Swiss Life Compensation Report for the Financial Year 2014


Revised Articles of Association
The Ordinance against Excessive Compensation in Listed Stock Companies (Compensation Ordinance, VegüV) came into force on 1 January 2014. In order to implement these provisions, the General Meeting of Shareholders of Swiss Life Holding resolved on 23 April 2014 on a corresponding proposal by the Board of Directors to amend the Articles of Association. The amendments take account of the new requirements and powers of the General Meeting of Shareholders in relation to corporate governance and compensation.

With regard to the compensation system, the key principles of the compensation policy of the Swiss Life Group have been incorporated into the Articles of Association. The members of the Board of Directors are granted exclusively fixed compensation. This is paid partly in blocked Swiss Life Holding shares, with the amount, date of allocation and duration of the blocking period set by the Board of Directors. The members of the Corporate Executive Board are entitled to a fixed basic salary and, if applicable, a short- and long-term variable compensation component. The variable compensation for members of the Corporate Executive Board has been limited under the Articles of Association to a maximum 181% of the fixed basic salary.

Pursuant to the revised Articles of Association, the General Meeting of Shareholders is responsible for approving the maximum total amount of fixed compensation for the Board of Directors until the next ordinary General Meeting. The General Meeting of Shareholders also votes on a prospective basis on the maximum amount of the fixed compensation and the long-term variable compensation component (equity compensation plan) for the Corporate Executive Board for the next financial year. By contrast, the short-term variable compensation component for the Corporate Executive Board is submitted for approval to the General Meeting of Shareholders on a retrospective basis for the previous financial year, in full cognisance of the respective business figures.

Since 2009, Swiss Life has given shareholders the opportunity to hold a separate advisory vote at the General Meeting on the compensation report for the relevant financial year. The outcome of the vote is important for the Board of Directors in their assessment and structuring of compensation. A vote on the compensation report will continue to be held in the future in line with good corporate governance practice.

On the basis of the new powers of the General Meeting of Shareholders in relation to compensation under the Articles of Association, which came into effect on 1 January 2015, the compensation for the Board of Directors and the Corporate Executive Board will be submitted for approval to the General Meeting of Shareholders on 27 April 2015 for the first time.

For the Board of Directors: The exclusively fixed compensation until the 2016 ordinary General Meeting.
For the Corporate Executive Board: The short-term variable compensation component for the 2014 financial year and the maximum total amount of the fixed compensation and the long-term variable compensation (equity compensation plan) for the 2016 financial year.

The proposed budget/maximum amount for the fixed and long-term variable compensation for the Corporate Executive Board for the 2016 financial year represents an upper limit, which would only be exhausted in the case of exceptional business performance. The Board of Directors will determine the fixed compensation and the long-term variable compensation component for the Corporate Executive Board at the beginning of 2016 and will detail the key underlying factors in the respective compensation report, on which the shareholders can in turn hold an advisory vote.

The revised Articles of Association of Swiss Life Holding can be viewed online and printed out at www.swisslife.com, “About us” area, “Organisation” section, “Corporate Governance” and “Articles” subsections (www.swisslife.com/association). For stipulations on compensation and on the approval of compensation for the Board of Directors and the Corporate Executive Board, particular reference is made to Articles 14, 15 and 16 of the Articles of Association.

Guidelines and standards
The following information takes into account the requirements under the directive of the SIX Swiss Exchange on information relating to corporate governance and Circular 2010/1 of the Swiss Financial Market Supervisory Authority FINMA on minimum standards for remuneration schemes of financial institutions, as well as the transparency requirements under the Compensation Ordinance.

Additional information on compensation and benefit expenditure for the management and employees of the Swiss Life Group can be found in the Consolidated Financial Statements (notes 23 and 29) on pages 210 to 219 and 231 to 232. The information according to Art. 663c of the Swiss Code of Obligations regarding the shareholdings of members of the Board of Directors and the Corporate Executive Board is shown in the Notes to the Swiss Life Holding Financial Statements on pages 265 to 267.

The information on compensation granted to Corporate Executive Board members also includes the variable compensation, which was determined by the Board of Directors at the beginning of 2015 and is published on an accrual basis as compensation for the 2014 financial year. The members of the Board of Directors are granted exclusively fixed compensation, payable 70% in cash and 30% in Swiss Life Holding shares; the allocated shares are subject to a three-year blocking period.

