Deutsche Wohnen : Approval of the remuneration report for the 2023 fiscal year (Extract from the invitation to the AGM)

Annexes to the Invitation to the Annual General Meeting of Deutsche Wohnen SE at 10:00 hours on 6 May 2024

Deutsche Wohnen SE, Berlin

ISIN DE000A0HN5C6

WKN A0HN5C

1. Remuneration report for the 2023 fiscal year (Agenda Item 6)

Deutsche Wohnen SE

REMUNERATION REPORT 2023

1. Introduction

The remuneration report describes the principles and structure of the remuneration system for Deutsche Wohnen SE Management Board and Supervisory Board members. It explains the structure and amount of individual remuneration granted and owed to Management Board and Supervisory Board members for the 2023 fiscal year.

This Remuneration Report for the 2023 fiscal year has been prepared by the Management Board and Supervisory Board in accordance with the requirements of Section 162 of the German Stock Corporation Act (AktG). It complies with the recommendations of the German Corporate Governance Code (GCGC) as amended on April 28, 2022.

The Remuneration Report and the enclosed report on the formal and content-related review conducted by PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft can be consulted on the Deutsche Wohnen SE investor relationships website (https://ir.deutsche-wohnen.com/websites/de- wohnen/English/4600/remuneration.html).

1. Management Board Remuneration for the 2023 Fiscal Year

1. Regulatory Framework in Remuneration Reporting

The remuneration report for the 2022 fiscal year was prepared on the basis of the regulatory requirements of Section 162 AktG. The 2023 Annual General Meeting approved the 2022 Remuneration Report on June 15, 2023, with a majority of 98.6%.

Given the positive outcome of the vote and in the interests of consistency, the Management Board and Supervisory Board see no need to adjust the reporting method. The 2023 Remuneration Report will be submitted to the 2024 Annual General Meeting for approval by means of a consultative vote in accordance with Section 120a (4) AktG.

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2. Development of the Remuneration System

On June 2, 2022, the Annual General Meeting approved the remuneration system for the members of the Management Board of Deutsche Wohnen SE (2022 remuneration system) with a 96.9% majority. The remuneration system takes account of the company's membership of the Vonovia Group and the advanced integration measures that have since been implemented.

3. Overview of the Remuneration System

The remuneration system forms the basis for determining the remuneration of Deutsche Wohnen SE Management Board members. The remuneration system provides both fixed and variable remuneration components for each Management Board member. Combined, they make up the total remuneration.

Fixed remuneration components are paid irrespective of the company's perfor- mance. They consist of fixed remuneration and fringe benefits. Deutsche Wohnen SE does not grant pension benefits.

In order to promote performance (pay for performance), the variable remuneration components are tied to the achievement of short-term and long-term performance targets. These targets are linked to a short-term variable remuneration component (STI) and a long-term variable remuneration component (LTI). If a Management Board member achieves a 100% target achievement level for both the STI and the LTI, the total amount of these variable payments and the fixed remuneration as well as the fringe benefits make up the target total remuneration to be paid to the Management Board member in question.

Structure of Target Total Remuneration

By attaching a substantial weighting to the LTI, the remuneration structure supports Management Board work that focuses on the long-term, sustainable development of Deutsche Wohnen SE. Through the STI, the system also provides appropriate incentives for achieving annual operational targets.

When revising the Management Board remuneration system, the Supervisory Board not only took account of shareholder interests, but also considered the company's responsibility towards its customers and employees as well as the significance of the company's commitment to the greater good. The remuneration paid to the Management Board members promotes the corporate strategy and the company's sustainable development and, in particular, includes, non-financial ESG (environmental, social and governance) factors.

The remuneration system applied at Deutsche Wohnen SE in the 2023 fiscal year can be summarized as follows:

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4. Personnel Changes on the Management Board in the Fiscal Year

At the Supervisory Board meeting held on August 21, 2023, the Supervisory Board of Deutsche Wohnen SE appointed Eva Weiß as an additional member of the company's Management Board. She assumed her Management Board mandate effective September 1, 2023 and, as CDO (Chief Development Officer), is responsible for New Construction and Portfolio Investments, Technical Infra- structure, IT, Legal and Compliance, Sustainability and Public Affairs.

