Compensation of the Executive Leadership Team

Compensation Development over Recent Years

This section outlines SMG’s growth journey and shows how the compensation framework has evolved in step with the Group’s strategic development.

Stage 1

The first stage began with the joint venture in 2021, and centred on establishing a clear identity for SMG as a digital pioneer with innovative products that simplify customer operations and strengthen their success. An essential focus was placed on building a highly capable Executive Leadership Team with a proven record of sustainable value creation.

The compensation structure at that time combined a competitive base salary with a short-term variable element. In addition, the Executive Leadership Team was invited to participate in the Group’s long-term success through a management incentive plan. The plan, with its clear focus on the IPO, encouraged participants to invest in the business by buying shares under the Management Equity Plan (MEP), reinforcing their commitment and securing their expertise for the future. It aligned leadership interests with the Company objective of delivering long-term value creation for shareholders. There was also a Phantom Stock Plan (PSP) with option-like instruments vesting over four years and settled in cash after the IPO.

Stage 2

SMG Holding became a publicly traded company on 19 September 2025. The focus of this stage is to continue executing a proven strategy supported by a strong product portfolio and a solid market presence.

With the listing on the SIX Swiss Exchange, the NCC enhanced the governance structure and introduced a compensation system that ensures alignment between the Executive Leadership Team and the broader shareholder base. It conducted a detailed peer group assessment to benchmark Executive Leadership Team compensation against listed companies. The Group also introduced a one-time IPO Long-Term Incentive Plan (IPO LTI) to further incentivise performance during the important post-IPO phase, while placing greater emphasis on total direct compensation in line with market standards. Additionally, the Group adjusted the Profit Growth Share Plan (PGSP) for all employees below Director level. Under the revised plan, the profit growth payout is granted in (blocked) shares, depending on the location.

Stage 3

Progress remains a key element of SMG’s identity. The Group actively looks ahead, preparing early for future challenges and opportunities to sustain momentum in its growth trajectory. The next stage of compensation evolution will focus on three priorities: long-term sustainability, consistent application of the compensation framework, and a clear link between pay and performance. Maintaining alignment between leadership incentives and shareholder interests is a fundamental objective. The introduction of a new LTIP for the Executive Leadership Team, described in Outlook for 2026, reflects this commitment.

As SMG further establishes its position as a publicly traded company, the Chairperson and members of the NCC will continue to interact closely with shareholders, investors and proxy advisors. The goal is to promote clarity and active engagement that enables the compensation system to evolve as the Group continues to grow.

Compensation Framework 2025

The table below details compensation for the Executive Leadership Team, made up of a fixed component, comprising annual base salary and pension and other benefits, and a variable component.

Overview of Executive Leadership Team Compensation

Fixed Compensation Components

Base Salary

The annual base salary is the main fixed compensation component paid to members of the Executive Leadership Team. The level is determined by the Board of Directors, based on the proposal of the NCC, taking into account the scope and responsibilities of the role. The base salary rewards the experience and expertise required to meet the demands of the position, while also reflecting the market value of the role in the location where the Group is competing for talent. It is paid in cash, generally in 12 equal monthly instalments.

Pensions and Other Benefits

Pension benefits provide financial security for employees and their dependents in the event of retirement, illness, disability, or death. The Executive Leadership Team participates in the social insurance and pension schemes applicable in the countries where their employment contracts are based. These plans reflect local market practices and legal requirements and meet or exceed the statutory provisions in each jurisdiction.

For members of the Executive Leadership Team, who are all employed under Swiss contracts, the Group’s pension arrangements exceed the minimum requirements of the Swiss Federal Law on Occupational Retirement, Survivors and Disability Pension Plans (BVG).

The Executive Leadership Team is entitled to certain benefits reflecting common market practice in their countries of employment, including company cars.

Variable Compensation Components

Short-Term Incentive Plan

The Short-Term Incentive Plan (STIP) is an annual cash incentive designed to align employee performance with SMG’s strategic and financial objectives which rewards the achievement of financial and non-financial goals.

