Corporate Governance of the Masterflex SE

Corporate planning and also corporate strategy take into account both financial and sustainability-related goals. The complete identification of all related risks and opportunities associated with the global activities of Masterflex SE as well as the analysis and evaluation of the effects on the company's activities is still ongoing. This also includes the processes and systems for recording and processing sustainability-related data.

The management report contains information on compliance, which has long been a regular subject of internal reporting. However, the management report does not comment on the adequacy and effectiveness of these systems.

The procedure for appointing the Executive Board follows customary standards on important personnel decisions and is designed with foresight by the Supervisory Board; however, it is not described in more detail in the corporate governance statement.

With three members, the Supervisory Board of Masterflex SE has so far been kept deliberately small in order to be able to pass resolutions efficiently, quickly and flexibly through lean structures - as is the case throughout the Group. The composition of the Supervisory Board with recognized experts is an important basis for Masterflex SE to work together in continuous dialog to set the course for successful corporate development. The establishment of committees, which would also have to be composed of at  least three members of the Supervisory Board, makes no sense against this background.

In Mr. van Hall, we have a proven financial expert as Chairman of the Supervisory Board. Dr. Link, another member of the Supervisory Borad, has expertise in the field of auditing. If the Supervisory Board consists of only three members, it is now also the Audit Committee in accordance with section 107 (4) sentence 2 of the German Stock Corporation Act (AktG) in the version applicable from July 1, 2021, which is why the Chairman of the Audit Committee and the Chairman of the Supervisory Board are then held by the same person on the basis of this legal fiction. If necessary, the Supervisory Board will also call on qualified external support to assess difficult issues.

The consolidated financial statements and the associated Group management report should be published within 90 days of the end of the financial year, which the company always complies with. Against the backdrop of a significant increase in regulatory requirements that has already taken place and is expected to continue, particularly from the EU, publication will be extended to a period of 120 days in future.

Masterflex SE is the only listed hose company which, in view of its internationality and group structure, is also relatively complex in relation to its revenue size. Therefore, there is currently no sufficiently representative and thus suitable selection of comparable companies, so that no peer group can be properly depicted. In the opinion of the Supervisory Board, the definition and disclosure of a representative peer group is therefore currently out of the question.  Irrespective of this, comparative analyses of the development of compensation have of course also been carried out and this is traditionally monitored with a sense of proportion, so that the compensation of the Executive Board is appropriate and customary. 

Insofar as an external compensation expert is considered necessary to assess the appropriateness of the Executive Board's compensation, attention is also paid to his independence. However, against the background of the expertise available on the Supervisory Board and the qualified support provided by the Company's legal advisors, it has not yet been considered necessary to additionally engage a separate independent compensation expert.

The long-term variable compensation (LTI) of the Executive Board members is not greater than the short-term variable compensation (STI) and is not share-based or invested in shares. The members of the Executive Board of the Company already hold a significant share in the Company's capital stock, which is why the long-term orientation of the variable compensation on the basis of the performance of the shareholding, as intended by the Code, is ensured in any case. As before, the members of the Executive Board can dispose of the variable amounts granted as LTI after three years, subject to continuous performance measurement over the entire assessment period, which also continues to reflect the characteristic of multi-year performance.

A so-called claw-back was not agreed with the members of the Executive Board, as from the point of view of the Company and in view of its previous management structure this would not have any separate effect on behavior, but from a risk perspective would regularly result in an increase in compensation.

As in the past, a change of control arrangement is provided for with the members of the Executive Board, which in the past also corresponded to a recommendation of the Code that the Company continues to regard as reasonable in the future. There will be no offsetting of payments in respect of a post-contractual non-competition clause agreed with the Company. There is also no offsetting of compensation for Supervisory Board mandates outside the Group, although the number of such mandates is limited and requires the prior approval of the Supervisory Board, which must also be notified of the compensation.