.
Meetings
In the past fiscal year, four meetings of the Supervisory Board, some of which lasted several days, were conducted as in person meetings. The Supervisory Board also met regularly without the Management Board. To the extent that the auditor was called upon as an expert at meetings of the Supervisory Board or its committees, members of the Management Board attended the meetings only to the extent deemed necessary by the Supervisory Board or the committee, respectively.
1
Convenience translation
The participation rate of the members at the meetings of the Supervisory Board and its committees was 100 %. The following table shows the participation of the individual members in the past fiscal year:1
The Management Board and the Supervisory Board cooperate on a basis of trust to the benefit of the Company. The Supervisory Board was in regular contact with the Management Board and was always promptly and comprehensively informed by it. Between meetings, the Management Board reported to the Supervisory Board in writing. During the meetings, the Management Board also informed the Supervisory Board verbally. In addition, the Supervisory Board was also in contact with members of the senior management level last year. The members of the Management Board were further available to the Supervisory Board for follow-up queries. The Chairman of the Supervisory Board maintained continuous contact with the Management Board outside of the meetings, in particular with the Chairwoman of the Management Board, on questions regarding strategy, business development, the risk situation, risk management and compliance of the Company. In case of important occasions or events, the Chairwoman of the Management Board promptly informed the Chairman of the Supervisory Board. In such cases, the Chairman of the Supervisory Board subsequently informed the other members of the Supervisory Board in the next meeting at the latest. During the entire fiscal year, the Chairman of the Supervisory Board also was in close contact with the other members of the Supervisory Board.
1 The employee representatives were appointed as members of the Company's Supervisory Board upon a motion of the Management Board by the competent local court Hof (Saale) with effect from January 26, 2024 and were elected as members of the respective committee by the Supervisory Board on March 14, 2024. The Nomination Committee and the Mediation Committee did not convene in the year under review and are therefore not shown in this overview.
2
Convenience translation
The members of the Audit Committee are entitled to obtain information, via the Chairman of the Audit Committee, directly from the heads of certain central departments of the Company. As in previous years, it was however standard practice for the heads of central departments to report directly to the Supervisory Board and to be available for questions and for discussion.
Focus of the discussions in the Supervisory Board
One of the main focus areas of the Supervisory Board’s discussions in the past year was the comprehensive support of the Management Board in the continued adjustment of Fresenius Medical Care’s structures following the Company’s change in legal form from a partnership limited by shares (KGaA) to a stock corporation (AG) in fiscal year 2023 and the therewith associated deconsolidation from Fresenius SE & Co. KGaA. In particular, the Supervisory Board dealt in detail with the measures taken in the course of the Company’s independence following the change of the Company’s legal form and the continuation of the focused implementation of the Company’s strategic plan.
The Supervisory Board also in detail supported the Management Board in developing the future strategic direction of Fresenius Medical Care in the reporting year in order to further strengthen Fresenius Medical Care’s leading position in the dialysis market and to realize the full potential arising in particular from the new operating model with the two segments Care Delivery and Care Enablement established prior to the reporting year, the FME25 transformation program and Fresenius Medical Care’s independence following the change of its legal form. For such developing, the Supervisory Board deliberated at length on the basis of comprehensive analyses of the competitive, market and reimbursement situation and discussed in detail key conclusions for the future strategic direction of Fresenius Medical Care.
Also in the reporting year, the Supervisory Board in several meetings focused on the FME25 transformation program and was extensively involved in its implementation by the Management Board. This implementation was accelerated in the reporting year, resulting also in accelerated delivery of sustainable savings.
Due to the savings achieved as part of the FME25 transformation program and the continued operational turnaround, Fresenius Medical Care was able to further improve its financial results in the reporting year and to achieve a significant increase in the operating income margin. In addition, Fresenius Medical Care further improved its net debt and net leverage ratio in the past year.
In the year under review, the Supervisory Board also dealt with investments, the business strategy, the portfolio optimization, including the divestment of non-core businesses, as well as strategically relevant environmental, social and governance (ESG) aspects.
Fresenius Medical Care continued to consistently implement its portfolio optimization strategy of divesting non-core and margin-dilutive business activities in the year under review. In this context, Fresenius Medical Care completed the sale of the Australian Cura Day Hospital Group and the dialysis clinic business in Chile, Ecuador, Sub-Saharan Africa and Turkey as well as the dialysis clinic operations in Curaçao, Guatemala and Peru in the reporting year.