Ms. Konstantina Kanellopoulos left the Management Board of Deutsche Wohnen SE at her own request, and by amicable and mutual consent, effective Septem- ber 1, 2023. Lars Urbansky has since headed the management team as sole CEO. He remains responsible for Property Management, Facility Management, Customer Communication and Strategy, HR, Investment Management, Integration and the Care segment.

As CFO, Olaf Weber remains responsible for financing, accounting, controlling, investor relations and tax.

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5. Application of the Remuneration System in the 2023 Fiscal Year

5.1 Non-performance-related Remuneration Components

5.1.1Fixed Remuneration

Each Management Board member receives an annual base salary ("fixed remu- neration") for his or her work on the Board, which is paid in twelve equal monthly installments. The fixed remuneration also covers work at the level of subsidiaries. The amount of the fixed remuneration reflects the individual's role within the Management Board, the member's experience and area of responsibil- ity, the time that has to be spent on the Management Board work and market conditions.

5.1.2Fringe Benefits

Each Management Board member can also receive fringe benefits. These include the private use of a company car or - at the discretion of the Management Board member - a company car allowance as well as the provision of necessary equipment (e.g., communication means) for the performance of duties. Any private use of a company car is taxed as a non-cash benefit. The Management Board member bears the tax attributable to private use as a non-cash benefit. The costs associated with running a company car are borne by Deutsche Wohnen SE. Deutsche Wohnen SE can also pay 50% of the Management Board member's contributions to private health and long-term care insurance, but no more than the maximum employer's contribution to statutory health and long-term care in- surance.

The Supervisory Board can grant other or additional fringe benefits that are standard market practice.

In addition, Management Board members are covered by a standard D&O insurance policy. In accordance with the third sentence of Section 93 (2) (3) AktG, the Management Board members' deductible under the D&O liability insurance is 10% of the damage or one and a half times the fixed annual remuneration.

5.2 Variable Remuneration Components

The performance-related, variable remuneration components account for most of the remuneration paid to Management Board members. They are aligned with both the achievement of annual operational targets and the long-term, sustainable development of Deutsche Wohnen SE. The STI and LTI allow Management Board members' performance to be evaluated from different perspectives and over different periods (performance periods).

The STI and LTI differ in the financial and non-financial performance criteria used to measure the payout. When selecting the performance criteria, the focus is on implementing the corporate strategy. The performance criteria support the growth strategy of Deutsche Wohnen SE in particular while at the same time in- centivizing an increase in profitability and competitiveness. By considering various transparent performance criteria, it is therefore possible to depict the success of Deutsche Wohnen SE in an integrated and multifaceted manner.

In order to consistently pursue the pay-for-performance concept, performance criteria tend to be ambitious.

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5.2.1Short-term Incentive (STI)

STI Framework for the 2023 Fiscal Year

The Management Board members are entitled to short-term variable remuneration in the form of an STI for each of the company's fiscal years. The amount of the STI depends on the extent to which certain corporate targets defined by mutual agreement between the Supervisory Board and the Management Board member are achieved. In addition, the Supervisory Board may define performance targets with individual or all Management Board members, which are included in the target achievement level in the form of a personal performance factor (PLF) as a multiplier with a value of 0.8 to 1.2. Individual performance targets can also be set for a group of several Management Board members. If the employment contract does not cover the entire fiscal year, the STI is generally paid and pro-rated for the term of the employment contract in the relevant fiscal year. The target achievement level for the payout of the STI is determined on the basis of the following performance criteria:

• Group Funds from Operations (Group FFO)
• Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA)
• Any individual performance targets

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STI Performance Criteria for the 2023 Fiscal Year

Achievement of Financial Performance Targets

The two financial performance criteria Group FFO and Adjusted EBITDA relate to material operational corporate targets that reflect the company's financial suc- cess. The Group FFO considers, in relation to Deutsche Wohnen SE, the earnings contributions made by all segments (currently Rental, Value-add, Recurring Sales and Development) and, together with Adjusted EBITDA, is one of the most important key figures within the Deutsche Wohnen Group. In the STI, the Group FFO represents the performance criterion for the company's earnings capacity. Adjusted EBITDA consists of EBITDA after adjustments to reflect effects that do not relate to the period, recur irregularly or are atypical for business operation. A distinction is made here between the Adjusted EBITDA of the relevant segments and the Adjusted EBITDA Total, which results from the total of the Adjusted EBITDA for the relevant segments. The Adjusted EBITDA reflects the overall performance of the sustained operating business of Deutsche Wohnen SE before in- terest, taxes, depreciation and amortization.