The compensation received by each member of the Board of Directors, and that of the acting Chairman of the Corporate Executive Board (Group CEO), who in the period under review received the highest compensation of the members of the Corporate Executive Board, is disclosed on an individual basis.

Compensation policy principles
The compensation policy principles are governed by the Articles of Association of Swiss Life Holding. Within this framework, the Board of Directors as a whole establishes the compensation policy guidelines for the Group (incl. variable compensation and equity compensation plans) and relevant guidelines for the employee benefit institutions.

The compensation policy underpins the performance culture required by the corporate strategy and is part of the HR policy. The aim is to retain well-qualified employees and gain new, highly skilled staff. The compensation system is in line with the market environment and must be competitive. The individual overall compensation takes into account the employee’s professional skills, engagement and personal performance. It is made up of the basic salary, a short-term variable compensation component based on achievement of the annual objectives, which is generally paid in cash and possibly in shares and, if applicable, as deferred compensation in cash, and a long-term variable compensation component in the form of an equity compensation plan, as well as contributions to occupational provisions and risk insurance.

Chart



The salary is determined according to the employee’s function and skill set, and is annually reassessed and adjusted if appropriate. Salary comparison studies and recognised job evaluation systems are used to check appropriateness and to ensure internal and external comparability.

The variable compensation components are linked to the strategic objectives of the Group and the individual divisions, and the associated financial and HR-related targets. They are based on the achievement of annual objectives defined in advance for a period of three years as part of medium-term planning and determined on the basis of the actual performance of individuals or teams in relation to the objectives set (performance-linked payment) and on the degree of achievement of the Swiss Life Group targets as reflected in its annual result (share in the company’s success). Quantitative and qualitative performance is assessed also on the basis of the competencies required for the function held, such as professional expertise, entrepreneurship, task fulfilment, cooperation and leadership. The percentage weighting between the individual and/or team performance and the share in the company’s success depends on the position and responsibilities of the function holder.

The share in the company’s success is measured using quantitative Group targets (Key Performance Indicators, KPIs), which are defined in advance for the following three years as part of medium-term planning. The main KPIs for the medium-term planning are, besides the annual profit, the planned cost savings, the risk and fee result, new business profitability, the return on equity and solvency (Swiss Solvency Test, SST). In order to avoid conduct aimed at the short-term achievement of key indicators with a higher weighting, the individual KPIs are not mechanistically weighted in advance. Their individual weighting is determined at the end of each financial year by the Board of Directors as a whole on the basis of a proposal by the Compensation Committee taking all developments into account and consideration (discretionary decision).

Personal performance based on the specified quantitative and qualitative objectives is assessed annually in the employee appraisal procedure implemented throughout the Group (Group Performance System, GPS). Two assessment elements/models are used for determining objectives and evaluating performance: The Group Objectives Model (GOM) relating to qualitative and quantitative objectives and the Group Competency Model (GCM) for measuring and assessing individual competencies and behaviour, including the compliance regulations.

For persons responsible for risk management and risk control, the quantitative objectives are set in such a way that performance is not linked to the result of the monitored business unit, specific products or transactions.

In order to be eligible for any variable compensation, a GPS target achievement of at least 80% is required.

Permanent employment contracts in Switzerland contain notice periods of between three and twelve months, depending on position and seniority. All current employment contracts with members of the Corporate Executive Board specify a notice period of twelve months. Members of the Corporate Executive Board have no contractual entitlements to severance payments. Likewise members of the Board of Directors have no such entitlements.

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 Compensation Committee is responsible for putting forward appropriate proposals (for the internal organisation of the Board of Directors see “Internal organisational structure”, pages 37 to 40). The Board of Directors as a whole also establishes the guidelines for the company’s compensation policy. In doing so, it takes into consideration the compensation policies of other companies in the financial services industry, drawing its findings from publicly available information and studies by independent external experts. Comparable companies in the insurance sector in Switzerland used for the purposes of providing relevant information for the current compensation policy included Allianz, AXA, Baloise Insurance, Swiss Re and Zurich Insurance Group.

The Board of Directors as a whole also sets the level and distribution of the variable compensation pool for all employees on the basis of its compensation policy guidelines based on a proposal by the Compensation Committee. When determining the level of the allocation to the compensation pool, it takes into consideration the annual result, as well as the medium-term planning and the degree of target achievement.

Finally the Board of Directors as a whole is responsible for determining the individual compensation of members of the Corporate Executive Board.

