Business report  >  Remuneration Report

6. Group Executive Board: remuneration and share/option ownership

The remuneration of the Group Executive Board amounted to TCHF 7,391 in 2013 (previous year TCHF 6,504). Re­mu­ner­a­tion of the CEO amounted to TCHF 2,597 in 2013 (previous year TCHF 2,358). Base salaries for the CEO and other members of the Group Executive Board remained unchanged. The increase of the overall compensation from 2012 to 2013 is the consequence of the strong results achieved in 2013. The majority of business goals were clearly overachieved. The amount of options granted under the MSOP (Long-Term Incentive) was increased from 30% to 40% of the target income for the CEO, and from 10% to 20% of the target income for other members of the Group Executive Board. As described in  3.2 Determination of renumeration, "Benchmarks and external consultants", these are necessary changes to rebalance the different remuneration components in order that the total compensation package is in line with market practice over the coming years. During this process, the base salaries of members of the Group Executive Board will remain unchanged. The MSPP options decreased compared to the previous year as a smaller part of the variable remuneration was drawn in shares. Contributions to company pension funds decreased for the CEO and other members of the Group Executive Board, as the 2012 figures included a one-time adjustment related to pension scheme modifications (reduction of pension conversion).

The following table shows details of remuneration for 2013 and 2012:

 
    2013     2012
  A. Baehny
CEO
10
Total   A. Baehny
CEO
Total
  CHF CHF   CHF CHF
Remuneration of the Group Executive Board
Salary          
- Fixed salary 946,803 2,861,729   946,803 2,861,729
- Variable salary 1 831,086 2,507,682   596,580 1,792,510
thereof in shares in 2013 2       596,496 1,028,378
Shares/options          
- Call options MSOP 2012 A 3 0 0   179,755 327,146
- Call options MSOP 2012 B 4 0 0   163,093 296,822
- Call options MSOP 2013 5 548,526 1,110,585   0 0
- Call options MSPP 62,797 6 108,264 6   107,271 7 219,068 7
Non-cash benefits          
- Private share of company vehicle 8 9,660 38,792   9,660 37,512
Expenditure on pensions          
- Pension plans and social insurance 196,283 752,034   352,076 11 956,121 11
- Contribution health/accident insurance 2,262 12,390   2,390 13,030
Total 9 2,597,417 7,391,476   2,357,628 6,503,938

1 The amounts to be paid respectively the amounts effectively paid are shown. The payment of the variable salary occurs ​​in the following year. The member of the Group Executive Board are free to choose between a payment in shares or in cash.
2 Registered shares of the company with a par value of CHF 0.10 each, 3-year blocking period, valued at fair market value at grant date of CHF 231.20 (PY CHF 192.85).
3 Call options A on registered shares of the company with a par value of CHF 0.10 each, issued within the scope of the Management Stock Option Program (MSOP); 1 option entitles to purchase 1 registered share at an exercise price of CHF 196.15; definitive acquisition of the option (“vesting”) dependent on various conditions, 2-year blocking period, market value of CHF 26.97 determined using the binomial method.
4 Call options B on registered shares of the company with a par value of CHF 0.10 each, issued within the scope of the Management Stock Option Program (MSOP); 1 option entitles to purchase 1 registered share at an exercise price of CHF 205.50; definitive acquisition of the option (“vesting”) dependent on various conditions, 4-year blocking period, market value of CHF 24.47 determined using the binomial method.
5 Call options on registered shares of the company with a par value of CHF 0.10 each, issued within the scope of the Management Stock Option Programm (MSOP); 1 option entitles to purchase 1 registered share at an exercise price of CHF 231.20; definitive acquisition of the option (“vesting”) dependent on various conditions, 2-4-year blocking period (3 tranches at 33.3%), market value of CHF 24.34 determined using the binomial method. Effective January 1 2013, the MSOP program has been amended by implementing a performance-based vesting criteria ( Note 18 Participation plans of the consolidated financial statements),
6 Call options on registered shares of the company with a par value of CHF 0.10 each, issued within the scope of the Management Share Participation Program (MSPP) related to the payout of the variable salary for the year 2012 and 2011 respectively; 1 option entitles to purchase 1 registered share at an exercise price of CHF 231.20; definitive acquisition of the option (“vesting”) dependent on various conditions, 1-4-year blocking period (4 tranches at 25%), market value of CHF 24.34 determined using the binomial method.
7 Call options on registered shares of the company with a par value of CHF 0.10 each, issued within the scope of the Management Share Participation Program (MSPP); 1 option entitles to purchase 1 registered share at an exercise price of CHF 192.85; definitive acquisition of the option (“vesting”) dependent on various conditions, 2-year blocking period, market value of CHF 31.43 determined using the binomial method.
8 Valuation in accordance with the guidelines of the Swiss Federal Tax Administration FTA (0.8% of the purchase cost per month).
9 Immaterial payments (below CHF 500) are not included in the total. Overall, these payments do not exceed CHF 2,000 per member of the Group Executive Board.
10 The remuneration of A. Baehny as Chairman of the Board of Directors is compensated with his total CEO remuneration.
11 Including one-off compensation in pension provision due to pension scheme modifications (reduction of pension conversion rate).

The parameters taken into consideration in the option valuation model are set out in  Note 18 Participation plans of the consolidated financial statements.

 

As of the end of 2013 and 2012, the Group Executive Board held the following shares in the company:

 
  Maturity Average
exercise price
in CHF
A. Baehny
CEO
R. Iff
CFO
W. Christen-
sen
M. Reinhard K. Spachmann Total
2013                
Shareholdings Group Executive Board
Shares     45,201 20,000 1,489 1,940 3,084 71,714
Percentage voting rights shares     0.12% < 0.1% < 0.1% < 0.1% < 0.1% 0.19%
                 
Call options 1
Vesting period:
Vested 2014–2016 217.60 1,792 957 0 1,017 1,038 4,804
2014 2015–2017 198.53 11,742 4,220 1,891 3,560 2,619 24,032
2015 2016 228.00 1,792 957 753 1,017 483 5,002
2016 2017 205.50 6,665 1,417 1,176 1,542 1,330 12,130
2014–2017 2020 231.20 25,116 7,356 4,968 7,016 5,620 50,076
Total options     47,107 14,907 8,788 14,152 11,090 96,044
Percentage potential share of voting rights options     0.12% < 0.1% < 0.1% < 0.1% < 0.1% 0.25%

1 Purchase ratio 1 share for 1 option

 

  Maturity Average
exercise price
in CHF
A. Baehny
CEO
R. Iff
CFO
W. Christen-
sen
M. Reinhard K. Spachmann Total
2012                
Shareholdings Group Executive Board
Shares     49,684 21,823 6,086 2,206 3,084 82,883
Percentage voting rights shares     0.13% < 0.1% < 0.1% < 0.1% < 0.1% 0.21%
                 
Call options 1
Vesting period:
Vested 2013–2015 178.37 4,232 3,983 715 1,784 555 11,269
2013 2014–2016 179.05 8,137 4,691 2,242 3,578 1,708 20,356
2014 2015–2017 198.53 11,742 4,220 1,891 3,560 2,619 24,032
2015 2016 228.00 1,792 957 753 1,017 483 5,002
2016 2017 205.50 6,665 1,417 1,176 1,542 1,330 12,130
Total options     32,568 15,268 6,777 11,481 6,695 72,789
Percentage potential share of voting rights options     < 0.1% < 0.1% < 0.1% < 0.1% < 0.1% 0.19%

1 Purchase ratio 1 share for 1 option

 

As of December 31, 2013, there were no outstanding loans or credits between the company and the members of the Group Executive Board.