Integrated Annual Report 2015
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1. Introduction by the Chairman of the Nomination & Compensation Committee

Dear Shareholder

The purpose of the remuneration programs is to attract, retain and motivate employees, to drive best-in-class performance and to encourage behaviours that are aligned with the company’s high standards of integrity. We strive to proactively refine our remuneration system in order to respond to the changing business and regulatory environment, and we are keen to ensure that our remuneration principles reward performance and are well aligned to the interests of our shareholders.

Based on your feedback and in the context of the implementation of the Ordinance against Excessive Compensation in Listed Stock Corporations, we continuously assess and review our remuneration system. We made a number of changes in recent years, such as the elimination of performance-based remuneration for members of the Board of Directors, the introduction of a performance condition and, for the coming years, the extension of the vesting period in the long-term incentive plan for the Group Executive Board, as well as the implementation of a claw-back policy on the variable remuneration payments made to the Group Executive Board.

We have also expanded the disclosure of remuneration in our Remuneration Report. Based on the positive outcome of the shareholder consultative vote on the Remuneration Report at the 2014 and 2015 General Meetings, we believe that shareholders welcome the changes made to our remuneration programs and disclosure. This year again, we decided to further enhance our disclosure with additional information about performance in the reporting year, so that you can better assess the link between pay and performance. Looking ahead, we will continue to review and refine our remuneration framework in order to promote sustainable performance and employees’ engagement, while ensuring compliance on the regulatory requirements.

At the 2016 General Meeting, we will request your approval of the total remuneration amount to be awarded to the Board of Directors for the period until the following General Meeting, and to the Executive Board for the 2017 business year. Further, you will have the opportunity to express your opinion on this Remuneration Report in a consultative vote. You will see in the report that the remuneration awarded to the Board of Directors for the compensation period ending with the 2016 General Meeting is in line with the limits approved by the 2015 General Meeting (limits approved for the remuneration of the Group Executive Board start to apply with business year 2016).

The Board of Directors would like to thank you for your valuable feedback about our executive remuneration. We hope that you find this report informative and are confident that our remuneration system rewards performance in a balanced and sustainable manner and aligns well with the shareholders’ interests.


Yours sincerely

Signature Robert F. Spoerry

Robert F. Spoerry
Chairman of the Nomination & Compensation Committee