As part of the implementation of the Compensation Ordinance and based on the amended Articles of Association as in force on 1 January 2015, the General Meeting of Shareholders approves, on the basis of a proposal by the Board of Directors, the maximum total amount of fixed compensation and long-term variable compensation for the Corporate Executive Board for the following financial year. This prospective approval excludes the short-term variable compensation component for the Corporate Executive Board, which is approved by the General Meeting of Shareholders retrospectively for the previous financial year. In addition, the General Meeting of Shareholders can, under Article 16 of the Articles of Association, pass a resolution at any time to retrospectively increase an approved total amount. If new members of the Corporate Executive Board are appointed after a resolution approving the compensation has been passed, the Articles of Association stipulate that a supplementary amount of a maximum 40% of the total amount for the year in question is available for their compensation and to offset any disadvantages in connection with the change of job; this does not require the approval of the General Meeting of Shareholders.

The Board of Directors carries out an annual performance assessment of all members of the Corporate Executive Board, based on preparatory work by the Compensation Committee. In addition, current aspects of HR policy and, in particular, succession planning are regularly discussed at meetings of the Compensation Committee and the Board of Directors as a whole.

The Board of Directors may consult independent professionals where deemed appropriate. In the year under review, Swiss Life was advised on specific compensation-related matters by PricewaterhouseCoopers (PwC).

Within the framework of the compensation arrangements for members of the Corporate Executive Board, “deferred compensation in cash” was introduced as a new compensation component on 1 January 2012. On the basis of the corresponding regulations, a portion of the short-term variable cash compensation determined by the Board of Directors is not paid immediately but after a period of three years has elapsed and provided that the regulatory requirements are satisfied at that point. The allocated deferred compensation in cash represents an entitlement during the three-year deferral period. The underlying “deferred cash plan” also provides for adjustment and reclaiming mechanisms (clawback). A full or partial reduction of the deferred compensation is provided for in the following cases: negative impact of the key figures applying to the allocation of deferred compensation due to a restatement of the annual accounts or damage to Swiss Life as a result of a violation of statutory, regulatory or compliance standards by participants in the plan. If the employment relationship is terminated by a participant during the three-year deferral period for deferred compensation in cash, the entitlements expire worthless (retention component). For the 2014 financial year, the Board of Directors has determined that, as in the previous year, as from a variable compensation amount in cash of CHF 500 000, 23% of the total variable compensation in cash is to be allocated as deferred compensation in cash.

As a long-term variable compensation component linked to the performance of the Swiss Life Holding share price and to the medium-term planning and degree of target achievement, an equity compensation plan has been in place since 2004 for members of the Corporate Executive Board and other key performers within the Swiss Life Group, who are determined by the Corporate Executive Board with the approval of the Compensation Committee. Based on this plan, participants are granted future subscription rights to Swiss Life Holding shares. These subscription rights entitle the participants to receive Swiss Life Holding shares free of charge after a period of three years has elapsed and provided that the requirements under the plan are satisfied at that point.

Since 2011 participants in the equity compensation plan have been allocated Restricted Share Units (RSUs) on 1 April (2011–2013 equity compensation plans) or on 1 March (equity compensation plans from 2014). The RSUs grant the holder future subscription rights, entitling them to receive Swiss Life Holding shares free of charge after a three-year period has elapsed. The attribution of shares after the expiry of the three-year deferral period is effected on a 1:1 basis (1 RSU = 1 share): the plan is therefore very simple, transparent throughout the whole term and directly linked to the performance of the Swiss Life Holding share price. The value of RSUs during the three-year term develops linear with the Swiss Life Holding share price and thus symmetrically corresponds with shareholder interests. 55 members of Swiss Life Group senior management participated in the 2012 equity compensation plan, in which a total of 94 040 RSUs were allocated; 28 460 in total to the Corporate Executive Board, of which 7100 to Bruno Pfister, in his capacity as Group CEO at the time. 56 members of Swiss Life Group senior management participated in the 2013 equity compensation plan. A total of 74 630 RSUs were allocated; 18 590 in total to the members of the Corporate Executive Board, of which 3360 to Bruno Pfister as Group CEO at the time. Altogether 57 members participated in the 2014 equity compensation plan, in which a total of 57 223 RSUs were allocated; 14 432 in total to the Corporate Executive Board, of which 4226 to Bruno Pfister as Group CEO at the time. A total of 51 members of Swiss Life Group senior management participated in the 2015 equity compensation plan. A total of 51 660 RSUs were allocated; 13 288 in total to the members of the Corporate Executive Board, of which 3644 to Patrick Frost in his capacity as Group CEO since 1 July 2014.