The business development, the competitive situation and conditions as well as the Management Board’s planning for the individual functions and business segments were also focal points of the Supervisory Board’s discussions in the reporting year. The Supervisory Board was also informed extensively by the Management Board about the effects of new drugs for treatment of type 2 diabetes, such as GLP-1 receptor agonists and SGLT-2 inhibitors. In this context, the Management Board comprehensively reported to the Supervisory Board on the potential impact on the patient base and the evaluated consequences for the expected business development. In joint consultations with the Management Board, the development of the production quantities and their expansion were also discussed.
In the past fiscal year, the Supervisory Board again discussed the development of cost reimbursement in the various health care systems, in particular in the U.S. With a view to the continued aim of increasing efficiency, the Supervisory Board further informed itself also in the past year about the success of the measures taken by the Management Board already in previous years to improve the cost situation.
3
Convenience translation
Moreover, the Supervisory Board was regularly informed about the Company’s compliance in the year under review. Findings of the internal audit department were also taken into account. In addition, the Supervisory Board also received detailed reports on the IT security systems and measures implemented at Fresenius Medical Care, including data security incidents that occurred in the year under review and their remediation.
Subject of the Supervisory Board's discussions was also the Company’s Annual General Meeting, including the resolutions proposed by the Supervisory Board, which was held as a meeting in presence on May 16, 2024 in the reporting year. Further details can be found in the Declaration on Corporate Governance starting on page 196 of the Annual Report (Geschäftsbericht).
Committees of the Supervisory Board
The Supervisory Board has formed professionally qualified committees from among its members that support the Supervisory Board as a whole in its supervisory and advisory functions as well as the adoption of resolutions. The respective Chairpersons of the committees have regularly reported to the Supervisory Board on the work of the committees. Details of the composition of the Supervisory Board’s committees can be found in the Declaration on Corporate Governance which can be found starting on page 196 of the Annual Report.
Presiding Committee
The Supervisory Board is, in particular, responsible for preparing the meetings of the Supervisory Board, coordinating the work of the Supervisory Board and its committees and advising and supporting the Chairman and Deputy Chairwoman of the Supervisory Board as well as administrative matters. The Presiding Committee resolves upon matters that cannot be delayed if the Supervisory Board cannot pass a resolution in a timely manner. The Presiding Committee is also responsible for various matters concerning the Management Board, such as recommendations to the Supervisory Board on the appointment or dismissal of Management Board members. Furthermore, the Presiding Committee reviews and assesses the Company’s corporate governance.
The Presiding Committee convened in the past fiscal year four times in person to deal with the preparation of meetings of the Supervisory Board, in particular with regard to corporate governance reporting and aspects of long-term succession planning, an amendment to the Company’s Articles of Association which only affected the wording, and the rules of procedures of the Supervisory Board’s committees.
Audit Committee
In accordance with its rules of procedure, the Audit Committee in particular performs all the duties imposed on an audit committee pursuant to section 107 paragraph 3 sentence 2 of the German Stock Corporation Act (Aktiengesetz – AktG) and the applicable rules of the U.S.-American Securities and Exchange Commission (SEC) and the New York Stock Exchange (NYSE). This includes, in particular, the monitoring of the accounting process, the effectiveness of the internal control system, the risk management system and the internal audit system, the audit of the financial statements, in particular the selection and independence of the auditor as well as the quality of the audit. Also, the Supervisory Board has delegated the responsibility for adopting resolutions on the approval of transactions with related parties in accordance with sections 111a et seq. of the German Stock Corporation Act to the Audit Committee.
The Audit Committee convened nine times in the past fiscal year. Of these meetings, two meetings were conducted as in person meetings, three meetings were conducted as hybrid meetings, i.e. as meeting in person of at least two members with the possibility of a virtual participation, and four meetings were conducted as video conferences.
Dr. Marcus Kuhnert (Chairman) and Mr. Gregory Sorensen, M.D. are each financial experts in the meaning of Section 100 paragraph 5 German Stock Corporation Act as well as “audit committee financial experts” within the meaning of the applicable rules of the SEC. Based on their many years of experience, they each have expertise in both accounting and auditing and are each independent within the meaning of the applicable provisions. This also applies to Ms. Pascale Witz, who was a member and Deputy Chairwoman of the Audit Committee until March 14, 2024. Further details on the qualifications and independence of the members of the Audit Committee can be found in the Declaration on Corporate Governance starting on page 196 of the Annual Report.
