6 Compensation and shareholdings

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 1ʼ501 GF registered shares with a total market value of CHF 1.251 million were allocated as share-related compensation. In the previous year, the allocation had been 1ʼ534 GF registered shares, equivalent to a total market value of CHF 1.042 million. Together with other benefits, the total compensation paid to the Board of Directors in the year under review amounted to CHF 2.523 million (previous year: CHF 2.331 million).

At the General Assembly of 23 March 2016, a maximum sum of CHF 2.774 million for remuneration of the members of the Board was approved for the period from the 2016 Annual Shareholders’ Meeting to the 2017 Annual Shareholders’ Meeting.

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

Compensation paid to the members of the Board of Directors 2016

	Compensation			Social insurance funds 3	Total compen- sation 2016 4	Total compen- sation 2015 4
	Cash compensation 1	Number of shares	Share-based compensation 2	Social insurance funds 3	Total compen- sation 2016 4	Total compen- sation 2015 4

Andreas Koopmann	270	300	250	23	543	499
Chairman Board of Directors
Chairman Nomination Committee
Hubert Achermann	150	150	125	12	287	254
Chairman Audit Committee
Gerold Bührer	123	150	125	10	258	235
Vice Chairman Board of Directors
Member Audit Committee
Roman Boutellier 5	105	150	125	9	239	201
Member Nomination Committee
Member Compensation Committee
Riet Cadonau 6	54	116	97	8	159
Member Board of Directors
Ulrich Graf 7	25	35	29	2	56	222
Chairman Compensation Committee
Roger Michaelis	123	150	125	13	261	230
Member Audit Committee
Eveline Saupper 8	106	150	125	12	243	159
Chairwoman Compensation Committee
Jasmin Staiblin	90	150	125	11	226	202
Member Compensation Committee
Zhiqiang Zhang	113	150	125	13	251	227
Member Nomination Committee
Total	1’159	1’501	1’251	113	2’523	2’229 *

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

* The total compensation in 2015 amounted to CHF 2.331 million, including a compensation for Rudolf Huber (Chairman Audit Committee until 18 March 2015) of CHF 58’000 and compensation for Isabelle Welton (Member Compensation Committee until 18 March 2015) of CHF 44’000.

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 834 on 31 December 2016.

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 since 23 March 2016.

6 Member of the Board of Directors since 23 March 2016.

7 Chairman Compensation Committee until 23 March 2016.

8 Chairwoman of the Compensation Committee since 23 March 2016.

The compensation paid to the Board of Directors for the year 2016 was above that of the previous year. The increase is explained by the increased value of the shares from CHF 679 in 2015 to CHF 834 in 2016.

In the year under review, Mr. Ulrich Graf, Chairman of the Compensation Committee, was remunerated until the General Assembly of 23 March 2016. 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 8.320 million for the year under review (previous year: CHF 7.736 million). Under the new long-term incentive plan, 2ʼ126 GF registered shares (1ʼ063 restricted shares and 1ʼ063 performance shares) with a total value of CHF 1.773 million, based on a share price of CHF 834 at year end 2016, were granted to members of the Executive Committee for the year under review and thereof 1ʼ063 GF registered shares were transferred. (previous year: 2ʼ050 GF registered restricted shares with a total value CHF 1.392 million).

At the General Assembly of 18 March 2015, a maximum sum of CHF 9.412 million for remuneration of the members of the Executive Committee for the business year 2016 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 paid to the members of the Executive Committee 2016

Fixed salary in cash

Short-term incentive in cash 1

Restricted shares

Perfor- mance shares

Share-based remune- ration 2

Social insu- rance funds 3

Pension funds 4

Jubilee premium 5

Total com- pen- sation 2016 6

Total compen- sation 2015

Executive Committee *

2’993

2’247

1’063

1’773

398

838

8’320

7’736

Of whom Yves Serra, CEO (highest individual compensation)

873

933

425

709

134

256

2’976

2’781

(all in CHF 1’000, except rows “Restricted shares” and “Performance shares”)

* The Executive Committee compensation includes the compensation for Pietro Lori (Executive Committee member until 31 July 2016) and includes the compensation for Joost Geginat (Executive Committee member since 1 May 2016).

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 2016 financial year was approved by the Board of Directors on 17 February 2017. Payment will be made in 2017.

2 The share-based remuneration is based on the long-term incentive plan: Each year, numbers of restricted (RS) and performance shares (PS) are allocated. RS are blocked for five years. The amount of the RS-based compensation is calculated on the basis of the full value of the shares at the year-end price of CHF 834 on 31 December 2016. RS are transferred in 2017. 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 834 on 31 December 2016. The number of PS vesting after the vesting period of 3 years depends on meeting the respective performance criteria.