The 2013–2015 equity compensation plans are based on the Group-wide programme “Swiss Life 2015”, which was announced at the Swiss Life Group’s Investors’ Day on 28 November 2012 (see www.swisslife.com/investorsday2012). On the basis of the medium-term planning 2013–2015 (2013 equity compensation plan) and 2014–2016 (2014 equity compensation plan), performance criteria relating to cost efficiency (50% weighting), the risk and fee result (25% weighting) and IFRS profit (25% weighting) have been determined by the Board of Directors. With regard to the 2015 equity compensation plan, the Board of Directors has set the following performance criteria on the basis of the medium-term planning 2015–2017: IFRS profit (50% weighting), the risk and fee result (25% weighting) and Cash to Swiss Life Holding for further strengthening of the financial substance and payout capacity (25% weighting). After expiry of the thee-year period of the RSU plan, the target value for each performance criterion according to the medium-term planning is compared with the actual result achieved. The share allocation corresponds to the number of allocated RSUs (1 RSU = 1 share) if all three performance criteria have been achieved or exceeded after the three-year period has elapsed; overperformance does not lead to a higher share allocation. If the targets are only partly achieved, the share allocation is correspondingly reduced in accordance with the weighting of the performance target concerned or the RSUs expire worthless.

The attribution of the long-term variable compensation component (equity compensation plan, RSU plan) is deferred for a period of three years from the date of allocation as is the case with the deferred compensation in cash. Likewise, the RSU plans provide for adjustment and reclaiming mechanisms (clawback). These apply in the case of a negative impact of the key figures applying to the allocation of deferred compensation due to a restatement of the annual accounts and in the case of damage to Swiss Life as a result of a violation of statutory, regulatory or compliance standards. If the employment relationship is terminated by a participant during the three-year term of the RSU plan, the future entitlements expire worthless.

Compensation to members of the Board of Directors
The members of the Board of Directors are granted exclusively fixed compensation. This is paid 70% in cash and 30% in Swiss Life Holding shares; the shares are subject to a three-year blocking period.

The compensation takes into account membership of the Board of Directors of Swiss Life Holding and its subsidiary Swiss Life Ltd, as well as membership of the individual Board Committees, and is commensurate with the individual’s function and workload.

As Chairman of the Board, Rolf Dörig 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 and no contributions have been made on their behalf.

For the period from the 2014 Annual General Meeting of Shareholders to the 2015 General Meeting, the Board of Directors determined the compensation for the members of the Board of Directors, with the exception of the Chairman, at the same level as for the 2012 and 2013 financial years. For the Chairman of the Board of Directors the fixed compensation in cash and in blocked shares was reduced by CHF 240 000 to CHF 1 200 000 as from the 2014 General Meeting of Shareholders. In relation to the 2014 calendar year, this amounts to compensation in cash and in blocked shares of CHF 1 280 401.

The compensation paid to members of the Board of Directors in the 2014 financial year is shown on an individual basis in the 2014 compensation table below. For comparison purposes, the compensation for the 2013 financial year is shown again after the 2014 compensation table.

Compensation in blocked shares is reported in both tables on the basis of the respective stock exchange closing prices on the day of allocation. The economic value at allocation, which is equal to the tax value, is indicated in footnote 3.

As part of the implementation of the Compensation Ordinance and based on the Articles of Association of Swiss Life Holding as amended at the 2014 General Meeting, the maximum amount of the fixed compensation for the Board of Directors from the 2015 ordinary General Meeting until the 2016 General Meeting will be presented to the General Meeting of Shareholders on 27 April 2015 for approval. The proposed level of compensation remains unchanged from the compensation paid during the previous period 2014–2015.

