Compensation, participation in equity, loans
The specifications below follow the directives on information relating to corporate governance issued by the SWX Swiss Exchange and take into consideration the new transparency regulations on compensation set out in the Swiss Code of Obligations Art. 663bbis and Art. 663c. Further details on compensation and benefit expenditure for the management and employees of the Swiss Life Group can be found in the Financial Statements (notes 24 and 31). In addition, the compensation of the members of the Board of Directors and the Corporate Executive Board and their participation interests are shown in the notes to the Swiss Life Holding Financial Statements.
In this Annual Report, the information is presented in a similar way to the previous year. However, in accordance with the new transparency requirements, the compensation of each member of the Board of Directors is listed separately, and the compensation of the Chairman of the Corporate Executive Board (Group CEO) is shown individually.
COMPENSATION POLICY PRINCIPLES | Pursuant to the Organisational Regulations, the Board of Directors as a whole is responsible for establishing the guidelines on the Group’s compensation policy (incl. bonuses, equity compensation programmes and share option programmes) and with regard to employee benefit institutions. The compensation policy underpins the performance culture required by the corporate strategy and forms part of the HR policy. The aim is to retain well-qualified employees and gain new, highly skilled staff. The chosen compensation system is in line with the market environment and must be competitive. The overall compensation takes into account the employees’ professional skills, commitment and personal performance. Individual compensation is made up of a basic salary and variable short-, medium- and long-term salary components, as well as contributions to occupational provisions and risk insurance. The basic salary is determined according to the employee’s function and skill-set, and is annually re-assessed and adjusted if appropriate. The variable salary components are linked to the strategic objectives of the company and the individual divisions, and the associated financial and HR-related targets. Personal performance and target achievement are assessed annually in the employee appraisal procedure implemented throughout the Group (Group Performance System) and taken into consideration when applying the defined compensation policy.
PRACTICE AND PROCEDURE | Pursuant to the Organisational Regulations, the Board of Directors as a whole is responsible for determining the level and make-up of compensation for its members, whereas the Chairman’s Committee, in its capacity as a Compensation Committee, is responsible for putting forward corresponding proposals. The Board of Directors also establishes the guidelines for the company’s compensation policy. In doing so, it takes into consideration the compensation policies of other organisations of comparable size and in comparable industries, drawing its findings from publicly available information and, as necessary, studies by external experts. Based on these guidelines, the Chairman’s Committee determines the compensation for the 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.
Within the framework of the compensation arrangements for the members of the Corporate Executive Board and other key performers within the Swiss Life Group, which are selected by the Corporate Executive Board with the approval 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. Based on the programme, participations are granted future subscription rights, in the form of Performance Share Units (PSUs) 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; 33 297 to the Corporate Executive Board, of which 9604 to the Group CEO.
In 2006, 36 members of the Swiss Life Group senior management participated in the continued equity compensation programme. A total of 46 651 PSUs were allocated; 22 255 to the Corporate Executive Board, of which 7153 to the Group CEO.
For the 2007 equity compensation programme, the Chairman’s Committee of the Board of Directors decided that the retention component (factor of 0.5) which was appropriate during the turnaround phase would be rescinded in the future so that the number of PSUs could drop to zero after three years. The maximum possible factor of 1.5 has been maintained. Furthermore, the programme continues 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 is also compared with the TSR of the shares 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.
In the period under review, 55 members of the Swiss Life Group senior management participated in the corresponding equity compensation programme. A total of 56 222 PSUs were allocated; 24 444 to the Corporate Executive Board, of which 6717 to the Group CEO.
COMPENSATION PAID TO ACTING MEMBERS OF GOVERNING BODIES | Compensation paid in cash to acting members of the Board of Directors and the Corporate Executive Board during the period under review was as follows:
| | | | |
|
| Board of Directors | | 1 543 000 | | 1 479 300 | |
|
| Corporate Executive Board | | 9 572 243 | | 8 859 305 | |
|
Compensation remitted to members of the Board of Directors in the year under review comprised the basic compensation, compensation in cash and a variable compensation component in shares. The basic compensation takes into account membership of the Board of Directors of Swiss Life Holding and its subsidiary Swiss Life/Rentenanstalt as well as membership of the individual Board Committees. The additional compensation in cash is commensurate to the function and workload and is determined annually by the Board of Directors. If Swiss Life Group’s business operations have proved successful, a further, variable compensation component is remitted in the form of Swiss Life Holding shares, decided upon by the Board of Directors taking into consideration the business result.
The following compensation in cash and shares was received by acting members of the Board of Directors of Swiss Life Holding in 2007 during the period under review.
| | | | | |
1 |
|
| Bruno Gehrig | | CHF | | 655 000 | | 312 | |
|
| Gerold Bührer | | CHF | | 238 000 | | 235 | |
|
| Volker Bremkamp | | CHF | | 126 000 | | 152 | |
|
| Paul Embrechts | | CHF | | 82 000 | | 108 | |
|
| Rudolf Kellenberger | | CHF | | 114 000 | | 153 | |
|
| Henry Peter | | CHF | | 82 000 | | 108 | |
|
| Peter Quadri | | CHF | | 82 000 | | 108 | |
|
| Pierfranco Riva | | CHF | | 82 000 | | 108 | |
|
| Franziska Tschudi | | CHF | | 82 000 | | 108 | |
|
|
There were no resignations from the Board of Directors or the Corporate Executive Board in the period under review. In 2006, two new members were appointed to the Corporate Executive Board; one on 1 July of that year.
