Scout24 : Compensation report for the 2023 financial year

Supervisory Board compensation

Comparative disclosures

Other statements

Letter of the Supervisory Board

Dear shareholders,

I am pleased to present the compensation report 2023 on behalf of the Supervisory Board and the Management Board of Scout24 SE. The compensation report describes the basic features and components of the compensation of Scout24 SE's Management Board and Supervisory Board as well as the personalised compensation granted and owed to the current and former members of these bodies. Dr Thomas Schroeter left the Management Board in the 2023 financial year. Sohaila Ouffata and Maya Miteva have replaced former members Christoph Brand and Peter Schwarzenbauer on the Supervisory Board.

In addition to the summary of the Company's performance in the 2023 financial year and to the resulting decisions of the Supervisory Board as regards the compensation of the Management Board, I would also like to explain below what measures the Supervisory Board has initiated following the disappointing result of the vote on the compensation report 2022.

Market environment and performance of Scout24 SE in the 2023 financial year

Scout24 SE managed to maintain its strong market position and continued to grow in the 2023 financial year. This was possible mainly because we were able to offer added value to all customer groups through our digital products in a dynamic and challenging market environment. We grew further in the 2023 financial year: We saw customer growth of 3.4% in the Professional segment and 17.7% in the Private segment. This is also reflected in the key financial performance indicators: the share price rose by approximately 37% in the 2023 financial year, while revenue grew by approximately 14% to EUR 509 million, and our ordinary operating EBITDA increased by approximately 21% and thus much faster than revenue. The Management Board and the Supervisory Board can look back on a strong 2023 financial year, which we must now build on in the 2024 financial year.

Compensation of the Management Board in the 2023 financial year

In the 2023 financial year, the compensation system approved by the Company's Annual General Meeting on 8 July 2021, with a majority of 91.9% of the votes, was applied unchanged. The compensation amounts were not adjusted in the 2023 financial year.

The fixed compensation forms the basis for the compensation of the members of the Management Board. It was adjusted consistent with market conditions in the 2021 and 2022 financial years. The fixed compensation is intended to reflect the position and responsibility of the members of the Management Board and to help ensure that the members of the Management Board are not incentivised to take inappropriate risks for financial reasons. The fixed compensation accounts for 25% to 30% of the target total compensation.

The members of the Management Board are primarily incentivised using variable compensation based on a clear pay-for-performance approach. The Supervisory Board has set ambitious targets for variable compensation. In accordance with the recommendations of the German Corporate Governance Code (GCGC), the long-term variable compensation (long-term incentive (LTI)), which accounts for around 50% of the target total compensation, clearly outweighs the short-term variable compensation (short-term incentive (STI)), which accounts for around 20% of the target total compensation and is thus conducive to the Company's sustainable and long-term development.

The short-term variable compensation is based on the financial criteria of revenue and ordinary operating EBITDA (ooEBITDA) to support the operational implementation of the corporate strategy within the financial year and Scout24 SE's sustainable and profitable growth. With the environmental, social and governance (ESG) targets - 'percentage of women in leadership' and 'percentage for international diversity' - the members of the Management Board are directly incentivised consistent with Scout24 SE's sustainability strategy. In the 2023 financial year, both the financial and non-financial criteria developed positively and above expectations overall, which is why the members of the Management Board reached the STI target achievement of 126%. This clearly shows that the pay-for-performance approach is working.

Scout24 | Compensation report 2023

Supervisory Board compensation

Comparative disclosures

Other statements

The long-term variable compensation (LTI), which was paid out in the 2023 financial year and is therefore reported as compensation granted, is based on the long-term incentive programme (LTIP) 2018. Taking into account the ambitious target, on the one hand, and the impact of the Covid-19 pandemic and the tense market situation following Russia's attack on Ukraine, on the other, the overall target achievement is 53% and 81%, respectively, depending on the allocation granted. This was offset by the positive share price performance, resulting in an overall payout ratio of 97% and 125%, respectively, for the LTIP 2018. For the 2023 financial year, the members of the Management Board will receive an LTIP tranche based on the LTIP 2021 that will be paid out after the end of the 2026 financial year. This also includes strategic targets consistent with the new system.

