Compensation Report

5. Additional information on compensation, guarantees, loans, and credits for the business year 2022 

5.1 Compensation to the Board of ­Directors in the business year 2022

In 2022, the members of the Board of Directors received a total compensation of CHF 1.4 million (previous year: CHF 1.4 million) in the form of fixed compensation of CHF 0.8 million (previous year: CHF 0.7 million), share-based compensation of CHF 0.6 million (previous year: CHF 0.6 million) and national insurance contributions of CHF 0.1 million (previous year: CHF 0.1 million).

In 2022, the total compensation paid to the Board of Directors was 2.5% higher than during the previous year as a result of the following factors:

• New compensation structure introduced as of the term of office 2021/2022;
• Expansion of the Board of Directors by one member from the term of office 2022/2023 to a total of seven members.

Compensation for the members of the Board of Directors

The Annual General Meeting 2022 approved a maximum budget of CHF 1.7 million for the Board of Directors for the period of office from the Annual General Meeting 2022 to the Annual General Meeting 2023. The compensation effectively paid during the period under consideration in this Compensation Report (1 January to 31 December 2022) is within this budget approved by the shareholders. The final reporting for the entire period from the Annual General Meeting 2022 to the Annual General Meeting 2023 is included in the Compensation Report 2023.

At the Annual General Meeting on 26 March 2021, the shareholders approved a maximum total compensation of CHF 1.6 million for the Board of Directors during the period of office from the Annual General Meeting 2021 to the Annual General Meeting 2022. The compensation effectively paid to the members of the Board of Directors over this period was CHF 1.3 million and therefore is within this approved budget.

5.2 Compensation of the Group Executive Committee in the business year 2022

For 2022, the members of the Group Executive Committee received a total compensation of CHF 4.8 million (previous year: CHF 5.1 million) in the form of fixed compensation of CHF 1.9 million (previous year: CHF 1.9 million), incentives of CHF 1.9 million (previous year: CHF 2.1 million), other payments including the value of the discount on the shares of CHF 0.3 million (previous year: CHF 0.4 million) and employer national insurance contributions for social security and pension funds of CHF 0.7 million (previous year: CHF 0.8 million).

The total compensation paid to the Group Executive Committee in 2022 was 6.7% lower than during the previous year as a result of the following factors:

• STI amounts for 2022 compared with the previous year due to a lower Group net profit in 2022;
• Difference between daily share price and volume-weighted average share price less discount of purchased shares on the grant date;
• EUR/CHF exchange rate differences compared with the previous year;

In 2022, the Group achieved a net profit of EUR 56.7 million. Consequently, the variable cash compensation in 2022 amounted to 2.0% of the net profit for the members of the Group Executive Committee (previous year: 2.2%).

The variable cash compensation for the CEO amounted to 70% of the fixed compensation and, for the other members of the Group Executive Committee, a maximum of 72% of their fixed compensation.

The PSU allocations made in 2020 as part of the LTI plan (LTI 2020-2022) can be transferred during the first quarter of 2023. Of the performance conditions, 50% is based on the relative total shareholder return (rTSR) and the remaining 50% is based on the increase in earnings per share (EPS growth). The two performance conditions were achieved, rTSR at 143.4% and EPS growth at 149.3%, resulting in a combined performance factor of 146.4% for the payment. Accordingly, 16,316 PSUs were converted into 16,316 Zehnder shares.

The highest compensation for a member of the Group Executive Committee was paid to the CEO, Matthias Huenerwadel, in the reporting year as in the previous year.

The Annual General Meeting 2022 authorised a maximum budget for the compensation of the Group Executive Committee of CHF 5.7 million for the financial year 2022. The total compensation amount of CHF 4.8 million paid to the Group Executive Committee for the fiscal year 2022 as disclosed in the following table is below this upper limit.

Compensation for the members of the Group Executive Committee

5.3 Guarantees, loans, credits, etc.

No Zehnder Group company has provided any guarantees, waivers of claims outstanding, credits or loans to present or former members of the Board of Directors, to present or former members of the Group Executive Committee, or to persons closely associated with these individuals. No loans to current or former members of the Board of Directors or Group Executive Committee or related parties existed at the end of the reporting year.

5.4 Compensation to former members of the Board of Directors and of the Group Executive Committee, and to persons closely associated with them, in the business year 2022

No compensation was paid to former members of the Board of Directors or the Group Executive Committee in the reporting year.

No compensation was paid to persons closely associated with members of the Board of Directors or the Group Executive Committee.