By adjusting the Adjusted EBITDA Total for the current interest expense and deducting for special circumstances, current income taxes and consolidation ef- fects, we arrive at the Group FFO, which describes the sustained operating earnings power of Deutsche Wohnen SE. The Group FFO is a key indicator not least because financing is a fundamental component for the success of Deutsche Wohnen SE's business activities. Creating incentives for the Group FFO and the Adjusted EBITDA are therefore key to the success of Deutsche Wohnen SE.

The Supervisory Board has determined a budget value as well as a minimum and maximum value on the basis of the business plan. If the performance criterion is entirely consistent with the predetermined budget value, this is equivalent to a target achievement level of 100%. If the performance criterion is equal to or below the minimum value, the target achievement level is 0%. If the performance criterion is equal to or above the maximum value, the target achievement level is 125%. The target achievement level is always interpolated on a straight-line basis between the above-mentioned values.

Target	Group FFO target achievement curve
achievement
125 %
100 %
0 %
-9,6 %	0,0 %	4,2 %

Devia�on in percentage points

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The target achievement curves reflect the rigorous pay-for-performance concept inherent to the Management Board remuneration system of Deutsche Wohnen SE. The following table shows the target values and the actual values of the performance criteria reached in the 2023 reporting year as well as the resulting target achievement levels of the STI for the 2023 fiscal year.

STI 2023 target achievement				Budget value				Actual				Deviation in %					Target
Deutsche Wohnen				in € million				in € million								achievement
Group FFO			586,1				564,7				-3,65%					62,0%
Adjusted EBITDA			705,4			679,4				-3,69%					61,6%

Achievement of Individual Targets

The individual performance of a Management Board member is assessed on the basis of the individual performance criteria. Since the Supervisory Board has not defined individual performance targets for the 2023 fiscal year, the personal performance factor is 1.0.

Overall Target Achievement and Payout from the STI for the 2023 Fiscal Year

The following table summarizes the target achievement levels and the payout amounts per Management Board member:

STI 2023 summary	Target		Minimum			Maximum			Target achievement			Target achievement			Personal			Total target			Payout amount
amount		amount			amount			Group FFO in %			Adj. EBITDA in %			performance			achievement
Deutsche Wohnen														in € k
in € k		in € k			(cap) in € k			(75% weighting)			(25% weighting)			factor			in %
Lars Urbansky			318,0		-			397,5			62,0%			61,6%			1,0			61,9%		196,8
Konstantina Kanellopoulos (until August 31,	2		37,1		-			46,3			62,0%			61,6%			1,0			61,9%			22,9
Olaf Weber			22,7		-			28,4			62,0%			61,6%			1,0			61,9%			14,1
Eva Weiß (as of September 1, 2023)			7,6		-			9,5			62,0%			61,6%			1,0			61,9%			4,7

5.2.2Long-term Incentive (LTI)

In addition to the STI, the members of the Management Board are granted an annual LTI by Deutsche Wohnen SE with a long-term incentive effect and a bal- anced risk-return profile. The LTI is structured as a performance cash plan, is measured over a four-year performance period and its amount depends on the achievement of specific financial targets and also on the achievement of specific sustainability targets.

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LTI - Mechanism and Weighting

The Management Board members are granted an LTI tranche at the start of each fiscal year. The target amount for the LTI payout (in the event of 100% target achievement) is defined in the employment contracts concluded with the Management Board members. The actual LTI amount paid out at the end of the four- year performance period depends on the target achievement level for the following performance criteria. If the employment contract does not cover the entire fiscal year, the LTI is generally to be granted pro-rated for the term of the employment contract in the relevant fiscal year. The target amounts, minimum and maximum values, adhering to the cap (250% of the LTI target amount) defined as part of the remuneration system, are set out in the table below:

LTI tranche 2023 allocation	Grant value								Minimum value								Maximum value
in € k								in € k								(cap) in € k
Lars Urbansky							636,0								-								1.590,0
Konstantina Kanellopoulos (until August 31, 20	74,1							-							185,3
Olaf Weber				45,4					-					113,4
Eva Weiß (as of September 1, 2023)			15,1			-			37,8

The actual payout amount, which is determined at the end of the 2026 fiscal year, is calculated based on the target amount and the target achievement level during the performance period. The target achievement level is determined based on the following financial and non-financial performance criteria:

• NAV (net asset value) per share
• Group FFO (Funds from Operations) per share
• ESG target (CO2 intensity)

These are added up and each have an equal weighting of one-third.