Response of the Management Board and the Supervisory Board to the vote of the Annual General Meeting regarding the compensation report 2022

The Management Board and the Supervisory Board have noted that the compensation report 2022 received only 32.2% of the votes at the 2023 Annual General Meeting and was thus rejected. In response, the Management Board and the Supervisory Board have produced an action plan to improve transparency and to disclose information in the compensation report. In this context, a governance expert roadshow was held with investors and key proxy advisors. Based on the feedback, the Management Board and the Supervisory Board analysed the compensation report 2022 together with independent, external consultants and took measures for the compensation report 2023. The criticism essentially related to three core aspects: information on the adjustment of fixed compensation implemented in the 2021 and 2022 financial years was insufficiently transparent; there was no background information on the selection and composition of the peer group; and there were no further explanations on the selection of financial and non-financial targets and their calibration.

We will describe the measures taken and how we dealt with the criticism in detail in the compensation report. The Management Board and the Supervisory Board have taken the points of criticism into account for the compensation report 2023. For example, we will explain in detail the selection of financial and, in particular, non-financial performance criteria as well as the selection and composition of the peer group. Additionally, we have set ourselves the goal of reporting even more transparently on compensation in the past financial year.

Outlook for the 2024 financial year

For the 2024 financial year, we expect the tense conditions in the real estate market to pose corresponding challenges for the Company and to its ability to maintain its high growth rate in this environment while continuing to develop a product portfolio tailored to its target groups. However, we also see opportunities for the Company and its innovative strength in this market environment. In this respect, the Company's objectives are also fully reflected in the compensation.

The continuous development of the successful growth strategy will be supported by an expansion of the Management Board: The Supervisory Board has appointed Dr Gesa Crockford to the Management Board as Chief Commercial Officer with effect from 1 April 2024. In this role, she will be responsible for the sales organization including the Customer Service, CRM and Sales Analytics divisions of Scout24.

The Supervisory Board / the Remuneration Committee

Scout24 | Compensation report 2023

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		Management
Criticism
	Board
compensation
report 2022	compensation

Supervisory Board compensation

Comparative disclosures

Other statements

Response to the criticism of the compensation report 2022

The current compensation system for the Management Board of Scout24 SE was approved by the Company's Annual General Meeting on 8 July 2021, with a majority vote of 91.9%. In contrast, the compensation report 2022 prepared in accordance with the requirements of Article 162 of the German Stock Corporation Act ('Aktiengesetz', AktG) obtained only 32.2% of the votes at the 2023 Annual General Meeting and was therefore not approved.

Our aim is to address the rejection, take our shareholders' feedback on board and ultimately achieve a positive result in the vote on the compensation report 2023 at the 2024 Annual General Meeting.

Following the rejection of the compensation report 2022, the Company immediately defined an action plan to address shareholders' expectations and increase transparency accordingly by adding information to the compensation report. With this in mind, investors and proxy advisors were approached as part of a governance expert roadshow after the 2023 Annual General Meeting. In the discussions, our General Counsel and our Vice President Investor Relations explained the background to the changes from the old to the new compensation system as well as the currently valid compensation system and its elements. In the course of this dialogue, the Company enquired about the respective reasons for the rejection and further details on the expectations of our shareholders and proxy advisors regarding the compensation report, which go beyond the legal requirements.

In essence, the feedback from our shareholders mainly consisted of the following points:

Explanations were requested concerning the increase in fixed compensation of the members of the Management Board, and how this increase came about in the current compensation system and whether or what other effects such an increase has.
Indication that more information was desired as to the link between the increase in fixed compensation and the development of employee salaries and inflation.
Desire for background information on the selection and composition of the peer group used to benchmark total compensation was sought.
Desire for explanations on the financial and non-financial performance criteria and the corresponding targets within the STI and LTI was expressed.

Based on these results and an in-depth analysis of the remuneration report in collaboration with an external team of consultants, we have developed a specific catalogue of measures to increase transparency and disclosure in our remuneration report. This catalogue of measures was presented to our investors by the Chairman of the Supervisory Board, Dr Hans-Holger Albrecht, and the Deputy Chairman of the Supervisory Board, Frank H. Lutz, as part of a corporate governance roadshow in January and February 2024 with our investors and main proxy advisors. In addition to providing further background information on the compensation report and on the compensation system, both Supervisory Board members were available to answer questions and obtain further feedback from investors and proxy advisors.