4
Convenience translation
In the past year, the Audit Committee dealt with the annual and consolidated financial statements, the proposal for the allocation of profit and the report according to Form 20-F for the SEC as well as the Sustainability Group Report of the Company integrated into the group management report. It also discussed the quarterly reports with the Management Board. Also, the engagement pertaining to the audit of the consolidated financial statements according to the International Financial Reporting Standards (IFRS) and the internal controls concerning the financial reporting, which are part of the report according to Form 20-F, was issued by the committee. The Audit Committee further negotiated the fee agreement with the auditor. Audit focal points and further key audit matters of the past fiscal year were the assessment of the recoverability of goodwill, the valuation of receivables from dialysis treatments in the U.S., the valuation of uncertain tax positions, the accounting treatment of significant legal disputes, asset groups held for sale, the impact of cyber risks, finance and IT transformation, the FME25 program, the portfolio optimization program, Pillar II and virtual power purchase agreements on financial reporting, the impact of CSRD and on the Company’s annual financial statements, the valuation of investments in affiliated companies and the recognition of income from investments.
Representatives of the auditor participated in all meetings of the Audit Committee and informed the members of the Audit Committee of their auditing activities. In addition, they provided information on any significant results of their audit and were available for additional information. In the absence of the members of the Management Board, they reported on the cooperation with them and shared their observations with the committee. The Audit Committee also consulted with the external auditors on a regular basis without the Management Board. The Chairman of the Audit Committee also had regular exchanges with representatives of the auditor outside the meetings of the Audit Committee, in particular on the progress of the audit, and subsequently reported thereon to the Audit Committee.
The Audit Committee dealt on several occasions with the monitoring of the accounting and its process, the effectiveness of the internal control system, the risk management system and the internal audit system as well as with the audit of the financial statements – in particular the selection and independence of the auditor, the quality of the audit and the additional services provided by the auditor – as well as with the compliance management system. Further, the committee discussed with the auditor the audit risk assessment, the audit strategy and audit planning, and the audit results.
In the course of its audit, the auditor audited the internal control system in relation to the accounting process, the electronic reproduction of the consolidated financial statements and the group management report pursuant to section 328 paragraph 1 of the German Commercial Code (Handelsgesetzbuch – HGB) prepared for disclosure purposes (so-called ESEF documents) as well as the early risk recognition system. The audit showed that the Management Board has appropriately implemented the measures required under section 91 paragraph 2 AktG, in particular regarding the establishment of a monitoring system, and that the monitoring system is suitable for the early identification of developments that may endanger the continued existence of the Company. The Management Board periodically reported to the Audit Committee on major individual risks. It also regularly informed the Audit Committee on the compliance situation as well as on the audit plans and results of the internal audit.
The Audit Committee also dealt with environmental, social and governance (ESG) aspects of strategic relevance to the Company. In this context, the committee discussed in particular the regulatory requirements in the area of sustainability and the Company’s progress in pursuing the set global sustainability targets.
The Audit Committee again reviewed the business relations of the Fresenius Medical Care group companies to Fresenius SE & Co. KGaA and the latter’s affiliated companies. It was confirmed in each case that these relationships corresponded to those between unrelated third parties.
Certain transactions of the Company with related parties may be subject to the approval of the Supervisory Board pursuant to section 111b paragraph 1 AktG. The Supervisory Board has made use of the option to delegate the responsibility for the approval resolution to the Audit Committee. In the year under review, there were no transactions requiring such approval. In accordance with section 111a paragraph 2 sentence 2 AktG, the Audit Committee reviewed whether transactions between the Company and related parties were conducted in the ordinary course of business and at arm’s length. No objections were raised in this respect.
5
Convenience translation
The Chairman of the Audit Committee regularly reported to the Supervisory Board on the results of the discussions and resolutions in the Audit Committee.
Compensation Committee
The Compensation Committee prepares the decisions of the Supervisory Board regarding the compensation of the members of the Management Board. This includes the preparation of the determination of the compensation system and the plan terms of the short-term and long-term incentive of the Management Board as well as the definition of the targets for variable compensation components and the definition of target values, and the determination of the target achievement. The Compensation Committee also reviews the compensation report.
In the past fiscal year, the Compensation Committee convened five times to prepare the implementation of the system for the compensation of the members of the Management Board resolved at the Annual General Meeting on May 16, 2024 (Compensation System 2024+), and the resolution on the compensation report and compensation decisions for the next year by the Supervisory Board. Of these meetings, four meetings were conducted as in person meetings and one meeting was conducted as video conference.
Nomination Committee
The Nomination Committee identifies and recommends suitable candidates to the Supervisory Board for its proposals to the General Meeting for the election of Supervisory Board members. The Nomination Committee also recommends suitable candidates to the Supervisory Board in case a judicial appointment of a shareholder representative on the Supervisory Board is required. The Nomination Committee further makes recommendations to the Supervisory Board on members of the shareholder representatives to be elected to the committees of the Supervisory Board. This does not apply to the election of members of the shareholder representatives to the Mediation Committee.
In the past fiscal year, the Nomination Committee did not convene since no meeting was required.
