3.3 Clawback provisions As part of the Givaudan compensation programme and ensuring appropriate risk management, all incentive-based compensation (Annual Incentive Plan and Performance Share Plan (PSP)) is subject to clawback provisions. The respective plan rules provide the Compensation Committee with absolute discretion to cancel any payouts that would otherwise be due, including for reasons linked to an individual’s performance or behaviour. With regard to the PSP, this means that any right to receive Givaudan shares at the end of the vesting period will lapse if such a determination is made by the Compensation Committee. In 2021, the Compensation Committee did not exercise clawback for any current or former Executive Committee members. 3.4 Base salary Base salaries are established on the basis of the scope and responsibilities of the function, the external value of the role and the profile of the incumbent in terms of skills, experience and individual performance. To ensure market competitiveness, base salaries are reviewed annually. Base salary adjustments (if any) are based primarily on market evolution, taking into consideration the executive’s performance and contribution to Company results. 3.5 Annual Incentive Plan The Annual Incentive Plan is designed to reward managers’ and executives’ individual performance and contribution to Givaudan annual objectives. Performance criteria In 2021, the Annual Incentive Plan for Executive Committee members was based on the following performance criteria: – Sales growth targets in local currencies: 50% – EBITDA margin targets: 50% For the purpose of the Annual Incentive Plan, EBITDA is expressed as a percentage of sales. Measurement at Group level is considered, except where divisional level is more appropriate having regard to the members’ scope of responsibility. Givaudan’s compensation system has been designed for alignment with the Company’s vision and strategy and enshrines the principles of pay for performance. To provide shareholders the ability to assess this performance link and in line with Givaudan’s commitment to transparency, the Company discloses ex-post the overall payout factor under its variable pay plans. The disclosure approach protects the Company’s commercially sensitive, forward-looking information. Provision of such information, such as relating to Annual Incentive Plan performance targets, could otherwise put the Company and its shareholders at a competitive disadvantage. Details of the Performance Share Plan threshold, targets and maximum are presented in the Compensation report. Annual incentive payouts for managers and executives below the Executive Committee level are based on a mix of organisational performance objectives, cascaded from Givaudan Group objectives, and individual performance, taking into consideration achievement of personal objectives, day-to-day job responsibilities and the demonstration of behaviours in line with the Givaudan core values. Incentive targets, caps and payouts Expressed as a percentage of base salary, annual incentives at target were the following in 2021: – Chief Executive Officer: 100% – Chief Financial Officer and Division Presidents: 80% – Other Executive Committee members: 60% – Division Management Committee members: 35% – 50% – Other executives and managers: 10% – 35% Based on the performance achievements, incentive payouts may vary between 0% and a cap of 200% of target incentive. Minimum threshold achievement is required, otherwise no annual incentive is paid. In 2021, sales growth and EBITDA was above target. This resulted in 152% of target payout for the Chief Executive Officer, and an average of 153% for the other members of the Executive Committee. Table V summarises historical annual incentive achievement against target since 2018. Reflecting business and individual performance Governance Report Compensation Report Consolidated Financial Report Statutory Financial Report Appendix 27 Givaudan — 2021 Governance, Compensation and Financial Report