This compensation report already incorporates the outcome of the catalogue of measures. In the following, we clarify the increase in fixed compensation and the composition of the peer group. For a description of the selection of financial and non-financial performance indicators and their targets, see the }Variable components section.

Increase in fixed compensation and appropriateness of the target total compensation

Some shareholders informed us that the specific increase in fixed compensation of the members of the Management Board and how this came about was not sufficiently explained and that they lacked additional background information on the increase. It was also noted that no more detailed information was available on how the increase in fixed compensation related to the development of employee salaries. Accordingly, the table below compares the target total compensation under the current and previous compensation

Scout24 | Compensation report 2023

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		Management
Criticism
	Board
compensation
report 2022	compensation

Supervisory Board compensation

Comparative disclosures

Other statements

systems and the corresponding changes, each for a period of one calendar year for the Management Board members active in the 2023 financial year:

EUR '000

Fixed components

Fixed compensation

Ancillary benefits

Total

Variable components

One-year variable compensation (STI)

Multi-year variable compensation (LTI)

of which: LTIP 2018

of which: LTIP 2021

Total

Pension cost

Total compensation

Current comp. system (contract 2; 11/21-12/25)

1,016.0

18.0

1,034.0

694.0

1,810.0

N/A

1,810.0

2,504.0

75.0

3,613.0

Tobias Hartmann CEO since 11/2018

Previous comp. system (contract 1; 11/18-11/21)

680.0

14.0

694.0

340.0

2,200.0

N/A

2,540.0

50.0

3,284.0

Dr Dirk Schmelzer

CFO since 6/2019

Change (%)

49.4%

28.3%

49.0%

104.1%

-17.7%

-1.4%

50.0%

10.0%

EUR '000

Fixed components

Fixed compensation

Ancillary benefits

Total

Variable components

One-year variable compensation (STI)

Multi-year variable compensation (LTI)

of which: LTIP 2018

of which: LTIP 2021

Total

Pension cost

Total compensation

Current comp. system (contract 2; 7/22-06/26)

600.0

18.0

618.0

392.0

1,007.0

N/A

1,007.0

1,399.0

40.0

2,057.0

Previous comp. system
(contract 1; 6/19-06/22)		Change (%)

420.0		42.9%
14.0		28.3%
434.0		42.4%

210.0		86.7%
1,333.3	-24.5%
1,333.3
N/A
1,543.3		-9.4%
25.0		60.0%
2,002.3		2.7%

Ralf Weitz

CPTO (former CCO) since 12/2018

EUR '000

Fixed components

Fixed compensation

Ancillary benefits

Total

Variable components

One-year variable compensation (STI)

Multi-year variable compensation (LTI)

of which: LTIP 2018

of which: LTIP 2021

Total

Pension cost

Total compensation

Current comp. system (contract 2; 12/21-12/25)

680.0

5.6

685.6

450.0

1,167.0

N/A

1,167.0

1,617.0

50.0

2,352.6

Previous comp. system
(contract 1; 12/18-12/21)		Change (%)

400.0		70.0%
5.0		11.6%
405.0		69.3%

200.0		125.0%
1,666.7	-30.0%
1,666.7
N/A
1,866.7		-13.4%
25.0		100.0%
2,296.7		2.4%

Scout24 | Compensation report 2023

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		Management
Criticism
	Board
compensation
report 2022	compensation

Supervisory Board compensation

Comparative disclosures

Other statements

With effect from November and December 2021 and July 2022, the contracts of the members of the Management Board were extended by the Supervisory Board of Scout24 SE by four years in each case, following the expiry of the first three-year term of office and the corresponding service contracts. In the course of this extension, the contracts were renegotiated on the basis of and in accordance with the current, new compensation system. This renegotiation took particular account of the fact that the previous fixed compensation was not sufficiently competitive and was therefore not in the interests of the Company, as it was too low compared to total compensation. Furthermore, there will be no further increases during the term of the service contracts. The negotiated increases extend over a period of several years, in contrast to the regular (in the sense of annual) salary increases for employees.