The STIP incentivises participants based on the performance of the Group and, where applicable, their business unit (BU), as well as the achievement of strategic objectives. Financial performance targets account for 70% of the total target incentive, with strategic targets making up the remaining 30%. The strategic component may include Group-wide objectives designed to foster collaboration and alignment. Business unit-specific objectives are determined at business unit level. Generally, there are no more than three goals to ensure that the weighting per goal is at least 10%. Financial performance targets include Adjusted EBIT before PPA, which is derived from Adjusted EBITDA (refer to Alternative Performance Measures) and also takes into account depreciation, amortisation, and impairment of assets not capitalised through purchase price allocations (PPAs) in connection with business combinations, as well as adjustments related to reorganisations.

The individual target incentive amount for each Executive Leadership Team member is defined as a percentage of base salary (70% of base salary for the CEO and 50% of the respective base salaries for the other Executive Leadership Team members). This target amount reflects 100% achievement of the defined key performance indicators (KPIs). Actual payouts are determined by assessing performance against predefined KPI targets, aggregated according to their respective weightings. The total payout is capped at 150% of the target amount and may be reduced to zero if minimum performance thresholds are not met.

Specific KPI targets are commercially sensitive and therefore not disclosed.

IPO Long-Term Incentive Plan

The IPO LTI award is a one-time grant based on the design of the new LTIP, which will be introduced in 2026. It provides eligible employees with the opportunity to participate in the Company’s share price development. The performance period of the plan incentivises performance during the important post-IPO phase, aligning the interests of participants with those of the Company’s shareholders.

For the members of the Executive Leadership Team, the IPO LTI award is determined by the Board of Directors as a percentage of the base salary. The individual IPO LTI award grant value is divided into tranche A, which represents one-third of the award, and tranche B, representing the other two-thirds. Each tranche has distinct performance criteria and vesting periods. At the beginning of each vesting period, participants are granted a defined number of performance share units (PSUs) for the respective tranche, which represent a contingent right to receive shares of the Company in the future. The number of PSUs granted is based on the individual IPO LTI award grant value of the respective tranche in Swiss franc, as approved by the Board of Directors, and the reference price of one PSU at the grant date. For this one-time award, the reference price corresponds to the fair market value of a PSU based on the IPO offer price.

After each vesting period, a portion of the granted PSUs from the respective tranche vests based on the Group’s performance during that period. The number of PSUs that convert into Company shares may range from 0% to 200% of the initially granted units, depending on the achievement of two weighted performance conditions, one non-market condition and one market condition.

The non-market condition is based on cumulative Group Adjusted EBIT before PPA. For the tranche A award, performance is measured by this indicator for 2026, for the tranche B award, for 2026 and 2027.

Target achievement follows a defined curve, with minimum, target, and maximum levels determined by the Board of Directors prior to the award date for each performance period.

For tranche A, the range from target to minimum and maximum is +/–10% and for tranche B +/–15%, reflecting the increased uncertainty of the KPI over a longer period.

The maximum achievement of 200% applies when results are at or above the defined maximum, while an achievement of 0% applies when results are at or below the defined minimum. For outcomes between these levels, achievement is determined by linear interpolation.

The market condition is based on total shareholder return (TSR) relative to a predefined peer group³. The peer group consists of companies selected for their relevance in terms of business model and industry on an international basis, along with peers from the Swiss market to capture the local capital market environment. Performance is assessed by the Group’s percentile ranking within this peer group over the respective performance period. For the tranche A award, performance is measured from 19 September 2025 to 31 December 2026. For the tranche B award, performance is measured from 19 September 2025 to 31 December 2027.

Target achievement follows a defined curve, with the minimum (20th percentile), target (median), and maximum (80th percentile) levels set by the Board of Directors prior to the award date.

A 100% achievement applies when the Group’s TSR equals the median TSR of the peer group for the relevant performance period.

The maximum achievement of 200% applies when the Group’s TSR reaches or exceeds the 80th percentile within the peer group, while 0% achievement means the TSR is at or below the 20th percentile. For outcomes between these levels, achievement is determined by linear interpolation.

