Declaration of Compliance

Since submitting the Compliance Declaration of January 2023 - updated in July 2023 and September 2023 - KRONES Aktiengesellschaft has complied with the recommendations of the "Government Commission on the German Corporate Governance Code" appointed by the German Federal Government for the management and supervision of German listed companies in the version dated 28th April 2022 (which entered into force on 27th June 2022) in accordance with the German Corporate Governance Code published on the internet with the exception of the following deviations, and will continue to comply with the recommendations in the future with the exception of the following deviations:

Recommendation C.10 was not entirely complied with between 23rd May 2023 and 13th September 2023. This Recommendation states that the chair of the Supervisory Board, the chair of the Audit Committee and the chair of the committee responsible for Executive Board remuneration should be independent of the company and the Executive Board. The chair of the Audit Committee should also be independent of the controlling shareholder.

In the constitutive meeting of the examination and risk management committee on 23 May 2023, Norbert Broger was selected as committee Chairperson. Norbert Broger was the financial director of KRONES AG until 31 December 2022 and therefore, in the estimation of the Supervisory Board, cannot be classified as being independent from the corporation in the terms of the German Corporate Governance Code. The members of the Supervisory Board and of the examination and risk management committee were of the opinion that Norbert Broger was particularly suitable to carry out this position due to his immense professional expertise and experience in systems and mechanical engineering. On 13.09.2023 the Audit and Risk Management Committee of the Supervisory Board elected Matthias Winkler as its new Chairperson after the previous Chairperson of the Audit and Risk Management Committee, Mr Norbert Broger, had stood aside by mutual agreement with immediate effect. In the opinion of the Supervisory Board, Mr Winkler is independent of the company, the Executive Board and the controlling shareholder within the meaning of the German Corporate Governance Code. This means that there has been no deviation from Recommendation C.10 since 13.09.2023, nor will there be in the future.

A deviation from Recommendation C.10 was declared for the afore-mentioned time period. The temporary deviation expired on 13th September 2023. This recommendation will be complied with again in the future.

Recommendation D.4 is not met. This involves the creation of a nomination committee composed exclusively of shareholder representatives to appoint suitable candidates for the election of Supervisory Board members for the Supervisory Board's recommendation to the general meeting.

Boards are mainly useful when the size of a committee allows it to work more efficiently. In the KRONES AG Supervisory Board, eight members represent the shareholders who put forward suggestions regarding the selection of Supervisory Board members in the general meeting. We are of the opinion that the proven efficient co-operation of shareholder representatives in the Supervisory Board means that a separate nomination committee does not need to be formed. 

Recommendation G.10 is not met. It states that the remuneration contributions granted to the Executive Board member, while taking the respective tax burden into account, should be predominantly invested in company shares or invested in another corresponding equity-based option. The Executive Board member should only have access to the long-term, variable granted amounts after four years.

The variable remuneration contributions granted to Executive Board members are neither awarded in shares, nor must the Executive Board members predominantly invest them in KRONES AG shares. The Supervisory Board believes that the share price alone is not an adequate indicator for showing that the Executive Board is acting in the company’s interests. Rather, the variable remuneration arrangement should be taken into account commensurately. The Executive Board member can gain access to the long-term variable granted contributions after three years.

Recommendation G. 17 specifying that the longer time invested by the Chairperson of Supervisory Board committees should also be adequately considered, is also not met.

In the view of the Supervisory Board, the current additional remuneration for members of Supervisory Board committees is also reasonable and proportionate for the Chairpersons of those committees in light of the size of these bodies. This, however, does not apply for the Chairperson of the Audit and Risk Management Committee.

On behalf of the executive board and of the supervisory, Neutraubling January 2024

Second update of the Compliance declaration 2023

The Executive Board and Supervisory Board of KRONES AG submitted a declaration of compliance in accordance with Section 161, Paragraph 1 of the German Stock Corporation Act (AktG) in January 2023, last updating it in July 2023.

It has now been updated as follows:

The company has now been fully compliant with Recommendation C.10 again in respect of the chair of the Audit Committee since 13.09.2023. This Recommendation states that the chair of the supervisory board, the chair of the audit committee and the chair of the committee responsible for executive board remuneration should be independent of the company and the executive board. The chair of the audit committee should also be independent of the controlling shareholder.