Compensation to the Board of Directors in 2014 (audited)
Amounts in CHF  
 
Compensation in cash
Compensation in
blocked shares3

Expenditure for
occupational provisions

 




Amount





Number



Amount (at
closing price
on allocation)
Total
compen-
sation
in cash
and shares
(amount)
4




Regular
contributions
5


Extra-
ordinary
contri-
butions



Aggregate
total
(amount)
Rolf Dörig, Chairman of the Board of Directors
  896 000 1 761 384 401 1 280 401 286 416 1 566 817
Gerold Bührer
  244 767 481 105 141 349 908
Frank Schnewlin
  244 767 481 105 141 349 908
Wolf Becke
  91 000 180 39 346 130 346
Adrienne Corboud Fumagalli 1
  68 250 134 29 512 97 762
Ueli Dietiker
  91 000 180 39 346 130 346
Damir Filipovic
  91 000 180 39 346 130 346
Frank W. Keuper
  91 000 180 39 346 130 346
Henry Peter
  112 000 221 48 308 160 308
Peter Quadri 2
  30 333 61 13 042 43 375
Franziska Tschudi Sauber
  91 467 181 39 560 131 027
Klaus Tschütscher
  91 000 180 39 346 130 346
Total Board of Directors
  2 142 584 4 220 921 835 3 064 419 286 416 3 350 835
1 Joined 23.04.2014.
2 Left 23.04.2014.
3 The allocation of shares was effected on 17.06.2014 and 15.12.2014 at the stock exchange closing price of CHF 213.80 and CHF 223.60 respectively. Taking into account the blocking period of three years, the economic value, which is equal to the tax value, is CHF 179.5108 and CHF 187.7390 respectively.
4 All contributions are gross contributions, i.e. they include employee contributions to AHV/IV/ALV. Employer contributions to AHV/IV/ALV/FAK amounted to a total of
CHF 191 671 in the year under review.
5 Pursuant to the pension fund regulations, occupational provisions were financed by the employer and the employee at a ratio of 70% to 30%.


Compensation to the Board of Directors in 2013 (audited)
Amounts in CHF  
 
Compensation in cash
Compensation in
blocked shares3

Expenditure for
occupational provisions

 




Amount





Number



Amount (at
closing price
on allocation)
Total
compen-
sation
in cash
and shares
(amount)
4




Regular
contributions
5


Extra-
ordinary
contri-
butions



Aggregate
total
(amount)
6
Rolf Dörig, Chairman of the Board of Directors
  1 008 000 2 618 432 060 1 440 060 286 416 1 726 4766
Gerold Bührer
  244 300 636 104 965 349 265
Frank Schnewlin
  244 300 636 104 965 349 265
Wolf Becke
  91 000 237 39 113 130 113
Volker Bremkamp 1
  43 167 120 18 624 61 791
Ueli Dietiker 2
  68 250 174 29 336 97 586
Damir Filipovic
  91 000 237 39 113 130 113
Frank W. Keuper 2
  68 250 174 29 336 97 586
Henry Peter
  106 750 278 46 023 152 773
Peter Quadri
  91 000 237 39 113 130 113
Franziska Tschudi Sauber
  97 067 254 41 794 138 861
Klaus Tschütscher 2
  68 250 174 29 336 97 586
Total Board of Directors
  2 221 334 5 775 953 778 3 175 112 286 416 3 461 528
1 Left 23.04.2013.
2 Joined 23.04.2013.
3 The allocation of shares was effected on 14.06.2013 and 13.12.2013 at the stock exchange closing price of CHF 155.20 and CHF 176.20 respectively. Taking into account the blocking period of three years, the economic value, which is equal to the tax value, is CHF 130 309 and CHF 147 941 respectively. When allocating the blocked shares (30% of fixed compensation), the calculated units are rounded up to the next whole number.
4 All contributions are gross contributions, i.e. they include employee contributions to AHV/IV/ALV. Employer contributions to AHV/IV/ALV/FAK amounted to a total of
CHF 190 715 in the year under review.
5 Pursuant to the pension fund regulations, occupational provisions were financed by the employer and the employee at a ratio of 70% to 30%.
6 For the period from the 2014 Annual General Meeting to the 2015 Annual General Meeting, compensation for members of the Board of Directors will remain unchanged. For the Chairman of the Board of Directors, the fixed compensation in cash and in blocked shares will be reduced by CHF 240 000 to CHF 1 200 000. Accordingly compensation for the Chairman for the period AGM 2014 - AGM 2015 is reported as follows in the compensation table:
Rolf Dörig, Chairman of the Board of Directors
  840 000 360 000 1 200 000 286 416 1 486 416


Compensation to members of the Corporate Executive Board
Compensation remitted to members of the Corporate Executive Board comprises the fixed basic salary, short-term variable compensation in cash and other compensation (child allowances, company cars, premium contributions to 3rd pillar pension plans). The short-term variable compensation in cash is allocated as a bonus and as deferred compensation in cash. The deferred compensation in cash is paid out after a period of three years has elapsed and provided that the regulatory requirements have been satisfied. In addition, a long-term variable compensation component is in place in the form of an equity compensation plan linked to the performance of the Swiss Life Holding share price, respectively to medium-term planning and corresponding target achievement (RSU plan). As already mentioned, participants are entitled to Swiss Life Holding shares after a period of three years has elapsed and provided that the relevant requirements are satisfied at the time of allocation.

