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 CEO10 |
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.