On 13.09.2023 the Audit and Risk Management Committee of the Supervisory Board elected Matthias Winkler as its new chairman after the previous chairman of the Audit and Risk Management Committee, Mr Norbert Broger, had stood aside by mutual agreement with immediate effect. In the opinion of the Supervisory Board, Mr Winkler is independent of the company, the Executive Board and the controlling shareholder within the meaning of the German Corporate Governance Code. This means that there has been no deviation from Recommendation C.10 since 13.09.2023, nor will there be in the future.

Otherwise, the compliance declaration from January 2023 continues to apply without limitation.

On behalf of the executive board and of the supervisory, Neutraubling September 2023
 

First update of the Compliance declaration 2023 

The executive board and supervisory board of KRONES AG last submitted a compliance declaration in accordance with Section 161, Paragraph 1 of the Companies Act (AktG) in January 2023. The information was updated as follows:

Recommendation C.10 is no longer conformed to since 23/05/2023. This recommendation states that the chairman of the supervisory board, the chairman of the examining board and the chairman of the board responsible for executive board remuneration should be independent from the company and the executive board. 

In the constitutive meeting of the examination and risk management committee on 23/05/2023, Norbert Broger was selected as committee chairman. Norbert Broger was the financial director of KRONES AG until 31/12/2022 and therefore, in the estimation of the supervisory board, cannot be classified as being independent from the corporation in the terms of the German Corporate Governance Code. The members of the supervisory board and of the examination and risk management committee are of the opinion that Norbert Broger is particularly suitable to carry out this position due to his immense professional expertise and experience in systems and mechanical engineering. 

Otherwise, the compliance declaration from January 2023 continues to apply without limitation.

On behalf of the executive board and of the supervisory, Neutraubling July 2023

Declaration of Compliance of January 2023

The last Compliance declaration was issued in January 2022. Since this time, KRONES AG has complied with the recommendations of the "Government Commission on the German Corporate Governance Code" (GCGC) instituted by the German government regarding the management and supervision of German listed companies, as amended on 7th February 2017, pursuant to the German Corporate Governance Code published on the internet, with the following exceptions: 

Recommendation D.5 is not met. This involves the creation of a nomination committee composed exclusively of shareholder representatives to appoint suitable candidates for the election of Supervisory Board members for the Supervisory Board's recommendation to the general meeting.

Recommendation G.10 is not met. It states that the remuneration contributions granted to the Executive Board member, while taking the respective tax burden into account, should be predominantly invested in company shares or invested in another corresponding equity-based option. The Executive Board member should only have access to the long-term, variable granted amounts after four years.

Recommendation G. 17 specifying that the longer time invested by the chairman of Supervisory Board committees should also be adequately considered, is also not met. 

On 28 April 2022, the “Government Committee for the German Corporate Governance Code” presented a new version of the German Corporate Governance Code which came into effect through the German Federal Ministry of Justice and Consumer Protection’s publication in the German Federal Gazette on 27 June 2022. The Executive Board and Supervisory Board of KRONES AG declare that KRONES AG meets the recommendations and will do so in the future, with the exception of the following deviations:

Recommendation D.4 is not met. This involves the creation of a nomination committee composed exclusively of shareholder representatives to appoint suitable candidates for the election of Supervisory Board members for the Supervisory Board's recommendation to the general meeting.

Boards are mainly useful when the size of a committee allows it to work more efficiently. In the KRONES AG Supervisory Board, eight members represent the shareholders who put forward suggestions regarding the selection of Supervisory Board members in the general meeting. We are of the opinion that the proven efficient co-operation of shareholder representatives in the Supervisory Board means that a separate nomination committee does not need to be formed. 

Recommendation G.10 is not met. It states that the remuneration contributions granted to the Executive Board member, while taking the respective tax burden into account, should be predominantly invested in company shares or invested in another corresponding equity-based option. The Executive Board member should only have access to the long-term, variable granted amounts after four years.

The variable remuneration contributions granted to Executive Board members are neither awarded in shares, nor must the Executive Board members predominantly invest them in KRONES AG shares. The Supervisory Board believes that the share price alone is not an adequate indicator for showing that the Executive Board is acting in the company’s interests. Variable remuneration should rather also be accommodated for in a suitable manner. The Executive Board member can gain access to the long-term variable granted contributions after three years. 

Recommendation G. 17 specifying that the longer time invested by the chairman of Supervisory Board committees should also be adequately considered, is also not met. 

In the view of the Supervisory Board, the current additional remuneration for members of Supervisory Board committees is also reasonable and proportionate for the chairpersons of those committees in light of the size of these bodies. This, however, does not apply for the chairperson of the Audit and Risk Management Committee.