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 2007 financial year:
| Board of Directors | | 1392 shares, | |
| | allocated at values of CHF 270.56, 256.08 and 243.271. They are subject to a three-year vesting period. | |
|
| Corporate Executive Board | | 6225 shares, | |
| | allocated at a value of CHF 287.732. They are subject to a one-year vesting period. | |
|
|
|
No shares were allocated to closely linked parties3 within the meaning of the law.
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:
| | |
|
| Bruno Gehrig | | 1 636 | | Shares | |
|
| Gerold Bührer | | 1 725 | | Shares | |
|
| Volker Bremkamp | | 742 | | Shares | |
|
| Paul Embrechts | | 558 | | Shares | |
|
| Rudolf Kellenberger | | 710 | | Shares | |
|
| Henry Peter | | 1 638 | | Shares | |
|
| Peter Quadri | | 1 338 | | Shares | |
|
| Pierfranco Riva | | 2 963 | | Shares | |
|
| Franziska Tschudi | | 558 | | Shares | |
|
| | | | | |
|
| | |
|
| Rolf Dörig | | 12 245 | | Shares | |
|
| Bruno Pfister | | 6 723 | | Shares | |
|
| Paul Müller | | 6 290 | | Shares | |
|
| Reto Himmel | | 903 | | Shares | |
|
| Thomas Müller | | 557 | | Shares | |
|
| Patrick Frost | | 557 | | Shares | |
|
OPTIONS | No share options have been granted in the Swiss Life Group since 2003. At the end of 2007 there were no options outstanding. 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 programme 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. The options allocated in 2002 were exercisable up to the end of June 2007 at a strike price of CHF 224.10. 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 reduction in par value of Swiss Life Holding shares as at August 2005 and 2006, the parameters of the options allocated in 2001 and 2002 were adjusted in accordance with Eurex guidelines.
ADDITIONAL HONORIUMS AND REMUNERATIONS | During the period under review no additional honorarium or remuneration payments were made to the 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
| Board of Directors | | none | |
|
| Corporate Executive Board | | none | |
|
EXPENDITURE FOR OCCUPATIONAL PROVISIONS | Details on the company’s benefit expenditure can be found in the Financial Statements (notes 24 and 31) and the notes to the Swiss Life Holding Financial Statements. For reasons of transparency, 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. No such affiliation exists for other members of the Board of Directors; no contributions have been made on their behalf.
The same conditions apply for Bruno Gehrig as for other insured persons. In the period under review, the employer’s contribution assumed by Swiss Life on behalf of Bruno Gehrig amounted to CHF 197 992. This comprised the regular annual contribution of CHF 99 492 and a subsequent contribution of CHF 98 500 due to the increase in the insured income. In addition, Swiss Life paid CHF 652 961 to make up for a gap in full insurance coverage.
Expenditure for occupational provisions in favour of members of the Corporate Executive Board totalled CHF 825 944. The proportion allocated for Rolf Dörig as Group CEO was CHF 238 856; CHF 195 656 as the regular annual contribution and CHF 43 200 as a subsequent contribution due to the increase in the maximum insurable income (Art. 79c BVG).
HIGHEST TOTAL COMPENSATION, BOARD OF DIRECTORS | The highest total compensation for a member of the Board of Directors in 2007 was paid to Bruno Gehrig as Chairman of the Board. The total compensation paid in the form of cash, shares and contributions to occupational provisions in the year under review is as follows:
| Compensation in cash | | CHF | | 655 000 | | | |
|
| Shares | | CHF | | 79 898 | | 312 SLHN shares at CHF 256.084 | |
| Share options | | | | none | | | |
|
| Total compensation 2007: | | | | | | | |
| in cash and shares | | CHF | | 734 898 | | | |
| including annual contributions to occupational provisions of CHF 99 492 | | CHF | | 834 390 | | | |
| including additional contribution to occupational provisions of CHF 751 461 | | CHF | | 1 585 851 | | | |
| Total compensation 2006: | | | | | | | |
| in cash and shares | | CHF | | 694 998 | | | |
| including contribution to occupational provisions | | CHF | | 787 020 | | | |
|
|
|
|
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 the form of cash, shares and contributions to occupational provisions in 2007 is as follows:
| Compensation in cash | | CHF | | 3 510 001 | | | |
|
| Shares | | CHF | | 447 143 | | 1 554 SLHN shares at CHF 287.737 | |
| Share options | | | | none | | | |
|
| Total compensation 2007: | | | | | | | |
| in cash and shares | | CHF | | 3 957 144 | | | |
| including contribution to occupational provisions of CHF 238 856 | | CHF | | 4 196 000 | | | |
| Total compensation 2006: | | | | | | | |
| in cash and shares | | CHF | | 3 759 999 | | | |
| including contribution to occupational provisions | | CHF | | 3 950 039 | | | |
|
|
|
As mentioned above, Rolf Dörig was allocated 6717 Performance Share Units (PSUs) in the year under review as part of the three-year equity compensation programme, which entitle him to Swiss Life Holding shares as at 1 April 2010, provided that the relevant requirements have then been met. On the allocation date of 1 April 2007 the fair value of one PSU was CHF 189.22. Taking into account this mathematical value of the PSUs allocated, which came to CHF 1 270 991, Rolf Dörig’s total compensation for 2007 amounted to CHF 5 466 991.
