The compensation report describes Sonova’s principles and system of compensation with its key components, as well as providing information about the method of determining the compensation of members of the Board of Directors and the Management Board. It also describes which bodies are responsible for the design of compensation plans, the approval framework, and the implementation process. Furthermore, it includes information on the Board of Directors’ organization and regulation. More information on topics, such as Board composition and evaluation, risk and compliance management, diversity, and corporate social responsibility to the Board of Directors can be found in the corporate governance report. The compensation report provides important information to be considered by the shareholders when voting on the proposed maximum aggregate total compensation of the Board of Directors and the Management Board, submitted for approval by the 2018 Annual General Shareholders’ Meeting. The abbreviations are summarized in a glossary at the end of this report.