Compliance with the German Corporate Governance Code and declarations of compliance

Linde AG follows the German Corporate Governance Code presented by the ‘Government Commission on the German Corporate Governance Code’ and as amended from time to time. In March 2014, the Executive Board and Supervisory Board of Linde AG issued a declaration of compliance with the recommendations of the German Corporate Governance Code as amended on 13 May 2013 in accordance with § 161 of the German Stock Corporation Law (AktG) and made this declaration permanently available to the public on the Linde website.

There were no changes or additions to the German Corporate Governance Code after the submission of the declaration in March 2014. On 24 June 2014, more detail was added to the explanations given in the model tables for the presentation of management board members’ remuneration in the Appendix to the German Corporate Governance Code. These clarifications entered into force upon their publication in the official section of the German Federal Gazette on 30 September 2014. The Executive Board and Supervisory Board studied the requirements of the German Corporate Governance Code as amended on 13 May 2013 and 24 June 2014 in detail before issuing the following declaration of compliance in March 2015.

“The Executive Board and the Supervisory Board of Linde AG declare in accordance with § 161 of the German Stock Corporation Law:

All the recommendations of the ‘Government Commission on the German Corporate Governance Code’ as amended from time to time have been complied with since the last declaration of compliance and – except for the following exception – will be complied with in future.

Clause 4.2.3 para 2 sentence 6

In accordance with clause 4.2.3 para 2 sentence 6 of the German Corporate Governance Code the Executive Board members’ remuneration in total and as to its variable components should be capped at a given maximum amount. Employment contracts with Executive Board members do not include a ceiling for the Executive Board members’ total remuneration; variable components are capped as is described below.

The components of the variable cash emoluments are limited in terms of amounts. The Long Term Incentive Plan which provides for remuneration in the form of options to purchase shares (performance shares) and bonus shares linked to personal investment (matching shares) has a cap in terms of amounts at the time of the granting of option rights and matching shares rights. However, the value of the performance shares and matching shares after a multi-year qualifying period is not limited in terms of amounts. An additional cap like that was not deemed appropriate. In such a case, the synchronisation of interests of shareholders and Executive Board members to be achieved by share-based remuneration would be disrupted, which in our opinion would not be in the shareholders’ interest.

Since in future the value of the performance shares and the matching shares after expiration of a multi-year qualifying period are not to be capped, a ceiling for the remuneration amount will not be set in future.”

The current declaration of compliance and all past declarations of compliance with the German Corporate Governance Code are available on the company’s website.

Linde AG also complies with the suggestions made in the Code, with only one exception:

The Code suggests that it should be possible for shareholders to follow the Annual General Meeting via modern communication media (e. g. the Internet). We transmit the opening remarks made by the Chairman of the Supervisory Board and also the Chief Executive Officer’s speech, but not the general discussion. In principle, the articles of association permit the transmission of the Annual General Meeting in full via electronic media. However, out of respect for shareholders’ privacy, we do not transmit the contributions of individual speakers. Nevertheless, we will continue to follow developments closely.