Integrated Annual Report 2015
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6. Group Executive Board: remuneration and share/option ownership in 2015

This section is audited by the external auditor.

6.1. Performance in 2015

The challenging environment in the construction industry, the integration of the acquired Sanitec business and the strong Swiss franc influenced the Geberit Group’s results in the 2015 financial year. Despite this, the company managed to achieve a good overall result, maintain performance on a high level and further consolidate our position as the leading supplier of sanitary products.

Net sales increased by 24.2% in 2015, to CHF 2,593.7 million. Total growth comprised organic growth in local currencies of +2.7%, a negative foreign currency effect of 9.6% and an increase of 31.1% due to the Sanitec acquisition. Operating margins for the old Geberit business were positively influenced by higher volume, product mix effects, lower raw material prices and diluted by the effect of the 10% currency rebate granted in Switzerland. However, as expected, overall results were impacted by the lower operating margins from the newly acquired Sanitec business . The results comprise various special effects in connection with the Sanitec acquisition. Operating profit (EBIT) adjusted for these special effects increased by 2.4% to CHF 590.9 million and the correspondingly adjusted EBIT margin came to 22.8%. Adjusted net income fell by 1.1% to CHF 493.1 million, with an adjusted return on net sales of 19.0%. Adjusted earnings per share declined by 0.4% to CHF 13.23. Free cashflow rose by 5.1% to CHF 484.0 million. The Return on Invested Capital (ROIC) was 20.1%.

To determine the variable cash remuneration (STI) the following Key Performance Indicators (KPI) are used: Sales, EBIT, Earning per Share (EPS) and ROIC, all equally weighted. Furthermore, the achievement of qualitative individual target is considered. The degree of achievement varies by KPI, and the weighted average of all elements used to calculate the variable cash remuneration slightly exceeded the targets.

6.2. Remuneration awarded in 2015

The remuneration of the Group Executive Board amounted to TCHF 6,764 in 2015 (previous year TCHF 7,707). The remuneration of the CEO amounted to TCHF 1,786 in 2015 (previous year TCHF 2,802). The lower total remuneration in 2015 for the Group Executive Board compared to the previous year is the result of various factors.

Reducing impact on remuneration:
  • The lower remuneration of the new CEO compared to his predecessor.
  • Target achievement in the STI program was lower than in the previous year.
Increasing impact on remuneration:
  • Selected higher option grants (LTI) to align compensation to market.
  • The Group Executive Board was increased from five to six members.

The base salaries of the existing Group Executive Board members remained unchanged. Contributions to company pension funds decreased due to the lower results in the variable cash compensation (STI), while the other benefits increased with the additional member of the Group Executive Board.

Further information on the remuneration awarded to the Group Executive Board for the business year 2015, compared to the maximum potential amount of remuneration, is provided as well in the invitation to the Ordinary General Meeting 2016.

The following table – reviewed by the external auditor – shows details of remuneration for 2015 and 2014:


    2015     2014
  C. Buhl
CEO
Total A. Baehny7
CEO
Total
  CHFCHF CHF CHF
Salary       
- Fixed salary 756,8002,819,507 946,803 2,793,345
- Variable salary1 401,5001,459,092  869,486 2,540,674
thereof in shares in 20152  0 1,113,090
Shares/options     
- Call options MSOP 2015/20143 439,9271,502,281  685,661 1,347,411
- Call options MSPP 2015/20144 18,937144,005  41,813 112,290
Non-cash benefits  
- Private share of company vehicle5 6,64839,864  9,660 39,984
Expenditure on pensions     
- Pension plans and social insurance 159,607786,263  246,523 861,830
- Contribution health/accident insurance 2,23813,388  2,262 11,903
Total6 1,785,657 6,764,400  2,802,208 7,707,437

6.3. Shareholdings of Group Executive Board

As of the end of 2015 and 2014, the Group Executive Board held the following shares in the company:

  Maturity Average
exercise
price
in CHF
C. Buhl
CEO
R. Iff
CFO
M.
Reinhard
E.
Renfordt-
Sasse
K.
Spachmann
R.
van
Triest
Total
2015                  
Shareholdings Group Executive Board
Shares     3,480 31,300 2,000 1,665 7,462 0 45,907
Percentage voting rights shares   < 0.1% < 0.1% < 0.1% < 0.1% < 0.1% 0% 0.12%
Call options1
Vesting period:
Vested 2016–2018 194.50 0 0 0 1,208 0 0 1,208
2016 2017 205.50 525 1,417 1,542 583 1,330 0 5,397
2014–2017 2020 231.20 2,008 4,676 4,844 1,244 5,620 0 18,392
2015–2018 2021 281.95 2,172 10,419 10,559 1,872 9,592 0 34,614
2016–2019 2022 349.15 13,696 10,029 10,474 5,860 9,040 0 49,099
Total options     18,401 26,541 27,419 10,767 25,582 0 108,710
Percentage potential share of
voting rights options
< 0.1% < 0.1% < 0.1% < 0.1% < 0.1% 0% 0.29%

1 Purchase ratio 1 share for 1 option

  Maturity Average
exercise
price
in CHF
A. Baehny
CEO
R. Iff
CFO
M. Reinhard K. Spachmann Total
2014              
Shareholdings Group Executive Board
Shares     46,969 31,280 2,000 5,000 85,249
Percentage voting rights shares   0.12% < 0.1% < 0.1% < 0.1% 0.23%
Call options1
Vesting period:
Vested 2015–2017 207.40 0 0 0 1,038 1,038
2015 2016–2018 228.00 1,792 957 1,017 483 4,249
2016 2017 205.50 6,665 1,417 1,542 1,330 10,954
2014–2017 2020 231.20 24,471 7,014 7,016 5,620 44,121
2015–2018 2021 281.95 30,760 10,810 10,559 9,592 61,721
Total options     63,688 20,198 20,134 18,063 122,083
Percentage potential share of
voting rights options
0.17% < 0.1% < 0.1% < 0.1% 0.32%

1 Purchase ratio 1 share for 1 option

As of 31 December 2015, there were no outstanding loans or credits between the company and the members of the Group Executive Board, closely related parties or former members of the Group Executive Board.