On behalf of the executive board and of the supervisory, Neutraubling January 2023

The Krones AG has complied with all recommendations of the "Government Commission on the German Corporate Governance Code" in the version of 16 December 2019 published by the Federal Ministry of Justice and Consumer Protection in the official section of the Federal Gazette since issuing the last Compliance Declaration in January 2021. The Executive Board and Supervisory Board of KRONES AG declare that KRONES AG meets the recommendations and will do so in the future, with the exception of the following deviations:

Recommendation D.5 is not met. This involves the creation of a nomination committee composed exclusively of shareholder representatives to appoint suitable candidates for the election of Supervisory Board members for the Supervisory Board's recommendation to the general meeting.

Boards are mainly useful when the size of a committee allows it to work more efficiently. In the KRONES AG Supervisory Board, eight members represent the shareholders who put forward suggestions regarding the selection of Supervisory Board members in the general meeting. We are of the opinion that the proven efficient co-operation of shareholder representatives in the Supervisory Board means that a nomination committee does not need to be formed. 

Recommendation G.10 is not met. It states that the remuneration contributions granted to the Executive Board member, while taking the respective tax burden into account, should be predominantly invested in company shares or invested in another corresponding equity-based option. The Executive Board member should only have access to the long-term, variable granted amounts after four years.

The variable remuneration contributions granted to Executive Board members are neither awarded in shares, nor must the Executive Board members predominantly invest them in KRONES AG shares. The Supervisory Board believes that the share price alone is not an adequate indicator for showing that the Executive Board is acting in the company’s interests. Variable remuneration should rather also be accommodated for in a suitable manner. The Executive Board member can gain access to the long-term variable granted contributions after three years. 

Recommendation G. 17 specifying that the longer time invested by the chairman of Supervisory Board committees should also be adequately considered, is also not met. 

In the view of the Supervisory Board, the current additional remuneration for members of Supervisory Board committees is also reasonable and proportionate for the chairpersons of those committees in light of the size of these bodies. This, however, does not apply for the chairperson of the Audit and Risk Management Committee.

On behalf of the executive board and of the supervisory, Neutraubling January 2022

The last compliance declaration was submitted on 22nd January 2020. Since this time, KRONES AG has complied with the recommendations of the "Government Commission on the German Corporate Governance Code" (GCGC) instituted by the German government regarding the management and supervision of German listed companies, as amended on 7th February 2017, pursuant to the German Corporate Governance Code published on the internet, with the following exceptions:

There is currently no agreed excess in a D&O insurance policy concluded for the Supervisory Board (no. 3.8 German Corporate Governance Code).

A specific excess for the insured parties has not been agreed because the Supervisory Board carries out its duties correctly at all times regardless of any excess.

The remuneration report is to provide specific information about the remuneration paid to the Executive Board in given model tables (no. 4.2.5 clause 5 and clause 6 German Corporate Governance Code).

In addition to ambiguities in the interpretation, there are doubts whether the additional use of the model tables enhances the clarity and general comprehensibility of the remuneration report as intended by the company in compliance with the requirements to accounting (see also no. 4.2.5 clause 3 of the Code).

KRONES AG does not currently have a nomination committee (no. 5.3.3 German Corporate Governance Code).

Boards are mainly useful when the size of a committee allows it to work more efficiently. In the KRONES AG Supervisory Board, eight members represent the shareholders who put forward suggestions regarding the selection of Supervisory Board members in the general meeting. We are of the opinion that the proven efficient co-operation of shareholder representatives in the Supervisory Board means that a nomination committee does not need to be formed.

The business and personal relationships of each of the candidates proposed to the general meeting for election to the enterprise, to the executive bodies of the company or to a major shareholder of the company are currently not disclosed (no. 5.4.1 clauses 5 and 6 German Corporate Governance Code).

In the view of the Supervisory Board, requirements of paragraphs 5 and 6 are unclear and vague in detail and may infringe the privacy of the persons concerned.

The remuneration does not take particular account of the chairing of Supervisory Board committees (no. 5.4.6 German Corporate Governance Code).

In the view of the Supervisory Board, the current additional remuneration for members of Supervisory Board committees is also reasonable and proportionate for the chairpersons of those committees in light of the size of these bodies.

