Compensation Report

Introduction by the Chairwoman of the Compensation Committee

Dear shareholders

On behalf of the Board of Directors of GF and of the Compensation Committee, I am pleased to present the 2017 compensation report.

The Board of Directors decided to adapt the long-term incentive plan as per 1 January 2017, based on an intensive, continuous dialogue with our shareholders and proxy advisors. In addition, minimum shareholding ownership guidelines for the members of the Board of Directors and members of the Executive Committee have been introduced.

The new long-term incentive plan is based on the following principles: 

  • The entirety of the award will be granted as performance shares. The vesting of the performance shares is conditional upon the fulfillment of future performance conditions.
  • The performance conditions include Earnings per Share (EPS) as internal measure and relative Total Shareholder Return (rTSR) as external measure. Therefore, the performance criteria are well balanced in terms of both internal and external views.
  • The EPS value targets have been linked to the Strategy 2020 goals of GF and the rTSR targets are linked to the SMI-Mid.
  • The vesting period is three years, followed by a further blocking period of two years on the vested shares. The plan is truly long-term focused. Further details on the plan can be found in chapter Architecture of Compensation.

The Board of Directors trusts that the changes made to the compensation architecture address the concerns raised by our shareholders. The compensation report for 2017 newly provides an Executive Summary; all other content does not differ from previous years and continues to provide a high level of transparency.

At the upcoming Annual Shareholders’ Meeting, we will ask you to approve, as last year, prospectively in a binding vote the maximum amounts of compensation for the Board of Directors until the next Annual Shareholders’ Meeting, and the maximum amount of compensation for the Executive Committee for the next business year. Further, you will have the opportunity to express your opinion on the compensation report in a consultative vote.

We always welcome comments on our compensation systems, and we trust that you will find this report interesting and informative.

Sincerely


Eveline Saupper

Chairwoman of the Compensation Committee