Remuneration for the 2017 business year

Board of Directors

The members of the Board of Directors received cash compensation of CHF 1.159 million in the year under review. In addition, a total of 1ʼ390 GF registered shares with a total market value of CHF 1.79 million were allocated as share-related compensation. In the previous year, the allocation had been 1ʼ501 GF registered shares, equivalent to a total market value of CHF 1.251million. Together with other benefits, the total compensation paid to the Board of Directors in the year under review amounted to CHF 3.085 million (previous year: CHF 2.523 million).

According to the compensation model for the Board of Directors, the Board of Directors would have been entitled to 1ʼ500 GF registered shares with a total market value of CHF 1.932 million leading to a total compensation of the Board of Directors amounting to CHF 3.23 million. This total compensation would have been above the maximum sum of CHF 3.093 million approved by the Annual Shareholdersʼ Meeting of 19 April 2017 for remuneration of the members of the Board; according to the Articles of Association Art. 22.2b, the number of registered shares to be allocated have been reduced proportionally.

The detailed disclosure of compensation to the Board of Directors is as follows:

Compensation of the members of the Board of Directors 2017

 

 

Compensation

 

Social insurance funds 3

 

Total compen- sation 2017 4

 

Total compen- sation 2016 4

 

 

Cash compensation 1

 

Number of shares

 

Share-based compensation 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Andreas Koopmann

 

270

 

278

 

358

 

27

 

655

 

543

Chairman Board of Directors

 

 

 

 

 

 

 

 

 

 

 

 

Chairman Nomination Committee

 

 

 

 

 

 

 

 

 

 

 

 

Hubert Achermann

 

150

 

139

 

179

 

14

 

343

 

287

Chairman Audit Committee

 

 

 

 

 

 

 

 

 

 

 

 

Gerold Bührer

 

123

 

139

 

179

 

12

 

314

 

258

Vice Chairman Board of Directors

 

 

 

 

 

 

 

 

 

 

 

 

Member Audit Committee

 

 

 

 

 

 

 

 

 

 

 

 

Roman Boutellier 5

 

96

 

139

 

179

 

11

 

286

 

239

Member Nomination Committee

 

 

 

 

 

 

 

 

 

 

 

 

Member Compensation Committee

 

 

 

 

 

 

 

 

 

 

 

 

Riet Cadonau 6

 

84

 

139

 

179

 

13

 

276

 

159

Member Compensation Committee

 

 

 

 

 

 

 

 

 

 

 

 

Roger Michaelis

 

123

 

139

 

179

 

15

 

317

 

261

Member Audit Committee

 

 

 

 

 

 

 

 

 

 

 

 

Eveline Saupper

 

110

 

139

 

179

 

15

 

304

 

243

Chairwoman Compensation Committee

 

 

 

 

 

 

 

 

 

 

 

 

Jasmin Staiblin

 

90

 

139

 

179

 

14

 

283

 

226

Member Compensation Committee

 

 

 

 

 

 

 

 

 

 

 

 

Zhiqiang Zhang

 

113

 

139

 

179

 

15

 

307

 

251

Member Nomination Committee

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

1’159

 

1’390

 

1’790

 

136

 

3’085

 

2’467 *

(all in CHF 1’000, except column “Number of shares”)

* The total compensation in 2016 amounted to CHF 2.523 million, including a compensation for Ulrich Graf (Chairman Compensation Committee until 23 March 2016) of CHF 56’000.

1 The cash compensation includes reimbursements for international travel amounting to CHF 45’000.

2 The share-based compensation consists in the allocation of a fixed number of shares. The amount of the share-related compensation is calculated on the basis of the full value of the shares at the year-end price of CHF 1’288 on 29 December 2017.

3 Social insurance funds represent employer contributions to social insurance funds.

4 The total compensation encompasses the cash compensation, the share-based compensation, and the contribution to social insurance funds.

5 Member of the Compensation Committee until 19 April 2017.

6 Member of the Compensation Committee since 19 April 2017.

The compensation paid to the Board of Directors for the year 2017 was above that of the previous year. The increase is explained solely by the increased value of the shares from CHF 834 in 2016 to CHF 1ʼ288 in 2017. The compensation system for the Board of Directors remained unchanged.

In the year under review both Mr. Roger Michaelis and Mr. Zhiqiang Zhang received each CHF 22ʼ500 for international travel time spent; these reimbursements are included in the cash compensation. No further compensation was paid to members of the Board of Directors. No compensation was paid to parties closely related to members of the Board of Directors.

Executive Committee

The members of the Executive Committee received cash, share-related compensation, social security and pension contributions amounting to CHF 9.123 million for the year under review (previous year: CHF 8.320 million). Under the new long-term incentive plan, 1ʼ750 performance shares with a total value at grant of CHF 2.254 million, based on a share price of CHF 1ʼ288 at year-end 2017, were granted to members of the Executive Committee for the year under review (previous year: 1ʼ063 restricted shares and 1ʼ063 performance shares with a total value of CHF 1.773 million).

At the Annual Shareholdersʼ Meeting of 19 April 2017, a maximum sum of CHF 10.177 million for remuneration of the members of the Executive Committee for the business year 2017 was approved.