Mediation Committee
The Mediation Committee (Vermittlungsausschuss) was formed with effect from March 14, 2024 after the employee representatives had been appointed by the court as members of the Supervisory Board. The Mediation Committee is responsible for proposals for the appointment or dismissal of members of the Management Board to the Supervisory Board if the respective measure is not passed by the Supervisory Board with the required majority during the first vote.
In the past fiscal year, the Mediation Committee did not convene since no meeting was required.
Dialogue with Investors
The Chairman of the Supervisory Board and, for environmental, social and governance (ESG) aspects falling within the competence of the Supervisory Board, the Chairman of the Audit Committee, were also available for discussions with investors in the year under review to the extent permitted by law and in close consultation with the Management Board. In these discussions, investors were given the opportunity to exchange views with the Chairman of the Supervisory Board and the Chairman of the Audit Committee on matters concerning the corporate governance of the Company and environmental, social and governance (ESG) aspects, respectively, falling within the competence of the Supervisory Board. Key topics in the year under review were the corporate governance-related issues, the agenda of the upcoming Annual General Meeting, in particular the compensation report and the compensation system 2024+.
6
Convenience translation
Corporate Governance
The members of the Supervisory Board in principle self-responsibly undertake educational and training measures required for their tasks, such as on changes in the legal framework and on new, future-oriented developments and technologies, and are adequately supported in this respect by the Company.
In addition to the information provided to them by various external experts, also experts of the Company’s departments regularly report on relevant developments. This includes – for example – relevant new developments in the revision of legal rules or in jurisprudence and recent developments in regulations on accounting and audit and sustainability requirements. In this way, the Supervisory Board, with the Company’s adequate assistance, ensures an ongoing qualification of its members and also a further development and updating of their expertise, power of judgment, and experience required for the Supervisory Board including its committees to duly perform their tasks.
New members of the Supervisory Board can meet the members of the Management Board and specialist managers for a discussion of fundamental and current topics and thereby gain an overview of the relevant topics of the Company (Onboarding). The employee representatives of the Supervisory Board took part in an onboarding event lasting several days in the reporting year.
For targeted further training, internal information events are offered as required. In the year under review, further training was provided for the members of the Supervisory Board on current developments in corporate governance and upcoming relevant legal regulations. These included the new regulations of the German Future Financing Act (Zukunftsfinanzierungsgesetz) as well as legal developments relating to data protection and data use, cyber security and artificial intelligence. In addition, the members of the Audit Committee received further training on regulatory requirements and developments in the area of sustainability.
The Supervisory Board reports to the General Meeting on possible conflicts of interests of its members and on the treatment of such conflicts. If specific conflicts of interest exist or cannot be ruled out with certainty, the concerned Supervisory Board member will disclose this to the Supervisory Board. If a subsequent review reveals that a conflict of interest exists, suitable measures will be taken to resolve the conflict of interest. In the reporting year, no conflicts of interest arose that would have had to be disclosed.
Separate preparation meetings of the employee representatives and consultations among the shareholder representatives take place on a regular basis.
Further details on corporate governance, in particular on the independence of the Supervisory Board members, the qualification matrix for the implementation status of the profile of skills and expertise for the Supervisory Board, the age limit and the regular maximum tenure for membership in the Company’s Supervisory Board, as well as the self-assessment of the activities of the Supervisory Board and its committees, can be found in the Declaration on Corporate Governance starting on page 196 of the Annual Report. The Declaration on Corporate Governance was discussed by the Supervisory Board and approved in its meeting of March 12, 2025.
The Declaration on Corporate Governance also includes the Declaration of Compliance in relation to the German Corporate Governance Code according to section 161 AktG as resolved by the Management Board and Supervisory Board and published in December 2024. The Declaration of Compliance is permanently available to the public on the Company’s website at www.freseniusmedicalcare.com in the section “Investors” and there in the sub-section “Corporate Governance”.
Compensation Report
The Management Board and the Supervisory Board prepared a compensation report in accordance with section 162 AktG for the year under review, which with respect for the Supervisory Board was finally discussed and approved by the Supervisory Board at its meeting on March 12, 2025. The auditor reviewed the compensation report in accordance with section 162 paragraph 3 AktG to determine whether the legally required disclosures pursuant to section 162 paragraphs 1 and 2 AktG were made. In addition to the statutory requirements, the content of the report was also again reviewed by the auditor. The auditor confirmed that the compensation report, in all material respects, complied with the accounting provisions of section 162 AktG. In accordance with section 120a paragraph 4 AktG, the compensation report will be submitted to the General Meeting of the Company for approval.