Salary is determined annually by the Board of Directors, on the basis of a proposal by the Compensation Committee, taking into account the individual member’s function-related responsibility and the current market conditions.

The variable compensation components are determined by the Board of Directors in accordance with the compensation policy and based on the company result and the achievement of personal goals assessed in the employee appraisal procedure implemented throughout the Group (Group Performance System, GPS).

The amount of the variable compensation (short-term variable compensation in cash and equity compensation plan as a long-term variable compensation component) is limited in the Articles of Association of Swiss Life Holding to a maximum of 181% of the fixed basic salary (“bonus cap”, upper limit for the variable compensation).

Chart



For the short-term variable compensation in cash (cash bonus and, if applicable, deferred compensation in cash), the amended compensation policy at Corporate Executive Board level (in relation to the ratio between fixed and variable compensation) provides for variable compensation in cash of 50% of the fixed basic salary in the case of 100% target achievement (“on-target bonus”), which can be reduced by the Board of Directors in consideration of all the circumstances.

In the same way the allocation of future subscription rights to Swiss Life Holding shares (equity compensation plan, RSU plan) is dependent on the respective target achievement. The cash bonus thereby serves as a reference, whereby the deferred compensation components (RSU plan and deferred compensation in cash) are considered as a whole and together with the cash bonus are subject to the upper limit specified in the Articles of Association.

At Corporate Executive Board level, variable compensation depends 60% directly on the company’s success. The Key Performance Indicators (KPIs) used to assess company success include, as mentioned above, key figures relating to annual profit, cost savings, the risk and fee result, new business profitability, return on equity and solvency (Swiss Solvency Test, SST).

40% of the variable compensation is based on Corporate Executive Board members’ achievement of specified personal goals. On the one hand, these personal goals are linked back to the company’s success, in that each Corporate Executive Board member has to meet personal quantitative objectives contributing to the company’s success in relation to his division. On the other hand, the personal goals cover qualitative factors, namely project targets, risk management and compliance goals, as well as requirements relating to leadership and to supporting and further developing corporate culture.

In the year under review, as in the previous year, Swiss Life grew profitably and significantly outperformed the market in the strategically important business areas. Profit from operations and net profit were further increased compared to the previous year, exceeding the targets under the medium-term planning by 11% and 18% respectively. In addition, Swiss Life had already achieved its cost savings targets of CHF 130 –160 million under the Group-wide programme “Swiss Life 2015” by the end of 2014, making overall cost savings of CHF 160 million. The targets set for the risk and fee result were also significantly exceeded; the latter increased in local currency by 15% (compared to the prior year) to CHF 1.3 billion. The Group generated adjusted return on equity of 9.6% in the year under review, putting it close to the top end of the target range of 10%. The targets relating to profitability, the value of new business, as well as the new business margin, which fell slightly due to the low interest rate environment, were also exceeded. Likewise, the solvency targets were met and the insurance reserves could again be substantially strengthened in the interest of policyholders.

The compensation for members of the Corporate Executive Board for the 2014 financial year is reported in detail in the 2014 compensation table below. Patrick Frost, Chairman of the Corporate Executive Board (Group CEO) since 1 July 2014, received the highest compensation of the members of the Corporate Executive Board in the 2014 financial year; accordingly his compensation is disclosed individually.

Bruno Pfister, Group CEO until 30 June 2014, received the contractually agreed salary in the 2014 financial year until formal termination of the employment relationship on 30 November 2014; short-term variable compensation (bonus and deferred compensation in cash) of a total of CHF 540 000 was determined for his service as Group CEO until 30 June 2014; in addition he was allocated 1415 RSUs with a fair value of CHF 203.54 under the equity compensation plan for this first half of 2014.