The financial performance criteria NAV per share and Group FFO per share create incentives for a long-term increase in the value of the company. This aligns the interests of the Management Board with those of shareholders.

In addition, target achievement is also determined on the basis of sustainability criteria (ESG targets). Setting ESG targets allows the company to take the interests of other stakeholders into account.

The LTI mechanism is summarized in the figure below:

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All performance criteria are equally underpinned by ambitious target achievement curves, whose possible target achievement levels cover a range of between 0% to 250%. The Supervisory Board defines a target value for each performance criterion at the start of each performance period, where the target achievement level comes to 100%. In addition, a minimum and maximum value are defined. If the value actually achieved is equal to the minimum value, the target achievement level comes to 50% and if it is below it, the target achievement level comes to 0%. Where the value is equal to the maximum value, the target achievement level is limited to 250%. The target achievement level is interpolated on a straight-line basis between the above-mentioned values.

At the end of the relevant performance period, an overall target achievement level is defined based on the individual target achievement levels and their respective weightings. The LTI payout amount cannot exceed 250% of the grant value for the LTI tranche concerned ("cap").

In line with recommendation G. 11 sentence 1 GCGC 2022, the Supervisory Board has the possibility to account for extraordinary developments to an appropriate extent to maintain or restore the original value ratios.

The payout for each performance period is made as part of the next possible payroll run following adoption of the company's annual financial statements after the end of the performance period concerned, but by no later than December 31 of the fiscal year following the end of the performance period.

2023 LTI Tranche Performance Criteria

NAV per share

The first financial performance criterion, NAV per share, is one of the main management indicators for Deutsche Wohnen SE. It reflects the value of the property assets and the modernization and new construction measures and is therefore a decisive factor in the company's performance. To calculate the NAV per share, deferred taxes on investment properties are added to the equity attributable to Deutsche Wohnen's shareholders before deducting the fair value of derivative financial instruments, goodwill and intangible assets. The NAV calculated in accordance with this criteria is divided by the number of shares as of the reporting date (reporting date value NAV to reporting date value shares - non-diluted).

Group FFO per share

The Group FFO is also highly relevant to the management of Deutsche Wohnen SE. Apart from the importance of strong annual operational earnings power, creating incentives for a sustained and long-term increase in income is impactful. Therefore, the performance criterion Group FFO per share is included in the LTI. The focus in the four-year performance considerations is on the long-term development of the Group FFO.

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ESG

In addition to the financial targets, the payout from the LTI is also calculated on the basis of non-financial performance criteria in the form of ESG targets. This ensures that other significant non-financial targets - which are key components of the corporate philosophy - are given appropriate consideration. ESG targets generally refer to environmental, social and governance matters and are of fundamental importance for Deutsche Wohnen SE's long-term, sustainable growth. The consideration of ESG targets takes account of input factors for sustainable corporate development.

The ESG targets are set by the Supervisory Board at the start of each performance period. They can vary from performance period to performance period in order to allow more targeted incentives to be set. Particular attention is paid to strategy relevance, transparency and measurability when setting the targets. At the beginning of the 2023 fiscal year, the Supervisory Board set the CO2 intensity of the real estate portfolio as the ESG target for the 2023-2026 tranche.

Target achievement is measured as follows based on the growth rate of the two financial performance criteria and the non-financial ESG target (CAGR) for the period from 2023 to 2026:

The actual values and resulting target achievement levels will be published at the end of the performance period of the 2023 LTI tranche as of December 31, 2026, in the remuneration report for 2026.

6. Reclaim (Clawback) and Reduction (Malus) of Performance- related Remuneration

The contracts of employment of Management Board members of Deutsche Wohnen SE include malus and clawback provisions that provide for a reduction (malus) or reclaim (clawback) of variable remuneration components at the reasonable discretion of the Supervisory Board. This option exists if a Management Board member demonstrably breaches his or her duties to an extent that is conducive to a legally binding termination for cause or demonstrably breaches his or her material due diligence requirements under Section 93 of the German Stock Corporation Act (AktG) either intentionally or through gross negligence.

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