Compensation governance

The Articles of Association of GF contain provisions regarding the compensation principles applicable to the Board of Directors and to the Executive Committee. Those provisions are available on GF’s website and include:

According to articles 22 and 23 of the Articles of Association, the Annual Shareholders’ Meeting approves annually the maximum aggregate compensation of the Board of Directors for the period from the Annual Shareholders’ Meeting to the next Annual Shareholders’ Meeting, as well as the maximum aggregate compensation of the Executive Committee for the following calendar year. In addition, the Compensation Report is submitted to the Annual Shareholders’ Meeting for an advisory vote on a yearly basis, so that shareholders can express their opinion on the compensation policy and programs.

The Compensation Committee consists of three non-executive Members of the Board of Directors who are elected annually and individually by the Annual Shareholders’ Meeting for a one-year period until the next Annual Shareholders’ Meeting. At the 2021 Annual Shareholders’ Meeting, Eveline Saupper (Chairwoman) and Riet Cadonau were re-elected as Members of the Compensation Committee, Hubert Achermann was elected as a new Member of the Compensation Committee.

The Compensation Committee supports the Board of Directors with the following duties:

During 2021, the Compensation Committee performed the following regular tasks:

The Compensation Committee convenes as often as necessary, but at least twice per year. In 2021, the Committee held three meetings of approximately two hours, each according to the schedule below:

In 2021, all Compensation Committee members attended all meetings. The Chairman of the Board, the CEO, the Head of Corporate Human Resources, and the Head of Corporate Compensation and Benefits are invited to attend the Compensation Committee meetings in an advisory capacity. The Chairman of the Board and the CEO do not attend the meeting when their own compensation or performance is discussed.

The Chairwoman of the Compensation Committee reports to the Board of Directors after each meeting on the activities of the Compensation Committee. The minutes of the Compensation Committee meetings are available to all Members of the Board of Directors.

The compensation proposals and decisions are made based on the following levels of authority:

On behalf of the Board of Directors, internal and external Auditors annually review the compliance of the compensation decisions made with the Articles of Association, the Organizational Rules and the compensation regulations for the Executive Committee and the Board of Directors.

The Compensation Committee regularly calls in external compensation specialists and consultants to obtain independent advice and/or benchmarking compensation data. In the year under review, Agnès Blust Consulting provided services related to Board of Directors and Executive Committee compensation matters. Obermatt was appointed to measure the relative performance of Georg Fischer for the purpose of the long-term incentive plan. These companies have no other mandates with GF.

The compensation structure and levels of the Board of Directors and the Executive Committee are reviewed every two to three years and are tailored to the relevant sectors and labor markets in which GF competes for talent. For the purpose of comparison, the Compensation Committee relies on compensation surveys published by independent consulting firms and on publicly available information such as the compensation disclosures of comparable companies.

Comparable companies are defined as multinational industrial companies listed on the Swiss stock exchange (SIX) with a similar business model and size in terms of market capitalization, sales, number of employees, complexity, and geographic scope. The peer group for the compensation benchmark of the Board of Directors and the Executive Committee include the following Swiss companies: Bucher Industries, DKSH, Dormakaba, Geberit, OC Oerlikon, SIG Combibloc, Sonova, Straumann, Sulzer. The benchmarking on compensation was last conducted in 2021.

The Compensation Committee also takes into consideration effective business and individual performance while determining the compensation amounts to be paid to the CEO and to the other Members of the Executive Committee. Individual performance is assessed through the annual Management By Objectives (MBO) process, where individual objectives are defined at the beginning of the year and the achievement against those objectives is evaluated at the end of the year. The objective setting and the performance assessment of the Members of the Executive Committee are conducted by the CEO and by the Chairman of the Board for the CEO. The performance assessment of the CEO and the other Members of the Executive Committee is reviewed by the Compensation Committee.