7
Convenience translation
Annual and consolidated financial statements
The annual financial statements and the management report of the Company were prepared in accordance with the regulations of the German Commercial Code (Handelsgesetzbuch – HGB). The consolidated financial statements and group management report follow section 315e of the German Commercial Code (HGB) in accordance with IFRS as applicable in the European Union. The sustainability statement of the Company, which fulfills the requirements of a non-financial group declaration, is integrated into the group management report. Accounting, the annual financial statements, the management report as well as the consolidated financial statements and the group management report for fiscal year 2024 were audited by PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main (PwC). PwC has been the auditor of the Company since the fiscal year 2020 and was elected as auditor for the year under review by resolution of the Annual General Meeting on May 16, 2024 and mandated by the Supervisory Board. The auditor provided each of the aforementioned documents with an unqualified certificate. Mr. Peter Kartscher (as already in the previous years since 2020) and Mr. Dominik Höhler (as already in the previous year) signed the respective audit certificate as the auditors. The auditor’s report on a limited assurance engagement review in relation to the sustainability statement was signed by the auditors Mr. Peter Kartscher (for the first time) and Ms. Nicolette Behncke (as already in the previous years since 2020), and contains no findings. The audit reports of the auditor were made available to the Audit Committee and the Supervisory Board. The Audit Committee reviewed the annual and consolidated financial statements as well as the management reports, including the sustainability statement integrated into the group management report, and included the audit reports of, and the discussions with, the auditor in its discussions. The Audit Committee reported to the Supervisory Board on this.
The Supervisory Board also reviewed the annual financial statements, the management report, the consolidated financial statements and the group management report, including the sustainability statement integrated into the group management report, in each case for the past fiscal year. The documents were provided to it in good time. The Supervisory Board declared its agreement with the result of the audit of the annual financial statements and the consolidated financial statements by the auditor. The representatives of the auditor who signed the audit reports participated in the discussions of the Supervisory Board of the annual and consolidated financial statements. They reported to the Supervisory Board on the significant findings of their audit and were available for additional information. Also according to the final results of its own review, no objections are to be raised by the Supervisory Board as regards the annual financial statements, the management report, the consolidated financial statements and the group management report, including the sustainability statement integrated into the group management report.
By way of a written resolution on February 24, 2025, the Supervisory Board approved the draft of the report according to Form 20-F. The report according to Form 20-F was filed with the SEC on February 25, 2025.
The Supervisory Board approved the annual financial statements and management report of the Company as well as the consolidated financial statements and the group management report for the past fiscal year, as presented by the Management Board, at its meeting on March 12, 2025; the annual financial statements of the Company are adopted by this approval of the Supervisory Board.
The Supervisory Board also approved the Management Board’s proposal for the allocation of profit which provides for a dividend of € 1.44 for each share.
Sustainability Statement
The sustainability statement of the Company fulfills the requirements of a non-financial group declaration and was prepared in accordance with sections 315b and 315c HGB and the EU Taxonomy Regulation (Regulation (EU) 2020/852). The sustainability statement is published in the group management report and fully applies the European Sustainability Reporting Standards as a reporting framework. This sustainability statement describes Fresenius Medical Care’s sustainability performance in the fiscal year 2024 in line with regulatory requirements.
The Supervisory Board has engaged an external auditor to audit the sustainability statement. The sustainability statement was subjected to a limited assurance engagement review by PwC in accordance with the ISAE 3000 (Revised) assurance standard. PwC issued a corresponding independent practitioner’s report.
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Convenience translation
The Supervisory Board, too, reviewed the sustainability statement. It received the documents in good time. The Supervisory Board declared its agreement with the result of the limited assurance engagement review in relation to the sustainability statement by the auditor. The representatives of the auditor who signed the statement on the limited assurance engagement review participated in the discussions of the Supervisory Board about the sustainability statement. They reported to the Supervisory Board on the significant findings of their limited assurance engagement review and were available for additional information. Also according to the final results of its own review, no objections are to be raised by the Supervisory Board as regards the sustainability statement.
Acknowledgements
The members of the Management Board, led by Helen Giza, along with all employees, have successfully advanced the development of Fresenius Medical Care. We would like to thank them for their commitment in this pivotal year. We are confident that they will continue on this successful path and shape a promising future – for patients with kidney disease and for Fresenius Medical Care.
Bad Homburg v.d. Höhe, March 12, 2025
On behalf of the Supervisory Board
| /s/ Michael Sen |
Chairman
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Exhibit 99.4
 | Convenience Translation |
Explanatory Report of the Management Board
to the 2025 Annual General Meeting of Fresenius Medical Care AG
on the information pursuant to Sections 289a, 315a of the German Commercial Code
The information contained in the management report to the consolidated financial statements and the annual financial statements of Fresenius Medical Care AG (the Company) for fiscal year 2024 according to Sections 289a, 315a of the German Commercial Code (HGB) are explained as follows:
The share capital held by the Company’s shareholders as of December 31, 2024, totals approximately €293 M, divided into 293,413,449 non-par bearer shares, and a nominal value of €1 each. As of December 31, 2024, the Company does not hold any treasury shares.
