Compensation Report
3. Architecture of compensation of the Board of Directors
In order to guarantee independence in their supervisory position for the Group Executive Committee, members of the Board of Directors receive fixed compensation only, consisting of a fixed annual retainer, fixed cash compensation for their membership of committees of the Board of Directors, and an expense allowance.
To strengthen alignment with long-term shareholder interests, payment of the fixed annual retainer for the Board of Directors is made half in cash and half in the form of Zehnder Group registered shares A. The number of shares awarded is determined based on the volume-weighted average share price in the period between 1 and 31 December of the preceding year. The shares are subject to a restriction period of three years during which they cannot be sold, transferred, or pledged. The restriction period also applies in the case of termination of the mandate, except in case of death or change of control, where the restriction immediately lapses.
The cash compensation is paid out monthly and the registered shares A are allocated in January for the current compensation period corresponding to the term of office from the Annual General Meeting of the previous year to the Annual General Meeting of the reporting year.
Additional compensation is permitted for members of the Board of Directors for advisory services to the company or for activities in companies that are controlled directly or indirectly by the company. This compensation is reflected in the total amount of compensation paid to the Board of Directors, which must be approved at the Annual General Meeting.
The compensation structure of the Board of Directors is summarised in the following table.
Architecture of compensation of the Board of Directors
CHF | In cash | In shares1 |
Retainer (gross p.a.) | ||
Chairman of the Board of Directors2 | 210,000 | 210,000 |
Vice Chairman of the Board of Directors3 | 90,000 | 90,000 |
Members of the Board of Directors | 50,000 | 50,000 |
Expense allowance (gross p.a.)4 | 2,000 | |
Committee fees (gross p.a.) | ||
Chairman of the Nomination and Compensation Committee or Audit Committee | 50,000 | |
Member of the Nomination and Compensation Committee or Audit Committee | 25,000 |
1Converted into shares on the basis of volume-weighted average share price in the period between 1 and 31 December.
2Further duties of the Chairman of the Board of Directors are listed in the Corporate Governance Report.
3The Vice Chairman of the Board of Directors also fulfils the role of Lead Independent Director.
4The Chairman and Vice Chairman of the Board of Directors are paid an expense allowance in line with the company’s rules on executives’ expenses depending on the work commitment (currently 50% for the Chairman of the Board of Directors and 25% for the Vice Chairman). No expense allowance is paid to members of the Board of Directors based outside Switzerland. If the actual business expenses exceed CHF 2,000 p.a., they are reimbursed on an actual cost basis.