The detailed disclosure of compensation to the Executive Committee in accordance with the Ordinance against excessive pay in stock exchange listed companies is as follows:

Compensation of the members of the Executive Committee 2017

 

 

Fixed salary in cash

 

Short-term incentive in cash 1

 

EPS dependent performance shares PS(EPS)

 

rTSR dependent performance shares PS(rTSR)

 

Share-based remune- ration 2

 

Social insu- rance funds 3

 

Pension funds 4

 

Total com- pen- sation 2017 5

 

Total compen- sation 2016

Executive Committee

 

2’978

 

2’675

 

875

 

875

 

2’254

 

359

 

857

 

9’123

 

8’320

Of whom Yves Serra, CEO (highest individual compensation)

 

942

 

1’163

 

375

 

375

 

966

 

127

 

273

 

3’471

 

2’976

(all in CHF 1’000, except rows “EPS dependent performance shares” and “rTSR dependent performance shares”)

1 The short-term incentive is based on the short-term incentive plan. The amount is determined by the fulfillment of personal performance objectives and by the financial results of the divisions and the Corporation. The short-term incentive for the 2017 financial year was approved by the Board of Directors on 22 February 2018. Payment will be made in March 2018.

2 The share-based remuneration is based on the long-term incentive plan: Each year, fixed numbers of performance shares (PS) are allocated. The amount of the PS-based compensation is calculated on the basis of the grant value of the PS at the year-end price of CHF 1’288 on 29 December 2017. The number of PS vesting after the vesting period of three years depends on meeting the respective performance criteria.

3 The social insurance funds expenses represent employer contributions to social security.

4 The pension funds expenses represent employer contributions to pension funds.

5 The total compensation is comprised of the fixed salary, the short-term incentive, the share-based remuneration, and the social and pension contributions.

Total compensation for the Chief Executive Officer and the other members of the Executive Committee in 2017 was higher than in 2016. The increase is explained by the following factors:

  • The value of the shares increased from CHF 834 in 2016 to CHF 1ʼ288 in 2017.
  • The short-term incentive related to the financial results of the Corporation and the divisions and to the individual performance was higher than in 2016, based on the excellent results achieved. Consequently, the overall short-term incentive percentage ranges from 62% to 80.7% of the base salary for the Executive Committee members and amounts to 123.5% of the base salary for the Chief Executive Officer.
  • The fixed salaries were adjusted, due to the reduction of number of shares granted compared to the long-term incentive plan 2016. For the CEO the number of shares granted has been reduced from 850 to 750, for the Executive Committee members from 300 to 250; the value of the reduced shares has been calculated with a share value of CHF 810 and has been embedded within the other elements of compensation (fixed salary in cash and short-term incentive).
  • The employerʼs contributions to social security and to company retirement plans have increased following the adjustments of fixed salary. Please note that a significant portion of the social security payments of the employer to the Swiss social security system represents a solidarity payment as the individuals will not get any return or benefit due to these payments.

Achievement of the corporate business objectives

The achievement of the corporate business objectives for the year 2017 is as follows:

Business objectives

 

Hurdle 1

 

Strategy targets 2016–2020

 

Result 2017

Organic sales growth (at constant currencies)

 

1%

 

3–5%

 

9.8%

EBIT margin

 

6%

 

8–9%

 

8.5%

ROIC

 

14%

 

18–22%

 

20.3%

1 Achievements below the hurdle result in zero payout for the respective business objective; for the objectives EBIT margin and ROIC, hurdle achievements result in 50% payout for the respective target

Starting 1 January 2017 until the end of October 2017, Pietro Lori continued his employment with GF as non-Executive Committee member and the compensation package for this period amounted to CHF 101ʼ684. Roland Abt continued his employment with GF as non-Executive Committee member from 1 January 2017 until the end of August 2017; his compensation package for the year 2017 amounted to CHF 342ʼ899.

In the year under review, no further compensation was paid to former members of the Executive Committee. No compensation was paid to parties closely related to members of the Executive Committee.

Shareholding ownership guideline (as of business year 2017)

The Board of Directors approved the implementation of a shareholding ownership guideline as per 1 January 2017, as follows:

  • Members of the Board are required to hold 200% of the basis fee in GF shares. 
  • The CEO is required to hold 200% of the fixed base salary in GF shares.
  • Members of the Executive Committee are required to hold 100% of the fixed base salary in GF shares.
  • Newly appointed members shall build up the required ownership within five years of their appointment. In the event of a substantial rise or drop in the share price, the Board of Directors may, at its discretion, amend that time period accordingly.

To calculate whether the minimum holding requirement is met, all vested shares are considered regardless of whether they are blocked or not. However, unvested PS are excluded. The Compensation Committee reviews compliance with the share ownership guideline on an annual basis.

Shareholdings of the members of the Board of Directors and of the Executive Committee

The information on shareholdings of the members of the Board of Directors and of the Executive Committee is included in the Notes to the Financial Statements of GF Ltd.

Loans to members of governing bodies

Neither GF Ltd nor its Corporate Companies granted any guarantees, loans, advances, or credit facilities to members of the Board of Directors or the Executive Committee or related parties in the year under review. As of 31 December 2017, no loans were outstanding.