The target total compensation of the members of the Management Board has been increased by around 10% (CEO), 2.7% (CFO) and 2.4% (CPTO) relative to the contracts of the first term of office. For example, this results in a calculated annual growth rate of approximately 1.4% for the CEO for the entire period of the two terms of office under consideration (11/2018 to 12/2025). See the overview above for details. To put this in perspective: looking at the salary development of employees1 pro forma over the period from 2018 to 2023, their annual growth rate is approximately 3.7%. This means that the development of total Management Board compensation is below the development of employee salaries.

In addition to the increase in the target total compensation made in negotiating the new contracts, the relative shares in target total compensation were weighted in accordance with the current compensation system; fixed compensation, STI and LTI in particular, had to be reallocated. On the one hand, the previous compensation system had a high weighting of the LTI and a correspondingly low weighting of fixed compensation. On the other hand, the variable compensation component LTI included a portion not directly related to performance in the form of retention share units. This needed both adjusting relative to the market and in line with the objective of the compensation - to ensure long-term and sustainable performance - as well as to consider the Company's development.

The individual compensation elements were thus reweighted in accordance with the structures provided for in the compensation system approved by the Company's Annual General Meeting on 8 July 2021, with a large majority of 91.9% of the votes:

The fixed compensation was increased; as a result of this increase, it is within the proportion of fixed compensation stipulated by the compensation system (approximately 25% to 30% of the target total compensation).
As a significant part of the variable compensation component, the LTI was restructured in such a way that the retention share units, which are not directly performance-related, have been eliminated, and the LTI consists entirely of variable performance share units (based on performance and share price). In addition, the relative share of the LTI in the target total compensation was reduced. In accordance with the system and consistent with the pay-for-performance principle, at least 60% was designed as variable compensation - specifically around 50% of compensation as long-term variable compensation and around 20% as short-term variable compensation - and c. 30% as fixed compensation including its corresponding components.

Furthermore, as part of the negotiations to extend the contracts under the new compensation system, the maximum compensation was capped at a lower level than previously (CEO from a maximum of EUR 10,716 thousand to EUR 6,500 thousand; other members of the Management Board from EUR 6,300 thousand and EUR 7,000 thousand, respectively, to EUR 4,000 thousand).

In addition, the contracts were supplemented with regard to further regulations in the current compensation system (e.g. share ownership guideline and penalty/clawback clause); for further information, see the }Other provisions relating to the compensation system section.

The development of the compensation system to the current system is right for the Company from the perspective of the Supervisory Board, with the involvement of independent external experts and in

Calculated as the average annual growth rate of salaries in employee comparison group 2. For definition, see section }Comparative presentation.

Scout24 | Compensation report 2023

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		Management
Criticism
	Board
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report 2022	compensation

Supervisory Board compensation

Comparative disclosures

Other statements

comparison, with peer group companies, as well as taking into account the investor perspective. The development of salaries and the weighting and structures of the individual components under this new system is also right. Three central elements should be noted in this respect:

The compensation must be predominantly performance-related - with at least two-thirds of the compensation in the form of performance-based compensation in STI and LTI, as well as additional penalty/clawback provisions and share ownership guideline, this element is met to a high degree.
The compensation must be appropriate and attractive in order to actively and passively attract, win and retain the right individuals for the Company for membership in the Management Board given the special market and competition - the Company's sustainable growth and innovation history indicates that this has been achieved with the current total compensation.
The fixed compensation must not be disproportionately underweighted relative to the market, as this may not only complicate the retention and acquisition of the right individuals, but it may actually harm the sustainable development of the Company at the expense of merely maximising the aspect of compensation over time.

With the increase in fixed compensation and simultaneous elimination of retention share units, the introduction of the penalty/clawback clause and the share ownership guideline as well as the adjustment of the total variable share, this has been achieved by balancing the various elements.

Background information on the selection and composition of the peer group

The Supervisory Board regularly reviews the amount of compensation agreed with the individual members of the Management Board and the maximum compensation, particularly before any significant changes are made.

To this end, the Supervisory Board assesses the compensation of the members of the Management Board of Scout24 SE on the basis of a vertical comparison with the compensation structure and employment conditions of the employees in the Company, and a horizontal comparison with the compensation structure and employment conditions of the peer group. The Supervisory Board uses what it considers to be a suitable peer group of companies to assess whether the compensation is at a customary level relative to other companies.