On 16th December 2019, the “Government Committee for the German Corporate Governance Code” presented a new version of the German Corporate Governance Code which came into effect through the German Federal Ministry of Justice and Consumer Protection’s publication in the German Federal Gazette on 20th March 2020. The Executive Board and Supervisory Board of KRONES AG declare that KRONES AG meets the recommendations and will do so in the future, with the exception of the following deviations:

Recommendation D.5 is not met. This involves the creation of a nomination committee composed exclusively of shareholder representatives to appoint suitable candidates for the election of Supervisory Board members for the Supervisory Board's recommendation to the general meeting.

Boards are mainly useful when the size of a committee allows it to work more efficiently. In the KRONES AG Supervisory Board, eight members represent the shareholders who put forward suggestions regarding the selection of Supervisory Board members in the general meeting. We are of the opinion that the proven efficient co-operation of shareholder representatives in the Supervisory Board means that a nomination committee does not need to be formed.

Recommendation G.10 is not met. It states that the remuneration contributions granted to the Executive Board member, while taking the respective tax burden into account, should be predominantly invested in company shares or invested in another corresponding equity-based option. The Executive Board member should only have access to the long-term, variable granted amounts after four years.

The variable remuneration contributions granted to Executive Board members are neither awarded in shares, nor must the Executive Board members predominantly invest them in KRONES AG shares. The Supervisory Board believes that the share price alone is not an adequate indicator for showing that the Executive Board is acting in the company’s interests. Variable remuneration should rather also be accommodated for in a suitable manner. The Executive Board member can gain access to the long-term variable granted contributions after three years.

Recommendation G. 17 specifying that the longer time invested by the chairman of Supervisory Board committees should also be adequately considered, is also not met.

In the view of the Supervisory Board, the current additional remuneration for members of Supervisory Board committees is also reasonable and proportionate for the chairpersons of those committees in light of the size of these bodies.

On behalf of the executive board and of the supervisory, Neutraubling January 2021

"The Executive Board and the Supervisory Board of KRONES AG declare that they have complied with the recommendations of the "Government Commission on the German Corporate Governance Code" (GCGC) instituted by the German government regarding the management and supervision of German listed companies as amended on 7 February 2017 in accordance with the German Corporate Governance Code published on the website of KRONES AG, with the following exceptions:

There is currently no agreed excess in a D&O insurance policy concluded for the Supervisory Board (no. 3.8 German Corporate Governance Code).

A specific excess for the insured parties has not been agreed because the Supervisory Board carries out its duties correctly at all times regardless of any excess.

The remuneration report is to provide specific information about the remuneration paid to the Executive Board in given model tables (no. 4.2.5 clause 5 and clause 6 German Corporate Governance Code).

In addition to ambiguities in the interpretation, there are doubts whether the additional use of the model tables enhances the clarity and general comprehensibility of the remuneration report as intended by the company in compliance with the requirements to accounting (see also no. 4.2.5 clause 3 of the Code).

KRONES AG does not currently have a nomination committee (no. 5.3.3 German Corporate Governance Code).

Committees are useful mainly when the size of a body means its work thus becomes more efficient. Six representatives of shareholders sit on the Supervisory Board of KRONES AG and present proposals. We do not therefore believe it necessary to establish a nomination committee. The work in question is conducted by the standing committee.

The business and personal relationships of each of the candidates proposed to the general meeting for election to the enterprise, to the executive bodies of the company or to a major shareholder of the company are currently not disclosed (no. 5.4.1 clauses 5 and 6 German Corporate Governance Code).

In the view of the Supervisory Board, requirements of paragraphs 5 and 6 are unclear and vague in detail and may infringe the privacy of the persons concerned.

The remuneration does not take particular account of the chairing of Supervisory Board committees (no. 5.4.6 German Corporate Governance Code).

In the view of the Supervisory Board, the current additional remuneration for members of committees is also reasonable and proportionate for the chairpersons of those committees in light of the size of these bodies.

On behalf of the executive board and of the supervisory, Neutraubling January 2020

"The Executive Board and the Supervisory Board of KRONES AG declare that they have complied with the recommendations of the "Government Commission on the German Corporate Governance Code" (GCGC) instituted by the German government regarding the management and supervision of German listed companies as amended on 7 February 2017 in accordance with the German Corporate Governance Code published on the website of KRONES AG, with the following exceptions:

There is currently no agreed excess in a D&O insurance policy concluded for the Supervisory Board (no. 3.8 German Corporate Governance Code).

