Determination process

Based on a proposal submitted by the CEO, the NCC discusses the financial and individual targets to be set for the members of the GEB for the coming financial year at the end of every year. It submits its proposals to the entire BoD for approval.

Compensation of the BoD and the variable compensation of the GEB is determined every year in February after the close of the financial year by the full BoD based on the proposals of the NCC, subject to approval by the Annual General Meeting. The base salary of the GEB for the upcoming year is determined in December of the previous year by the full BoD at the request of the NCC.

When setting its own compensation, all members of the BoD are present and they all have decision-making authority.

When setting the aggregate compensation of the BoD and the GEB, data for listed international industrial companies with a similar geographic footprint and of a similar size and with headquarters in Switzerland are consulted, and the area of responsibility, the individual performance and experience of the respective member are also taken into consideration. This data is reviewed on a regular basis.

In the year under review, the peer group included: Arbonia AG, Autoneum, Bossard AG, Bucher Industries AG, EMS-Chemie AG, Geberit AG, Georg Fischer AG, Huber+Suhner AG, Rieter Holdings AG, Stadler Rail AG and VAT Vakuumventile AG.

Responsibility for determination of variable compensation and aggregate compensation is shown in the following table:

As stated in the Articles of Association, each year the Annual General Meeting approves the aggregate amounts decided by the BoD for:

1. Compensation of the BoD for the term of office up to the next Annual General Meeting
2. Any additional compensation of the BoD for the preceding financial year
3. The variable compensation of the CEO and the GEB based on the operational results and individual objectives achieved in the preceding financial year, to be paid immediately after approval
4. The fixed compensation of the CEO and the GEB to be paid in the following financial year

If the Annual General Meeting does not approve the proposed amount of the fixed compensation or the variable compensation, the BoD may convene a new extraordinary Annual General Meeting and submit new proposals for approval. Alternatively, it may submit the proposals for compensation for retrospective approval at the next ordinary Annual General Meeting.

The respective amounts of aggregate compensation include all social and pension plan contributions due from the members of the BoD and the GEB and of the company (employee and employer contributions).

If new members are appointed to the GEB or existing members promoted and take up their position with the company after the Annual General Meeting has approved the maximum aggregate amount of fixed compensation for members of the GEB for the next financial year, these members may be paid no more than 25% of the aggregate compensation most recently approved for the GEB by the Annual General Meeting for the period up to the next Annual General Meeting.