In the 2014 financial year, the compensation is reported, in addition to the compensation of Group CEO Patrick Frost, for seven persons who were members of the Corporate Executive Board for all or part of the year under review. For Bruno Pfister, Group CEO until 30 June 2014, and Manfred Behrens, CEO Germany until 31 March 2014, compensation is considered for both the period of their membership of the Corporate Executive Board and the period until termination of their employment relationship on 30 November 2014 and 31 December 2014 respectively. For Markus Leibundgut, who joined on 1 April 2014 and Stefan Mächler, who joined on 1 September 2014, the compensation is stated pro rata for the period of their membership of the Corporate Executive Board in 2014.

The short-term variable compensation component for the Corporate Executive Board of a total CHF 3 949 081 (cash bonus of CHF 3 368 081 and deferred compensation in cash of CHF 581 000), which was determined by the Board of Directors at the beginning of 2015 for the 2014 financial year and will be proposed to the General Meeting of Shareholders on 27 April 2015 for approval, is disclosed in the following compensation table on an accrual basis as compensation for the 2014 financial year (accrual method). The members of the Corporate Executive Board did not receive any compensation in shares for the 2014 financial year; they are participating in the current equity compensation plan that provides for the allocation of so-called Restricted Share Units (RSUs).

The long-term variable compensation component in the form of the equity compensation plan (RSU plan 2015) is also reported in the compensation table for the 2014 financial year, which serves as the basis for the amount of the allocation and the corresponding number of allocated RSUs (accrual method).

Expenditure for occupational provisions for members of the Corporate Executive Board in the period under review amounted to CHF 1 913 184. This includes the ordinary annual employer contribution of CHF 205 224 for the occupational benefits of Patrick Frost, Group CEO.

The stated amounts do not include social security contributions (AHV/IV/ALV/FAK) payable by the employer under the law. The respective expenditure is shown in footnote 6 of the 2014 compensation table.

Following the 2014 compensation table the details of the compensation for 2013 are stated in a separate table for comparison.

Compensation to the Corporate Executive Board in 2014 (audited)
Amounts in CHF  
  Compensation in cash Compensation in shares
 


Salary

Bonus for 2014
determined
in 2015
3


Other
compensation
4

Total
compensation
in cash



Number



Amount
Total
compensation
in cash and
shares (amount)
Patrick Frost, Group CEO from 01.07.2014
  1 125 000 575 000 24 742 1 724 742 0 0 1 724 742
Other members of Corporate Executive Board 1,2
  5 615 374 2 793 081 115 167 8 523 622 0 0 8 523 622
Total Corporate Executive Board
  6 740 374 3 368 081 139 909 10 248 364 0 0 10 248 364
1 Seven individuals were taken into account in the period under review. For Bruno Pfister, Group CEO until 30 June 2014, and Manfred Behrens, CEO Germany until 31 March 2014, compensation is disclosed for both the period of their membership of the Corporate Executive Board and the period until termination of their employment relationship on 30 November 2014 and 31 December 2014 respectively. For Markus Leibundgut (appointed on 1 April 2014) and Stefan Mächler (appointed on 1 September 2014), compensation is reported pro rata for the period of their membership of the Corporate Executive Board in 2014.
2 In the 2014 financial year, Bruno Pfister received the salary agreed in his contract of employment until formal termination of the employment relationship on 30 November 2014; for his service as Group CEO until 30 June 2014 a short-term variable compensation (bonus and deferred compensation in cash) of a total of CHF 540 000 was determined. In addition he received 1415 RSUs as a long-term variable compensation component (2014 RSU plan: the allocation was effected at a fair value of CHF 203.54 as calculated by an independent consultancy firm). This compensation is included in the tabular amounts for the other members of the Corporate Executive Board or the corresponding total amount.
3 The short-term variable compensation component for the 2014 financial year (bonus and deferred compensation in cash) was determined by the Board of Directors at the beginning of 2015 for the 2014 financial year.
4 Child allowances (CHF 8650), company cars (CHF 23 426), premium contributions to 3rd pillar pension plans (CHF 104 112), other (CHF 3721), each in total.


