According to article 12.2 of the By-laws, the Directors are elected for a three-year term.

To ensure the staggering of the Directors’ mandate terms, the Annual Shareholders Meeting of July 26, 2022 extended the term to four years for four Directors as an exceptional measure.

Compensation of Corporate Officers

The Board of Directors sets the compensation policies for the corporate officers in the best interests of Soitec.

The policies adopted are based on recommendations issued by the Compensation and Nominations Committee, which takes into account the principles set out in the AFEP-MEDEF Code (comprehensiveness, balance between compensation components, benchmarking, consistency, clear rules, and proportionality).

The Board thus ensures that the compensation policies are in line with Soitec’s best interests and in particular that:

• they are aligned with the Company’s overall business strategy and are compatible with the operating context;
• they support the Company’s financial, operational and sustainability strategy and competitiveness over the short, medium and long term;
• they are aligned with standard market practices for comparable companies.

Operating procedures and evaluation of Board operations

The operating procedures of the Company’s Board of Directors are governed by the applicable laws, regulations and recommendations, as well as by the Company’s By-laws and the Board of Directors’ Internal Regulation.

The Board of Directors meets whenever necessary and at least five times per year on average and bases its discussions and decisions on the work of its four Committees: the Strategic Committee, the Audit and Risks Committee, the Compensation and Nominations Committee and the Environmental, Social and Governance (ESG) Committee.

In accordance with the recommendations of the AFEP-MEDEF Code and the Board of Directors’ Internal Regulation, the Board of Directors performs an annual assessment of its composition, organization and functioning, as well as those of its Committees.

The ESG Committee shares the results of the assessment with the Compensation and Nominations Committee in the context of the review of the composition of the Board of Directors. The results of the assessment are also presented and discussed at a Board of Directors’ meeting. The results are presented to the shareholders each year in the corporate governance report.

The last evaluation confirmed that the Directors are satisfied with the functioning of the Board and of the Committees.

Independence of the Directors and business relations

Pursuant to Article 1 a) of its Internal Regulation, the Board of Directors shall use its best efforts to ensure that its composition, and in particular, its number of independent members, is in line with the recommendations of the AFEP-MEDEF Code.

Each year, the ESG Committee conducts a review of the independence status of the Board members based on independence questionnaires given to each of them. The ESG Committee’s recommendations following this review are subsequently presented to the Board, which then examines the situation of each Director.

The review revealed that the Board is composed of seven independent Directors representing 58% of independent Directors (excluding the member representing the employees).

The independence criterion of business relations is examined in two different stages. First, the ESG Committee and then the Board of Directors verify whether business relations actually exist. If business relations are found to exist, a more detailed review is conducted to assess whether or not they are significant, based on qualitative criteria (context, history and organization of the relationship, as well as the respective powers of the parties) and quantitative criteria (materiality of the relationship for the parties).

For more information, please refer to Chapter 4 of the Universal Registration Document of Soitec.