Compensation Report → B. Compensation of Managing Board members B.2 Principles of the determination of compensation B.2.1 Target compensation and compensation structure The Supervisory Board has determined, in accordance with the compensation system for the Managing Board members, the amount of each Managing Board member’s total target compensation for fiscal 2023. In making this determination, the Supervisory Board has ensured that the proportion of long-term variable compensation always exceeds that of short-term variable compensation and that the proportions of total target compensation represented by each of the individual compensation components are within the ranges defined in the compensation system. Composition of total target compensation TOTAL TARGET COMPENSATION FIXED COMPENSATION VARIABLE COMPENSATION Base salary Fringe benefits Short-term variable Long-term variable compensation compensation (Bonus) (Stock Awards) Pension benefit commitment •----------------------4 »----------------------• 36% to 43% 20% to 28% 30% to 42% of total target compensation of total target compensation of total target compensation The regular review of Managing Board compensation at the beginning of fiscal 2023 in order to determine the compensation’s appropriateness and conformity with customary market practices indicated that – when compared to the companies in the DAX 40, the German blue-chip stock index, that have been defined in the compensation system as the relevant market – the total target compensation of the members of the Managing Board of Siemens AG was positioned toward the lower end of the customary market ranges. Compared to the companies in the STOXX Europe 50, which is also used for a market comparison due to Siemens’ international footprint, direct target compensation was actually below the customary market range. Against this backdrop, the Supervisory Board approved an increase in the total target compensation of all Managing Board members as of October 1, 2022. This increase was implemented by raising the individual members’ Stock Awards target amounts. The Stock Awards target amount for Dr. Roland Busch was raised to €3,340,000 from €2,954,000, the target amount for Prof. Dr. Ralf P. Thomas was raised to €2,145,000 from €2,000,000, the target amount for Cedrik Neike was raised to €1,470,000 from €1,259,000, and the target amounts for the remaining Managing Board members were raised to €1,380,000 from €1,259,000. Due to the increase in the Stock Awards target amounts, variable compensation is structured on a more long-term basis, while compensation as a whole is oriented even more toward sustainable Company development. Regarding compensation, all components of the compensation of the position of President and CEO are differentiated. The target amount of Prof. Dr. Ralf P. Thomas’s Stock Awards is differentiated due to his particular responsibilities as CFO. The target amount of Cedrik Neike’s Stock Awards is also differentiated due to the outstanding business results of Digital Industries, the strategic importance of this Business for the further development of Siemens AG and Cedrik Neike’s five- years of membership on the Managing Board. The following table shows the individualized target compensation of each Managing Board member and the relative proportions of total target compensation represented by each of the individual compensation components. FISCAL 2023 10