The rights of the shareholders are governed by the German Stock Corporation Act (AktG) and the Company's Articles of Association. Each share shall be entitled to one vote at the Company’s general meeting and is decisive for the shareholders’ share in the Company’s profit. This does not apply to treasury shares held by the Company, which do not entitle the Company to any rights. In the cases of Section 136 AktG, voting rights from the shares concerned are excluded by law. To the extent notification obligations regarding shareholdings or voting rights are not fulfilled, rights from the shares affected by this may temporarily not exist in accordance with Section 20 AktG or Section 44 of the German Securities Trading Act. There are no restrictions in the Articles of Association with regard to voting rights from the Company’s shares or with regard to the transfer of the Company’s shares.
As of December 31, 2024, Fresenius SE & Co. KGaA, Bad Homburg v. d. Höhe, Germany holds 94,380,382 shares of the Company, which corresponds to a 32.17% holding and hence exceeds 10% of the Company’s total share capital. Otherwise, the Company is not aware of any direct or indirect shareholdings in the capital that exceed 10% of the voting rights. As of March 4, 2025, Fresenius SE & Co. KGaA holds 83,780,382 shares of the Company, which corresponds to a 28.55% holding of the Company’s total share capital.
Fresenius SE & Co. KGaA, Bad Homburg v. d. Höhe, Germany, is entitled to appoint one of the members attributable to the shareholders to the Supervisory Board, if it holds shares in the Company representing at least 15% of the Company’s share capital according to the Articles of Association of the Company; if Fresenius SE Co. KGaA holds shares in the Company representing at least 30% of the Company’s share capital, it is entitled to appoint two of the members attributable to the shareholders to the Supervisory Board. Otherwise, no holders of shares have special rights that confer powers of control. Based on the aforementioned right of appointment, Fresenius SE & Co. KGaA on July 14, 2023 appointed two members to the Supervisory Board of the Company. The appointment was made for the time until the conclusion of the general meeting of shareholders of the Company that resolves upon the discharge of the members of the Supervisory Board of the Company for fiscal year 2026. The appointment in principle remains unaffected by the reduction of Fresenius SE & Co. KGaA’s shareholding in the Company below 30% of the Company’s share capital.
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| Convenience Translation |
To the extent employees hold an interest in the Company’s capital, they can exercise their control rights from the shares directly. The Company is not aware of any agreements to the contrary.
The appointment and removal of members of the Management Board by the Supervisory Board are governed by Sections 84 and 85 AktG and Section 31 of the German Co-Determination Act. In accordance with Section 6 (1) of the Articles of Association, the Management Board consists of at least two members. Pursuant to Section 33 (1) of the German Co-Determination Act, the Management Board must include a Labor Relations Director. Otherwise, the Supervisory Board determines the number of Management Board members.
Amendments to the Articles of Association of the Company can be made by the resolution of the general meeting of shareholders in accordance with Sections 119 (1) No. 6, 179 in conjunction with 133 AktG. The resolution of the general meeting of shareholders requires a majority of at least three quarters of the share capital represented when the resolution is passed. The Articles of Association entitle the Company’s Supervisory Board to make amendments to the Articles of Association which concern only its wording without resolution of the general meeting.
The Management Board is entitled, subject to approval by the Supervisory Board, to increase the Company’s share capital as follows in accordance with the resolutions passed by the shareholders at the general meeting:
| · | Authorization to increase on one or more occasions until August 26, 2025 the Company’s share capital by up to a total of €35 M by issuing new bearer ordinary shares in return for cash contributions (Authorized Capital 2020/I). |
| · | Authorization to increase on one or more occasions until August 26, 2025 the Company’s share capital by up to a total of €25 M by issuing new bearer ordinary shares in return for cash contributions and/or contributions in kind (Authorized Capital 2020/II). |
In both cases, the Management Board is entitled, with the approval of the Supervisory Board and in accordance with the resolutions passed at the general meeting, to take a decision on the exclusion of shareholders’ pre-emption rights. The details of the authorizations are regulated in Article 4 (3) and (4) of the Company’s Articles of Association. No use was made of these authorizations in fiscal year 2024.