A specific excess for the insured parties has not been agreed because the Supervisory Board carries out its duties correctly at all times regardless of any excess.

The remuneration report is to provide specific information about the remuneration paid to the Executive Board in given model tables (no. 4.2.5 clause 5 and clause 6 German Corporate Governance Code).

In addition to ambiguities in the interpretation, there are doubts whether the additional use of the model tables enhances the clarity and general comprehensibility of the remuneration report as intended by the company in compliance with the requirements to accounting (see also no. 4.2.5 clause 3 of the Code).

KRONES AG does not currently have a nomination committee (no. 5.3.3 German Corporate Governance Code).

Committees are useful mainly when the size of a body means its work thus becomes more efficient. Six representatives of shareholders sit on the Supervisory Board of KRONES AG and present proposals. We do not therefore believe it necessary to establish a nomination committee. The work in question is conducted by the standing committee.

The business and personal relationships of each of the candidates proposed to the general meeting for election to the enterprise, to the executive bodies of the company or to a major shareholder of the company are currently not disclosed (no. 5.4.1 clauses 5 and 6 German Corporate Governance Code).

In the view of the Supervisory Board, requirements of paragraphs 5 and 6 are unclear and vague in detail and may infringe the privacy of the persons concerned.

The remuneration does not take particular account of the chairing of Supervisory Board committees (no. 5.4.6 German Corporate Governance Code).

In the view of the Supervisory Board, the current additional remuneration for members of committees is also reasonable and proportionate for the chairpersons of those committees in light of the size of these bodies.

On behalf of the executive board and of the supervisory, Neutraubling, 28 February 2019

"The Executive Board and the Supervisory Board of KRONES AG declare that they have complied with the recommendations of the "Government Commission on the German Corporate Governance Code" (GCGC) instituted by the German government regarding the management and supervision of German listed companies as amended on 7 February 2017 in accordance with the German Corporate Governance Code published on the website of KRONES AG, with the following exceptions:

There is currently no agreed excess in a D&O insurance policy concluded for the Supervisory Board (no. 3.8 German Corporate Governance Code).

A specific excess for the insured parties has not been agreed because the Supervisory Board carries out its duties correctly at all times regardless of any excess.

There is no anonymous whistleblower system in place at present no. 4.1.3 German Corporate Governance Code).

A dedicated system allowing employees and external third parties to report violations of law in the enterprise anonymously is being developed and is to be introduced in the enterprise soon.

The Executive Board shall be comprised of several persons and have a chairperson or spokesperson. Rules of procedure shall govern the work of the Executive Board, in particular the allocation of duties to individual Executive Board members, matters reserved for the Executive Board as a whole and the required majority for Executive Board resolutions (unanimity or resolution by majority vote) (no. 4.2.1 German Corporate Governance Code).

The rules of procedure for the Executive Board are set out in the Articles of Association of KRONES AG. These contain detailed instructions governing the work of the Executive Board. Separate written rules of procedure have therefore not been drawn up to date.

The remuneration report is to provide specific information about the remuneration paid to the Executive Board in given model tables (no. 4.2.5 clause 5 and clause 6 German Corporate Governance Code)

In addition to ambiguities in the interpretation, there are also doubts whether the additional use of model tables promotes the clarity and general comprehensibility of the remuneration report that are desired by the enterprise in compliance with accounting requirements (see also no. 4.2.5 clause 3 of the Code).

KRONES AG does not currently have a nomination committee (no. 5.3.3 German Corporate Governance Code).

Committees are useful mainly when the size of a body means its work thus becomes more efficient. Six representatives of shareholders sit on the Supervisory Board of KRONES AG and present proposals. We do not therefore believe it necessary to establish a nomination committee. The work in question is conducted by the standing committee.

The business and personal relationships of each of the candidates proposed to the general meeting for election to the enterprise, to the executive bodies of the company or to a major shareholder of the company are currently not disclosed (no. 5.4.1 clauses 5 and 6 German Corporate Governance Code).

In the view of the Supervisory Board, requirements of paragraphs 5 and 6 are unclear and vague in detail and may infringe the privacy of the persons concerned.

The remuneration does not take particular account of the chairing of Supervisory Board committees (no. 5.4.6 German Corporate Governance Code).

In the view of the Supervisory Board, the current additional remuneration for members of committees is also reasonable and proportionate for the chairpersons of those committees in light of the size of these bodies.

On behalf of the executive board and of the supervisory, Neutraubling, 19 February 2018