B _ Corporate Governance Potential impact of the legal disputes in the USA on Board of Management remuneration The legal disputes in the USA will, in addition to the negative impact on net income attributable to shareholders of the Asset Management division and the Group as a whole, because of failure of this element to meet the financial targets for the 2021 financial year, and through the agreement to a 10 percentage point discount on the individual contribution factor of all board members, also have negative implications for the bonus of the entire Board of Management. The distribution of the LTI in 2022 will be reduced, as well as the bonus payment. Furthermore, the legal disputes in the USA could also potentially have a clearly negative effect on the Board of Management’s long- term incentive. The long-term incentive is based on Allianz SE’s share price performance in absolute and relative terms. Following publication of the ad hoc announcement on 1 August 2021, the Allianz share fell by 8 % and at year-end 2021 traded only +3.5 % higher than at the start of the year. In the relative development (including dividends), the STOXX Europe 600 Insurance rose by +21 % compared to the +8 % performance of the Allianz share in 2021. The 12 % points underperformance is reflected with a factor of 2 in the Board of Management’s long-term incentive and could potentially reduce the payout by up to -25 %. Each long-term incentive plan has a four-year term. The relative performance achieved before 1 January 2021 or the future relative performance until the payment date are not taken into account in this exemplary analysis as at the reporting date of 31 December 2021. The relative performance in the reporting year impacts the long-term incentive from the 2020 and 2021 plans.1 The Supervisory Board and the Board of Management have initiated reviews in conjunction with the Structured Alpha subject as well as commissioning independent advisors to conduct external investigations. The various examinations were not yet concluded at the time of preparing this Remuneration Report. There are no findings so far of possible breaches of duty by the Board of Management. According to the remuneration system for members of the Board of Management, the Supervisory Board may wholly or partially reduce the annual bonus and/or LTI allocation amount or payout (malus) in the case of a significant breach of the Allianz Code of Conduct or other compliance provisions. If a breach of compliance is committed and/or infringed prior to payment of the annual bonus or the long-term incentive but is not identified until after payout, the Supervisory Board may wholly or partially reclaim the annual bonus or long-term incentive paid out (clawback). The Supervisory Board makes its decision on the basis of its professional judgment. In particular, the severity and impact of the breach, degree of culpability and any financial loss or reputational damage to the company that has occurred or is impending must be taken into account. 1_The relative performance is only reflected since the system conversion in performance year 2019. Annual Report 2021 − Allianz Group 39