The Company’s share capital in fiscal year 2024 was subject to a conditional increase of up to €8.957 M. This conditional capital increase was only be carried out to the extent that options were issued in accordance with the Stock Option Plan 2011 based on the shareholders’ resolutions of May 12, 2011 and May 12, 2016, provided the holders of such options exercises their rights and the Company did not issue any of its own treasury shares to settle those options. Options under the Stock Option Plan 2011 could be issued for the last time in 2015 and could be exercised for the last time in 2023. No shares were issued from the conditional capital in fiscal year 2024. The conditional capital, to the extent it had not previously been used, was canceled on May 27, 2024 by registration of the corresponding amendment to the Articles of Association with the commercial register. Since then, the share capital has no longer been conditionally increased.
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| Convenience Translation |
In accordance with the resolution taken at the general meeting on May 20, 2021, which was amended in view of the Company’s Conversion by resolution of the extraordinary general meeting on 16 May 2023, the Management Board is authorized to acquire treasury shares until May 19, 2026 and up to a maximum of 10% of the share capital in place on the date of the resolution. At no time shall the acquired shares together with the treasury shares held by the Company or attributable to it pursuant to Sections 71a ff. AktG exceed 10% of the Company’s share capital. The acquisition can be made via the stock exchange or by means of a public invitation to submit offers for sale. The authorization may not be used for the purposes of trading in its own shares. The Management Board is authorized to use the shares of the Company acquired on the basis of this or an earlier authorization for all legally admissible purposes, in particular also (i) to redeem them without any requirement for a further resolution to be taken at the general meeting, (ii) to sell them to third parties in return for contributions in kind, (iii) rather than using conditional capital, to award them to employees of the Company and its affiliates (including to members of the executive managements of affiliates) and to use them to service rights or commitments to acquire shares of the Company, and (iv) to service bonds with option or conversation rights issued by the Company or by affiliated companies as defined by Section 17 AktG. No treasury shares were acquired in fiscal year 2024.
Under certain circumstances, a change of control resulting from a takeover offer could impact several of the Company’s long-term financing arrangements which include market standard change of control clauses. These clauses give creditors the right to call for early repayment of outstanding amounts in the event of a change of control. However, with regard to most of these financing agreements – in particular in case of bonds placed on the capital markets – this right to terminate only exists if the change of control occurs together with the Company’s rating being downgraded below Investment Grade or withdrawn, and not reinstated to Investment Grade within 120 days.
The Company uses “Fresenius” in its name and trademarks under a license from Fresenius SE & Co. KGaA. Fresenius SE & Co. KGaA has the right to terminate the license if a direct competitor of Fresenius SE & Co. KGaA acquires control of the Company or any other third party acquires control of the Company and Fresenius SE & Co. KGaA, acting reasonably, expects such acquisition to result in a not insignificant risk of negative impact on the Fresenius brand. In both cases, “control” is defined as acquisition of 30% or more of the shares in the Company. In case of such termination, the Company may continue using the “Fresenius” name for 18 months to facilitate rebranding efforts.
The Company has not entered into any compensation agreements with the members of the Management Board or with employees in the event of a takeover bid.
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| Convenience Translation |
| Hof (Saale), March 2025 | |
| Fresenius Medical Care AG | |
| sgd. Helen Giza | sgd. Craig Cordola, Ed.D. |
| sgd. Martin Fischer | sgd. Dr.Jörg Häring |
| sgd. Franklin W. Maddux, M.D. | sgd. Dr.Katarzyna Mazur-Hofsäß |
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Exhibit 99.5
| Copyright © 2025 BetaNXT, Inc. or its affiliates. All Rights Reserved styleIPC Instructions to The Bank of New York Mellon, as Depositary Bank Must be received prior to 5:00 p.m. EDT on May 12, 2025 (the “Cutoff Date”) The undersigned registered holder of one or more American Depositary Receipts (“Receipts”) of Fresenius Medical Care AG (the “Company”) hereby requests and instructs The Bank of New York Mellon, as Depositary Bank, to vote or cause to be voted in accordance with the instructions marked on the reverse side hereof, the number of shares of the Company represented by such Receipt(s) registered in the name of the undersigned on the books of the Depositary Bank as of the close of business on March 28, 2025, at the Annual General Meeting of Shareholders of Fresenius Medical Care AG to be held on May 22, 2025, in respect of the agenda items specified in the invitation to the Annual General Meeting. NOTES: 1. Please direct the Depositary Bank how to vote by placing an X in the box opposite the resolutions on the reverse side. 2. The Depositary Bank shall not vote or attempt to exercise the right to vote that attaches to the deposited Shares, other than in accordance with instructions given by owners and received by the Depositary Bank, save as provided in 3 below. 