1. Introduction by the Chairman of the Nomination & Compensation Committee
On behalf of the Nomination and Compensation Committee (NCC), I am pleased to present the 2017 Remuneration Report.
As of the 2017 General Meeting, we welcomed Eunice Zehnder-Lai as a new member of the NCC.
The 2017 financial year was shaped by a generally positive market environment as well as the achievement of the most important milestones regarding the integration of the ceramics business. Good results were achieved overall. Increased sales volumes, a positive product mix effect, and synergies from the Sanitec integration had a positive effect on the operating results. Three factors in particular – namely higher raw material prices, increased personnel expenses and depreciation – had a negative impact. The Remuneration Report summarises how these results impacted the variable remuneration made to the members of the Group Executive Board under the different remuneration components.
During the reporting year, future changes were announced for the management of Geberit: Martin Ziegler was appointed to the Group Executive Board as the new Head of Operations as of 1 January 2018, succeeding Michael Reinhard, who retired after 13 years with Geberit. This internal appointment is a result of our continued focus on the assessment of performance and succession planning for positions on the Group Executive Board.
The NCC also continued to review the compensation programmes in order to ensure their alignment with the business strategy and with the long-term interests of our shareholders. Otherwise, the NCC performed its regular activities throughout the year such as the performance goal setting at the beginning of the year and the performance assessment at year end, the determination of the compensation of the members of the Board of Directors and of the Group Executive Board, as well as the preparation of the Remuneration Report and of the say-on-pay vote for the General Meeting. You will find further information on our activities and on Geberit´s compensation system and governance on the following pages.
At the 2018 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 the maximum aggregate remuneration awarded to the Executive Board for the 2019 business year. Additionally, 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 2018 General Meeting and the remuneration awarded to the Group Executive Board in 2017 are within the limits approved at the 2017 General Meeting and 2016 General Meeting respectively.
Looking ahead, we will continue to assess and review our compensation programmes to ensure that they are still fulfilling their purpose in the evolving context in which the company operates. We will pursue an open and regular dialogue with our shareholders as we continue to enhance the compensation system. We have every confidence that you will find this report informative. We are confident that our remuneration system rewards performance in a balanced and sustainable manner and aligns well with shareholders’ interests.
Chairman of the Nomination & Compensation Committee