6. Group Executive Board: remuneration and share/option ownership in 2014

6.1. Performance in 2014

Thanks to healthy sales growth, a positive net price effect and efficient cost control, results far exceeded those achieved in the previous year despite a continued challenging environment. The values of all key figures used to calculate the variable cash remuneration exceeded the targets; the majority of the results reached all-time highs.

6.2. Remuneration awarded in 2014

The remuneration of the Group Executive Board amounted to TCHF 7,707 in 2014 (previous year TCHF 7,391). Remuneration of the CEO amounted to TCHF 2,802 in 2014 (previous year TCHF 2,597). Base salaries for the CEO and other members of the Group Executive Board remained unchanged. This rise in the total remuneration compared with 2013 is a consequence of the higher target achievement in the STI program, the increase in the LTI grant as well as higher social insurance contributions resulting from the exercise of options. The amount of options granted under the MSOP (Long-Term Incentive) was increased from 40% to 50% of the target income for the CEO, and from 20% to 30% 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 so that the total compensation package is aligned with market practice over the coming years. During this process, the base salaries of members of the Group Executive Board remain unchanged. The MSPP options increased slightly compared to the previous year. Contributions to company pension funds and other benefits to the CEO and the other members of the Group Executive Board remained constant.

The following table – reviewed by the external auditor – shows details of remuneration for 2014 and 2013:

    2014     2013
  A. Baehny
CEO
7
Total A. Baehny
CEO
Total
  CHFCHF CHF CHF
Remuneration of the Group Executive Board
Salary       
- Base salary 946,8032,793,345 946,803 2,861,729
- Variable remuneration1 869,4862,540,674 831,086 2,507,682
thereof in shares in 20142  498,488 1,338,699
Options     
- Call options MSOP 2013/20143 685,6611,347,411 548,526 1,110,585
- Call options MSPP 2013/20144 41,813112,290 62,797 108,264
Non-cash benefits  
- Private share of company vehicle5 9,66039,984 9,660 38,792
Expenditure on pensions     
- Pension plans and social insurance 246,523861,830 196,283 752,034
- Contribution health/accident insurance 2,26211,903 2,262 12,390
Total6 2,802,2087,707,437 2,597,417 7,391,476

1 The amounts to be paid respectively; the amounts effectively paid are shown. Payment of the variable salary occurs ​​in the following year. 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 281.95 (PY CHF 231.20).
3 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 281.95 (previous year 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 23.65 (previous year CHF 24.34) determined using the binomial method.
4 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 281.95 (previous year CHF 231.20); definitive acquisition of the option (“vesting”) dependent on various conditions, 1-4-year blocking period (4 tranches of 25%), market value of CHF 23.65 (previous year CHF 24.34) determined using the binomial method.
5 Valuation in accordance with the guidelines of the Swiss Federal Tax Administration FTA (0.8% of the purchase cost per month).
6 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.
7 The remuneration of A. Baehny as Chairman of the Board of Directors is compensated with his total CEO remuneration.

 

6.3. Shareholdings of Group Executive Board

As of the end of 2014 and 2013, the Group Executive Board held the following shares in the company:

  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

 

  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 options1
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

 

As of December 31, 2014, there were no outstanding loans or credits between the company and members of the Group Executive Board, closely related parties or former members of the Group Executive Board.