3. If no instructions are received by the Depositary Bank from an Owner with respect to a matter on or before the Cutoff Date and the Depositary Bank has received a written confirmation from the Company by the business day following the Cutoff Date that (x) the Company reasonably does not know of any substantial opposition to the matter and (y) the matter is not materially adverse to the interests of shareholders, then the Depositary Bank shall deem that Owner to have instructed the Depositary Bank to give a proxy to a person designated by the Company to vote the number of deposited shares represented by that number of American Depositary Receipts as to that matter as proposed and therefore recommended by the Company’s Management Board or the Company’s Supervisory Board; or, if no written confirmation has been provided by the company to abstain from voting as to that number of deposited Shares and that matter. FRESENIUS MEDICAL CARE AG PLEASE BE SURE TO SIGN AND DATE THIS PROXY CARD AND MARK ON THE REVERSE SIDE Fresenius Medical Care AG Annual General Meeting of Shareholders For holders of American Depositary Receipts of record as of March 28, 2025 Thursday, May 22, 2025 10:00 a.m., CEST Congress Center Messe Frankfurt, Ludwig-Erhard-Anlage 1, 60327 Frankfurt am Main, Germany BNY Mellon: PO BOX 505006, Louisville, KY 40233-5006 Internet: www.proxypush.com/FMS • Cast your vote online • Have your Proxy Card ready • Follow the simple instructions to record your vote Phone: 1-866-362-6716 • Use any touch-tone telephone • Have your Proxy Card ready • Follow the simple recorded instructions Mail: • Mark, sign and date your Proxy Card • Fold and return your Proxy Card in the postage-paid YOUR VOTE IS IMPORTANT! envelope provided PLEASE VOTE BY: 5:00 p.m. EDT May 12, 2025 Have your ballot ready and please use one of the methods below for easy voting: Your vote matters! Your control number Have the 12 digit control number located in the box above available when you access the website and follow the instructions. |
| Fresenius Medical Care AG Annual General Meeting of Shareholders Please make your marks like this: PROPOSAL YOUR VOTE Agenda FOR AGAINST ABSTAIN #P3# #P3# #P3# #P4# #P4# #P4# 1. Presentation of the adopted annual financial statements and the approved consolidated financial statements, the management reports for Fresenius Medical Care AG and the group, the explanatory report by the Management Board on the information pursuant to sec. 289a, 315a of the German Commercial Code (Handelsgesetzbuch) and the report by the Supervisory Board of Fresenius Medical Care AG for fiscal year 2024 No resolution to be passed under agenda item 1. 2. Resolution on the allocation of distributable profit 3. Resolution on the approval of the actions of the members of the Management Board of Fresenius Medical Care AG for fiscal year 2024 4. Resolution on the approval of the actions of the members of the Supervisory Board of Fresenius Medical Care AG for fiscal year 2024 #P5# #P5# #P5# 5.1 Election of the auditor and group auditor for fiscal year 2025 as well as the auditor for the potential review of the half-year financial report for fiscal year 2025 and other interim financial information #P6# #P6# #P6# 5.2 Election of the auditor of the sustainability reporting #P7# #P7# #P7# #P8# #P8# #P8# #P9# #P9# #P9# #P10# #P10# #P10# #P11# #P11# #P11# #P12# #P12# #P12# 6. Resolution on the approval of the compensation report for fiscal year 2024 7. Resolution on the cancellation of the existing authorized capitals, on the creation of a new authorized capital including the possibility of the exclusion of subscription rights as well as on corresponding amendments to Article 4 (3) and (4) of the Articles of Association of the Company 8. Resolution on the granting of an authorization to issue convertible bonds and/or bonds with warrants with the option of excluding subscription rights, on the creation of a Conditional Capital 2025 and on the corresponding amendment to the Articles of Association of the Company 9. Resolution on a new authorization of the Management Board to provide for the holding of a virtual General Meeting and on the corresponding amendment to Article 15 (3) of the Articles of Association of the Company 10. Resolution on an amendment to Article 10 (6) of the Articles of Association of the Company (language version of the minutes of the Supervisory Board) In order to protect the environment and better meet the changing user behavior of investors, the Company has decided to reduce the amount of paper used for this event to the extent possible. Therefore, please find below the web link to access the invitation to the Annual General Meeting and the additional documents: https://www.freseniusmedicalcare.com/en/agm/ A printed copy of the invitation to the Annual General Meeting and the additional documents may be obtained from Bank of New York Mellon, as Depositary Bank free of charge upon request. If you do not have access to the internet and would like to obtain a hard copy, please write to: BetaNXT, Inc. ATTN: Fresenius Medical Care AG - 2025 AGM P.O. Box 8016 Cary, NC 27512-9903 You may also request a hard copy of the materials by calling the toll free number 1-800-555-2470. Proposal_Page - VIFL Authorized Signatures - Must be completed for your instructions to be executed. Please sign exactly as your name(s) appears on your account. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy/Vote Form. Signature (and Title if applicable) Date Signature (if held jointly) Date |
