3. Remuneration at a glance
Board of Directors
Summary of current compensation system
In order to ensure the independence in their supervisory function, members of the Board of Directors receive a fixed remuneration only, in the form of cash and shares, with a blocking period of four years.
| Annual fees |
in CHF |
Delivery |
|---|---|---|
| Chairman | 885,000 | Cash and restricted shares |
| Vice Chairman | 245,000 | Restricted shares |
| Member of the BoD | 190,000 | Restricted shares |
| Chairman of NCC / Audit Committee | 45,000 | Restricted shares |
| Member of NCC / Audit Committee | 30,000 | Restricted shares |
| Expense allowance | 15,000 | Cash |
Compensation in 2018
The compensation awarded to the Board of Directors for the term of office until the Annual General Meeting 2018 is within the limits approved by the shareholders at the annual general meetings:
| Comparison period | Approved amount (CHF) | Effective amount (CHF) |
|---|---|---|
| AGM 2017 – AGM 2018 | 2,350,000 | 2,279,943 |
| AGM 2018 – AGM 2019 | 2,350,000 | 2,277,435* |
* The compensation period is not yet completed, a definitive assessment will be provided in the compensation report for FY 2019 |
||
Group Executive Board
Summary of current compensation system
The remuneration of the Group Executive Board consists of fixed and variable elements.
Base salary and benefits form the fixed remuneration and are based on prevalent market practice.
Variable remuneration drives and rewards best-in-class performance based on ambitious targets. It
consists of short-term and long-term
elements:
| Base salary | Pay for the function | Fixed compensation |
|
| Benefits | Cover retirement, death and disability risks, attract and retain | ||
| Short-Term Incentive | Drive and reward performance, attract and retain | Variable compensation |
|
| Share Participation Programme (MSPP) | Align with shareholders’ interests | ||
| Long-Term Incentive (Share Option Plan/MSOP) | Drive and reward long-term performance, align with shareholders’ interests, attract and retain |
Compensation in 2018
The compensation awarded to the Group Executive Board in the financial year 2018 is within the limits approved by the shareholders at the annual general meeting:
| Comparison period | Approved amount (CHF) | Effective amount (CHF) |
|---|---|---|
| Financial year 2018 | 11,300,000 | 8,727,347 |
Performance in the financial year 2018
The weighted average of all elements used to calculate the variable cash remuneration slightly exceeded the targets.
See 7. Group Executive Board, 7.1 Performance in 2018
Changes from 2019 onwards
Performance options granted under the long-term incentive and under the management share purchase plan will have a three-year cliff vesting and a maturity of nine years. Claw-back and malus provisions will be introduced in the long-term incentive plan (currently in place in the short-term incentive plan).
See Outlook
Remuneration principles
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 remuneration programmes 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 talents.
- Both company performance and individual contributions are recognised and rewarded.
- Remuneration programmes are balanced between rewarding short-term success and long-term value creation.
- Participation plans 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 programmes.
Compensation governance
- Authority for decisions related to remuneration is governed by the Articles of Incorporation and the Organisational 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 General Meeting.
- The Remuneration Report for the preceding period is subject to a consultative vote.