in order to ensure the company's success and to maintain its position as market leader, it is critical to attract, develop and retain the right talent. Geberit’s compensation programs are designed to support this fundamental objective and are based on the following principles:
- Remuneration is competitive with that of other companies with which Geberit competes for talent
- Both company performance and individual contributions are recognized and rewarded
- Remuneration programs are balanced between rewarding short-term success and long-term value creation
- Shareholding programs foster the long-term commitment and mindset of executives and the alignment of their interests to those of the shareholders
- Executives are protected against risks through appropriate pension and insurance programs
Remuneration of the Board of Directors
in order to ensure the independence of the Board of Directors in its supervisory function over the Group Executive Board, members of the Board of Directors receive a fixed remuneration in the form of non-discounted shares with a blocking period of four years. The remuneration system for the Board of Directors does not contain any performance-related component, refer also to Remuneration architecture, Board of Directors.
Remuneration of the Group Executive Board
The remuneration of the Group Executive Board consists of fixed and variable elements.
The base salary and benefits form the fixed remuneration and are based on prevalent market practice.
The variable remuneration drives and rewards best-in-class performance by means of continuously setting ambitious and stretched targets. The variable remuneration consists of a short-term and a long-term element:
- The short-term variable remuneration is based on Geberit’s value drivers, such as sales, earnings before interest and tax (EBIT), return on invested capital (ROIC) and earnings per share (EPS), as well as individual objectives that are embedded in the annual performance management process. This remuneration balances the reward of individual performance and company success.
- The long-term variable remuneration is based on the return on invested capital (ROIC) and aims to reward sustainable performance, to align the interests of management to those of shareholders and to foster long-term retention of the executives.
The variable remuneration is capped in order to not reward for inappropriate risk taking or short-term profit maximization at the expense of the long-term health of the company, refer also to Remuneration architecture, Group Executive Board.
Governance and shareholders’ involvement
Authority for decisions related to remuneration are governed by the Articles of Incorporation and the Organizational Regulations of Geberit AG.
The prospective maximum aggregate amounts of remuneration of the members of the Board of Directors and of the Group Executive Board are subject to a binding shareholders’ vote at the Annual General Meeting. In addition, the Remuneration Report for the preceding compensation period is subject to a consultative vote, refer also to Determination of remuneration.