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Compensation, participation in equity, loans
Practice and procedure Pursuant to the Organisational Regulations, the Board of Directors as a whole is responsible for determining the level and the make-up of compensation for its members. The Chairman’s Committee, in its capacity as a Compensation Committee, is responsible for putting forward corresponding proposals. The Board of Directors also establishes guidelines for the compensation policy within the Group. In so doing, it takes into consideration the compensation policies of other organisations of comparable size and in comparable industries, with its findings drawn from publicly available information or, as necessary, studies by external experts. Based on these guidelines, the Chairman’s Committee determines the compensation for individual members of the Corporate Executive Board and informs the entire Board of Directors accordingly.
The share option programme for Swiss Life Group management, which was introduced in 2000, was discontinued at the end of 2002. Accordingly, no more share options have been allocated since 2003. The share options issued in the years 2000 and 2001 expired worthless at the end of March 2004 and the end of May 2006.
Within the framework of the compensation arrangements for the members of the Corporate Executive Board and other key performers within the Swiss Life Group, set by the Corporate Executive Board with the concurrence of the Chairman’s Committee, a long-term remuneration component was introduced in 2004 on the basis of corresponding regulations. This equity compensation programme was adjusted slightly in 2005 by defining specific performance criteria. These take account of both the performance of the Swiss Life Holding share and its performance vis-à-vis other companies in the market. Participants are granted future subscription rights, in the form of Performance Share Units (PSU) on Swiss Life Holding shares, entitling them to receive Swiss Life Holding shares free of charge after a period of three years has elapsed insofar as the relevant prerequisites have been satisfied. The number of PSUs can increase no more than by a factor of 1.5, or drop by 0.5, within three years, depending on how the performance criteria develop. In 2005, 37 members of the Swiss Life Group senior management participated in this programme. A total of 67 412 PSUs were allocated in 2005; a total of 33 297 for the Corporate Executive Board, of which 9604 to the Group CEO.
During the review period, 36 members of the Swiss Life Group senior management participated in the corresponding continued equity compensation programme. A total of 46 651 PSUs were allocated; a total of 22 255 for the Corporate Executive Board, of which 7153 to the Group CEO.
With a view to the upcoming 2007 equity compensation programme, the Chairman’s Committee of the Board of Directors has decided that the retention component (factor of 0.5) which was appropriate during the turnaround phase will be rescinded in future so that the number of PSUs could drop to zero after three years. The maximum possible factor of 1.5 will be maintained. Furthermore, the programme will continue to be based on two performance criteria, each with a 50% weighting. One criterion is the Total Shareholder Return on Swiss Life Holding shares (TSR Swiss Life Holding), whereby a performance in excess of 20% is required for the subscription right to share allocation to arise. The TSR of the company’s own shares will also be compared with the TSR of the companies included in the Dow Jones STOXX 600 Insurance Index (TSR outperformance); on the basis of this criterion, a subscription right arises if the performance is above the first quartile in comparison with the companies in question on expiry of the three-year period.
Further details on compensation and benefit expenditure for the Swiss Life Group management and employees can be found in the Financial Statements (notes 25 and 33).
Compensation paid to acting members of governing bodies Compensation paid to acting members of the Board of Directors and the Corporate Executive Board during the period under review was as follows:
The following compensation was received by acting members of the Board of Directors of Swiss Life Holding in 2006 during the year under review.
There was one resignation from both the Board of Directors and the Corporate Executive Board during the review period; in 2006 a new member of the Board of Directors was appointed, and two new members of the Corporate Executive Board were approved.
Compensation paid to former members of governing bodies None.
Share allotment in the year under review Swiss Life Holding shares were allocated to members of the Board of Directors and the Corporate Executive Board as follows during the 2006 financial year:
No shares were allocated to closely linked parties4) within the meaning of the law.
4) “Closely linked parties” are natural persons and legal entities pursuant to Art. 678 of the Swiss Code of Obligations that have close personal, economic, legal or de facto ties with members of governing bodies. This typically includes spouses, minor children, companies controlled by the member of the governing body, and natural or legal persons serving the member of the governing body in a fiduciary capacity.
Share ownership On the balance sheet date, acting members of the Board of Directors and the Corporate Executive Board (including closely linked parties) held a total number of Swiss Life Holding registered shares as follows:
Options No share options have been granted in the Swiss Life Group since 2003. Options on shares of Swiss Life/Rentenanstalt were allocated to the members of the Board of Directors and Corporate Executive Board in 2000, 2001 and 2002 in the context of the share option plan introduced in 2000 for the entire senior management of the Swiss Life Group, and were subsequently converted into options on Swiss Life Holding shares. At the end of 2002 this share option programme was discontinued with effect from 2003. The share options allocated in the years 2000 and 2001 expired worthless at the end of March 2004 and the end of May 2006. In connection with the exchange of Swiss Life/Rentenanstalt shares for shares of Swiss Life Holding and the capital increases in autumn 2002 and spring 2004 as well as the reductions in par value of the Swiss Life Holding shares in August 2005 and 2006, the parameters of the options allocated in 2001 and 2002 were adjusted in accordance with Eurex guidelines. No other changes have been made to the allocated share options.
Additional honorariums and remunerations During the period under review no additional honorarium or remuneration payments were made to members of the Board of Directors or the Corporate Executive Board.
Loans On the balance sheet date, there were no loans outstanding to members of the Board of Directors or members of the Corporate Executive Board.
Expenditure for occupational provisions Details on benefit expenditure can be found in the Financial Statements (notes 25 and 33). For reasons of transparency, details of the following benefits are provided here:
As Chairman of the Board of Directors, Bruno Gehrig is affiliated to the employee benefits institutions of Swiss Life for the purpose of occupational provisions. The same conditions as for other insured persons apply. The expenditure for occupational provisions for Bruno Gehrig assumed by Swiss Life in the period under review amounted to CHF 92 022. No such affiliation exists for other members of the Board of Directors; no contributions have been made on their behalf.
Expenditure for occupational provisions in favour of members of the Corporate Executive Board totalled CHF 689 796 in the period under review, of which CHF 190 040 for Rolf Dörig as Group CEO. No special allocations in the form of purchases of insurance years, etc. were made.
As a result of the changes in the law which became effective on 1 January 2006 pertaining to occupational provisions and the associated reduction in employee benefits, as well as the simultaneous reduction of expenditure for occupational provisions on the part of the employer, Swiss Life paid a sum of CHF 1 240 000 to Rolf Dörig to equalise the limitation of the insurable salary. Tax advantages which cease to apply under the new legal provisions governing the insurable salary are not compensated. No additional expenditure arises for Swiss Life as a result of this measure.
Highest total compensation, Board of Directors The highest total compensation for a member of the Board of Directors in 2006 was paid to Bruno Gehrig as Chairman of the Board. The total compensation paid in the year under review is as follows:
Highest total compensation, Corporate Executive Board The highest total compensation for a member of the Corporate Executive Board was paid to Rolf Dörig as Group CEO. The total compensation paid in 2006 was as follows:
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