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

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

5 Based on the Company’s regulation for all employees, the CEO received a jubilee premium of one monthly salary for 25 years employment with GF.

6 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 2016 was higher than in 2015. The increase is explained by the following factors:

–The Executive Committee compensation includes the compensation for Pietro Lori (Executive Committee member until 31 July 2016) and includes the compensation for Joost Geginat (Executive Committee member since 1 May 2016).
–The value of the shares increased from CHF 679 in 2015 to CHF 834 in 2016.
–The short-term incentive related to the financial results of the Corporation and the divisions and to the individual performance was comparable to 2015. Consequently, the overall short-term incentive percentage ranges from 56.9% to 71.8% of the base salary for the Executive Committee members and amounts to 106.9% of the base salary for the Chief Executive Officer.
–The fixed salary was slightly adjusted in order to keep competitive levels in line with the market practice of GF’s industrial sector.
–The employer’s 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.

Starting 1 August 2016 until 31 December 2016, Pietro Lori continued his employment with GF as non-Executive Committee member and the compensation package for this period amounted to CHF 528ʼ384.

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.

Shareholdings of members of the Board of Directors, Executive Committee, or persons related to them

Related persons and companies are defined as family members and persons or companies over which a significant influence can be exercised. Transactions with related persons and companies must be settled on prevailing market terms.

Apart from the compensation paid to the Board of Directors and the Executive Committee and the regular contributions to the various pension fund institutions, no transactions with related persons or companies took place.

Shareholdings Board of Directors

		Number of Georg Fischer registered shares as of 31 Dec. 2016	Number of Georg Fischer registered shares as of 31 Dec. 2015

Andreas Koopmann	Chairman Board of Directors Chairman Nomination Committee	2’181	1’881
Hubert Achermann	Chairman Audit Committee	417	267
Gerold Bührer	Vice Chairman Board of Directors Member Audit Committee	2’872	2’722
Roman Boutellier 1	Member Nomination Committee Member Compensation Committee	2’949	2’799
Riet Cadonau 2	Member Board of Directors	116
Ulrich Graf 3	Chairman Compensation Committee		1’166
Roger Michaelis	Member Audit Committee	717	567
Eveline Saupper 4	Chairwoman Compensation Committee	778	628
Jasmin Staiblin	Member Compensation Committee	895	745
Zhiqiang Zhang	Member Nomination Committee	1’937	2’387
Total Directors		12’862	13’162

1 Member Compensation Committee since the Annual Shareholders’ Meeting 2016 (23 March 2016).

2 Member of the Board of Directors since the Annual Shareholders’ Meeting 2016 (23 March 2016).

3 Chairman Compensation Committee until the Annual Shareholders’ Meeting 2016 (23 March 2016).

4 Chairwoman Compensation Committee since the Annual Shareholders’ Meeting 2016 (23 March 2016).

Shareholdings Executive Committee

		Number of Georg Fischer registered shares as of 31 Dec. 2016	Number of Georg Fischer registered shares as of 31 Dec. 2015*

Yves Serra	President and CEO	5’478	5’528
Roland Abt	CFO, Head of Corporate Finance & Controlling	2’364	2’064
Joost Geginat 1	Head of GF Piping Systems
Josef Edbauer	Head of GF Automotive	2’032	1’732
Pascal Boillat	Head of GF Machining Solutions	1’005	705
Total Executive Committee		10’879	10’029

* The number of Georg Fischer registered shares amounted to 11’963 in 2015 and included the number of registered shares of Pietro Lori (Member Executive Committee until 31 July 2016) of 1’934.

1 Member Executive Committee since 1 May 2016.

The registered shares transferred as part of share-based compensation to the Executive Committee are blocked for at least five years.

As of 31 December 2016, members of the senior management registered a total of 21ʼ374 shares of Georg Fischer Ltd (inclusive Pietro Lori). A total of 45ʼ115 Georg Fischer shares were held by the Board of Directors, the Executive Committee, and the senior management as of 31 December 2016, corresponding to 1.10% of issued shares.

Neither Georg Fischer Ltd nor its Corporate Companies granted any guarantees, loans, advances, or credit facilities to members of the Executive Committee or the Board of Directors or related parties.

Compensation has not involved the allocation of options to current or past members of the Executive Committee or Board of Directors. Neither they nor any related persons possess option rights allocated by GF. As of 31 December 2016, the members of the Executive Committee held no option rights for Georg Fischer registered shares.

In 2016, GF did not make any severance payments to members of the Board of Directors or Executive Committee who left the company in the period under review or earlier.