Supervisory Board Meetings in 2022

The Management Board begins each regular Supervisory Board meeting by reporting on the overall economic situation and sector-specific economic expectations. It reports on the current business performance of NORMA Group and explains the earnings situation based on key indicators and their development compared to the previous year, the forecast and the budget.

The Management Board presents a detailed risk report at each regular meeting of the Supervisory Board and the Audit Committee. In this context, the risks affecting NORMA Group are assessed in each case at the level of the previous quarter with regard to their probability of occurrence and potential impact, taking countermeasures already initiated and any provisions into account. This risk reporting provides the Supervisory Board and the Audit Committee with a clear picture of the possible risks that could have a negative impact on the company’s asset, financial and earnings position.

Work-related accidents and measures implemented to improve occupational safety were also discussed at each Supervisory Board meeting, as were quality issues and aspects related to delivery reliability. In addition, the Supervisory Board deals with employee figures and personnel costs as well as CO2 emissions and energy consumption. Other topics discussed on an ongoing basis by the Supervisory Board and Management Board, in 2022 in particular, included the status of the “Get on track” change program and the introduction of ERP systems, and above all developments at the focus plants in the EMEA region (Maintal, Gerbershausen/Germany, Hustopeče/Czech Republic, Subotica/Serbia) as well as personnel changes on the Management Board and the Supervisory Board. The respective Chairmen reported to the Supervisory Board on the committee meetings. Following the meetings with the Management Board, the Supervisory Board held regular internal meetings at which the Management Board was not in attendance.

Ten meetings of the full Supervisory Board were held in 2022.

The first meeting in the reporting year at which the Supervisory Board dealt with the 2022 budget was held on January 7. All members of the Supervisory Board took part via video conference.

The meeting held in Frankfurt/Main on February 10, 2022, (closed meeting) was also attended by all Supervisory Board members, but on site. In addition to the usual topics, other matters were discussed, including M&A projects, succession planning for the Supervisory Board, the Management Board and the management level below the Management Board, dealing with supplier risks and securing supply chains, and preparations for a self-assessment of the Supervisory Board with the help of an external consultant.

The topics discussed at the meeting held on site in Maintal on March 17, 2022, included the Consolidated and Separate Financial Statements for 2021 and the Non-financial Group Report, the forecast for fiscal year 2022, the proposal for the appropriation of net income profit and preparations for the 2022 Annual General Meeting. This meeting was also attended by all participants.

A Supervisory Board conference was held by video conference on May 10, 2022, to exclusively discuss the possible acquisition of a company .

The Supervisory Board meeting on May 17, 2022, which was attended by all members on site in Frankfurt/Main following the Annual General Meeting, first dealt with the shareholders’ only narrow approval of the Remuneration Report and the underlying criticism of the Management Board’s remuneration. Measures to defend against cyber-attacks, an update of the product portfolio and the strategic orientation of NORMA Group as well as M&A projects were also addressed. In addition, the Supervisory Board set new targets for the share of women on the Management Board and the Supervisory Board and agreed that Mr. Wilhelms would take over Chairmanship of the Audit Committee from Dr. Michelberger as of September 1, 2022.

A meeting of the Supervisory Board was held by video conference on June 25, 2022, to discuss the development in NORMA Group’s EMEA region and the impact on the Group.

The decision not to extend the contract of the Chairman of the Management Board by mutual agreement was first discussed at the meeting on August 26, 2022. The Supervisory Board then discussed the forecast in detail, the changes since the meeting held on June 25, 2022, and the reasons for the forecast not being met. All members of the Supervisory Board attended this meeting on site in Frankfurt/Main.

On September 15, 2022, the Supervisory Board again intensively discussed the situation in the EMEA region and at the focus plants, among other topics. Two members of the Supervisory Board took part in this meeting via video conference, the others were present on site in Maintal.

At the meeting held on November 25, 2022, the Supervisory Board first discussed personnel issues and approved, among other items, the appointment of Mr. López Borrego as interim CEO, a settlement agreement with Dr. Schneider, and an offer of a contract extension to Mrs. Stieve. The members then discussed and approved the 2023 budget and medium-term planning. Other focal points of the meeting included quality indicators, the knowledge of Supervisory Board members on sustainability issues and the corresponding addition to the competence profile of Supervisory Board members, as well as the Declaration of Conformity with the German Corporate Governance Code. One member was connected via video conference at this meeting, while Mrs. Forst was unable to attend due to illness. The other members attended in person in Maintal.

The Supervisory Board met internally in Frankfurt/Main on December 13, 2022, without the Management Board in attendance. All members were in attendance at this meeting, except for Mrs. Forst, who continued to be unable to participate due to illness. Candidates for the Supervisory Board and the Management Board introduced themselves to the Supervisory Board. The Supervisory Board also discussed an adjustment to the remuneration system for the Management Board, which is also intended to take shareholder criticism of the current system into account.

The remuneration system for the members of the Management Board in general includes a comprehensive share purchase and share holding obligation and is thus geared towards aligning the interests of the Management Board and the shareholders as well as to the long-term and sustainable development of the company. In this context, the Management Board members are obliged to invest 75% of the net payouts from the Long-Term Incentive Plan, which is linked to the achievement of the NORMA Value Added (NOVA) target, in shares of the company and hold these for four years. The net payouts from the Long-Term Incentive Plan, which is linked to the achievement of the four-year ESG targets, must even be invested to 100% in shares of the company and held for at least one year.

Due to the business performance of the Company in recent years and the associated low or non-existent payouts under the NOVA-LTI, only small blocks of shares held by Management Board members are currently subject to the shareholding obligation. This will change in the near future as a result of the share purchase and shareholding obligation under the ESG-LTI, which will be paid out for the first time in 2024. In addition, the Supervisory Board will continue to monitor the share purchase and shareholding obligation of the members of the Management Board and, if necessary, adjust it when revising the compensation system for the Management Board members.

The Supervisory Board also passed other resolutions outside of meetings.

Outside of their meetings and conference calls, the Management Board report to the Supervisory Board on a monthly basis on how the business is developing for NORMA Group SE and the Group and provides an outlook for the current fiscal year. In addition to these monthly reports and the Supervisory Board meetings, the Chairman of the Management Board and the Chairman of the Supervisory Board regularly exchange views on important topics.