In selecting the peer group, the Supervisory Board, after reviewing various offers, was advised by reputable, independent external compensation experts, among others, Kienbaum Consultants International GmbH. The peer group currently consists of the following companies: Ascential plc, Auto Trader Group plc, CAR Group Limited, CompuGroup Medical SE & Co. KGaA, CTS Eventim AG & Co. KGaA, Evotec SE, Future plc, Global Fashion Group S.A., HelloFresh SE, Kontron AG, Nemetschek SE, New Work SE, q.beyond AG, REA Group Ltd., Rightmove plc, SNP Schneider-Neureither & Partner SE, Ströer SE & Co. KGaA, TeamViewer AG and United Internet AG.

The companies in the peer group were selected so that it contains growth companies that are comparable to Scout24 SE in terms of sector focus (focus on online platforms and software and IT companies) and in terms of revenue, number of employees and market capitalisation. The key here is to define, within the bounds of possibility, on the one hand, the scope of management responsibility in a comparable manner and, on the other hand, also to define the Company's position in the competition for management staff in a comparable manner. The Supervisory Board also paid attention to the comparable complexity of the peer companies' business models and also took international companies into account in the composition of the peer group. The peer companies are based in Europe and Australia, with the majority of the peer group companies based in Germany.

Scout24 | Compensation report 2023

Supervisory Board compensation

Comparative disclosures

Other statements

Compensation of the members of the Management Board

Compensation system for the members of the Management Board

Overview of the compensation system

The compensation system describes the basic features and components of the compensation of Scout24 SE's Management Board. It complies with the applicable statutory provisions of the German Stock Corporation Act (AktG) and the recommendations of the German Corporate Governance Code (GCGC).

The aim of the compensation system is to make a significant contribution to the sustainable and long-term continuation of Scout24 SE's success story. This is mainly premised on an appropriate performance-related compensation structure.

The current compensation system ('current compensation system') for the Management Board of Scout24 SE was approved by the Company's Annual General Meeting on 8 July 2021, with a majority vote of 91.9%, and became applicable for all members of the Management Board in the 2023 financial year. In accordance with Article 120a (2) AktG, the compensation system for members of the Management Board is published on the Company's website at }www.scout24.com/en/investor-relations/corporate-governance/ compensation.

Based on the compensation system presented to the Annual General Meeting, the Supervisory Board determines the specific target compensation of the members of the Management Board. In doing so, the Supervisory Board ensures that the remuneration is appropriate in relation to the tasks of the individual Management Board member, their personal performance, the economic situation, the success and the future prospects of the Company, taking into account the requirements of Section 87 (1) AktG.

The Supervisory Board regularly reviews the compensation of the Management Board in order to ensure the system is customary and competitive. The Remuneration Committee supports the Supervisory Board in this process by making preparatory recommendations.

As part of the review, the customary level of compensation is examined, among other things. In doing so, the Supervisory Board assesses the extent to which the compensation of Scout24 SE's Management Board is within customary bounds, taking into account the comparative environment (horizontal customary practice) as well as the compensation structure and employment conditions that otherwise apply in the Company (vertical customary practice). Companies that are comparable to Scout24 SE in terms of relevant criteria such as sector (focus on online platforms as well as software and IT companies) and size (measured by revenue, number of employees and market capitalisation) are used to assess horizontal customary practice. The majority of peer group companies are based in Germany, with a small number of international companies also included. For more detailed information on the peer group, see the }Response to the criticism of the compensation report 2022 section. Within Scout24 SE, the Executive Leadership Team and the workforce as a whole are referred to in assessing customary practice as part of a vertical comparison, both for the current situation and over time. The Executive Leadership Team is defined as the first management level below the Management Board (senior management), while the workforce consists of all employees below senior management level.

If the Supervisory Board identifies a need for changes as part of the regular review of the compensation system, it decides on the corresponding changes. In the event of significant changes, the compensation system is resubmitted to the Annual General Meeting for approval, but at least every four years. The compensation system is thus scheduled to be presented again for approval at the Annual General Meeting in 2025. In preparation, the customary practice and appropriateness will be reviewed again together with independent external experts, and the perspective of shareholders, investors and proxy advisors will be surveyed.

Scout24 | Compensation report 2023