Vesting is determined by assessing each KPI individually within a range of 0% to 200% and aggregating the results according to their respective weightings. Strong performance in one area may offset weaker results in another; however, the overall payout factor is capped at 200% of units. At the end of each vesting period, the final number of PSUs determined by actual performance is settled in shares and the Group reports the level of target achievement and the resulting payouts.

Forfeiture provisions apply in the event of termination before the end of the vesting period of the IPO LTI award. In the event of a financial restatement due to material non-compliance with financial reporting requirements, or in cases of fraudulent behaviour or other wilful misconduct by a participant, the Board of Directors has the right to impose clawback measures.

Compensation Mix

The target compensation mix for the CEO and other members of the Executive Leadership Team in 2025 reflects SMG’s high-performance culture and focus on aligning Executive Leadership Team and shareholder interests.

A significant portion of compensation is performance-based and linked to the achievement of long-term goals, thereby strengthening sustainable value creation for shareholders. The high portion of the IPO LTI results from the fact that it rewards a longer period after the IPO and is compared with only a partial amount of a full-year base salary and STIP.

Compensation Mix for the CEO

in %

Compensation Mix for other Members

in %

Employment Conditions

Members of the Executive Leadership Team are employed under contracts of unlimited duration with notice periods of six months. Consequently, the benefits they receive are not disproportionate compared to other employees in the event of a change of control. Employment contracts may include post-employment non-competition clauses with a duration of up to twelve months.

Share Ownership Guidelines

To further align the interests of the Executive Leadership Team with those of the Company’s shareholders, share ownership guidelines were introduced for the Executive Leadership Team in the 2025 financial year. These guidelines are intended to strengthen the long-term alignment between leadership and shareholder interests.

Members of the Executive Leadership Team are expected to reach their respective ownership targets within five years of either the introduction of the guidelines or their appointment to the Executive Leadership Team. Only fully vested shares and shares purchased on the open market are considered toward meeting the requirement. The NCC reviews compliance with the guidelines annually. All Executive Leadership Team members already fulfil the requirements.

Compensation for 2025

The following table summarises the compensation paid to members between 19 September 2025 and the end of the financial year 2025. All members were part of the Executive Leadership Team for the entire period. Christoph Tonini, the CEO of the Company, is the member with the highest remuneration.

Compensation of the Executive Leadership Team (audited)

In line with Swiss reporting requirements, 2025 compensation for the Executive Leadership Team accrued prior to 19 September 2025 is not included in this Compensation Report.

Approved versus Awarded Total Compensation

At the Extraordinary General Meeting on 9 September 2025, the shareholders approved an overall amount of CHF 3,400 thousand for Executive Leadership Team compensation for 2025, covering the period between the IPO date and 31 December 2025. The overall amount includes base salary, STIP earned for the 2025 performance year, and the IPO LTI at grant value, as well as other compensation, benefits, and social security and pension contributions on the compensation paid or granted in the respective year.

The total amount of CHF 2,872 thousand is within the approved overall amount of CHF 3,400 thousand.

For the 2026 financial period, the shareholders approved an overall amount of CHF 9,700 thousand, which in contrast to 2025 covers a full year.

Further details regarding approval of the proposed compensation for the Executive Leadership Team for the financial year 2027 will be shared with the Annual General Meeting invitation.

Short-Term Incentive Plan 2025

Performance for the full year 2025 was considered in determining STIP target achievement. At the Group level, the EBIT target was exceeded, while revenue was slightly below the target level. Performance in the different business units varied significantly, which is reflected in the respective target achievement for each business unit.

The strategic targets were exceeded. One key driver was the “IPO readiness” objective set for the entire Group, which was exceeded following the successful IPO in 2025. Achievement of the additional business unit-specific goals varied, but exceeded target for all business units.

This overall strong performance results in STIP payout of 111.5% for the CEO and ranged between 97% and 131% for the other members of the Executive Leadership Team.