Introduction

The Sunrise compensation framework is based on the Sunrise values of fairness, transparency and customer orientation and is aligned with the Sunrise strategy and financial goals. It applies to all employees, including the Group Management Board, and aims at attracting, motivating and retaining talent. It rewards short- and long-term success, both in terms of the performance of the company as a whole as well as the individual’s contributions to the business, thus fostering a culture of high performance. Compensation is subject to a formal annual performance management process with the purpose of aligning individual, team and organizational targets.

With the initial public offering (IPO) of February 6, 2015, the Sunrise compensation models were reviewed and new long-term incentive plans were introduced to balance short- and long-term commitment and compensation, as well as to ensure the continued alignment of the interests of the management and employees, shareholders and other stakeholders. The long-term incentive plans offer Group Management Board and selected Other Top Management members the opportunity to invest a portion of their short-term incentive into shares as a way to participate in the long-term success ofSunrise.

In 2015 Sunrise achieved its qualitative goals and was successful in acquiring new residential as well as business customers, strengthening customer satisfaction and improving the quality of its infrastructure. Nevertheless, the company’s financial targets were not fully achieved. This is reflected in the lower individual payout to Group Management Board members. In order to increase efficiency, further improve service delivery, boost customer satisfaction and set basis for growing customer base, a significant reorganization took place at the end of Q3 to prepare for strategic challenges and increased competitive market conditions.

The 2015 Compensation Report will be submitted for an advisory vote by the shareholders at the Annual General Meeting on April 15, 2016. Shareholders will thus have an opportunity to express their opinion on how the Board of Directors has determined actual payouts for business year 2015. While Sunrise believes that it has a well-balanced compensation system in place, the Company will carefully take into account any feedback received from shareholders as part of this advisory vote.

At the 2016 Annual General Meeting, shareholders will also be asked to approve the compensation of the Board of Directors for the period prior to the 2017 Annual General Meeting, as well as the maximum compensation amount for the Group Management Board for the business year ending December 31, 2017.

Sunrise is committed to providing shareholders with a real say-on-pay. Therefore, shareholders determine compensation budgets for future years and can voice their opinions on the use of these budgets in an advisory capacity each year.

The Compensation Report is subject to and is compliant with the Directive on Information Relating to Corporate Governance and its annex (Corporate Governance Directive) and the commentary issued by SIX Swiss Exchange, along with the Ordinance against Excessive Compensation in Public Companies (Compensation Ordinance) as well as the Swiss Code of Best Practice for Corporate Governance.