Amounts in CHF  
  Expenditure for occupational provisions
 



Regular
contributions
5




Extraordinary
contributions
Aggregate total
compensation in cash
and in shares and
occupational
provisions expense
(amount)
6
Patrick Frost, Group CEO from 01.07.2014
  205 224 0 1 929 966
Other members of Corporate Executive Board 1
  1 707 960 0 10 231 582
Total Corporate Executive Board
  1 913 184 0 12 161 548
5 Pursuant to the pension fund regulations, occupational provisions were financed by the employer and the employee at a ratio of 70% to 30%.
6 All contributions are gross contributions, i.e. they include employee contributions to AHV/IV/ALV. Employer contributions to AHV/IV/ALV/FAK amounted to a total of
CHF 959 830 in the year under review.


Amounts in CHF  
  Variable deferred
compensation in cash3
Restricted Share Units (RSUs)
RSU plan 20158,9

 




Amount
7





Number





Amount
Aggregate
total compensation
incl. deferred
compensation
in cash and RSUs
(amount)
Patrick Frost, Group CEO from 01.07.2014
  175 000 3 644 750 190 2 855 156
Other members of Corporate Executive Board 1
  406 000 9 644 1 985 409 12 911 000
Total Corporate Executive Board
  581 000 13 288 2 735 599 15 766 156
7 The variable deferred compensation in cash is paid out after a deferral period of three years, provided the requirements are satisfied at that point.
8 The RSUs represent future subscription rights that entitle the individuals concerned to receive Swiss Life Holding shares after a period of three years, provided the requirements are satisfied at that point.
9 For the 2015 RSU plan beginning 01.03.2015 the 2014 financial year forms the basis for the amount of the allocation and the corresponding number of allocated RSUs. The allocation of RSUs on 01.03.2015 was effected at a fair value of CHF 205.87, as calculated by an independent consultancy firm.


Compensation to the Corporate Executive Board in 2013 (audited)
Amounts in CHF  
  Compensation in cash Compensation in shares
 


Salary


Bonus for 2013
paid in 2014
2


Other
compensation
3

Total
compensation
in cash



Number



Amount
Total
compensation
in cash and
shares (amount)
Bruno Pfister, Group CEO
  1 500 000 1 230 000 52 120 2 782 120 0 0 2 782 120
Other members of Corporate Executive Board 1
  4 447 814 3 365 677 137 279 7 950 770 0 0 7 950 770
Total Corporate Executive Board
  5 947 814 4 595 677 189 399 10 732 890 0 0 10 732 890
1 Six individuals were taken into account in the period under review.
2 The bonus paid in 2014 relates to the 2013 financial year result.
3 Child allowances (CHF 4300), allowance for years of service (CHF 7032), company cars (CHF 68 056), premium contributions to 3rd pillar pension plans (CHF 99 092), other (CHF 10 919), each in total.


Amounts in CHF  
  Expenditure for occupational provisions
 



Regular
contributions
4




Extraordinary
contributions
Aggregate total
compensation in cash
and in shares and
occupational
provisions expense
(amount)
5
Bruno Pfister, Group CEO
  227 449 0 3 009 569
Other members of Corporate Executive Board
  1 168 476 0 9 119 246
Total Corporate Executive Board
  1 395 925 0 12 128 815
4 Pursuant to the pension fund regulations, occupational provisions were financed by the employer and the employee at a ratio of 70% to 30%.
5 All contributions are gross contributions, i.e. they include employee contributions to AHV/IV/ALV. Employer contributions to AHV/IV/ALV/FAK amounted to a total of
CHF 514 967 in the year under review.


Amounts in CHF  
  Variable deferred
compensation in cash
Restricted Share Units (RSUs)
RSU plan 20147,8

 




Amount
6





Number





Amount
Aggregate total
compensation
incl. deferred
compensation
in cash and RSUs
(amount)
Bruno Pfister, Group CEO
  370 000 4 226 860 160 4 239 729
Other members of Corporate Executive Board
  767 000 10 206 2 077 329 11 963 575
Total Corporate Executive Board
  1 137 000 14 432 2 937 489 16 203 304
6 The variable deferred compensation in cash is paid out after a deferral period of three years, provided the requirements are satisfied at that point.
7 The RSUs represent future subscription rights that entitle the individuals concerned to receive Swiss Life Holding shares after a period of three years, provided the requirements are satisfied at that point.
8 For the 2014 RSU plan beginning 01.03.2014 the 2013 financial year forms the basis for the amount of the allocation and the corresponding number of allocated RSUs. The allocation of RSUs on 01.03.2014 was effected at a fair value of CHF 203.54, as calculated by an independent consultancy firm.


Additional fees and compensation to members of governing bodies1
No additional fees and compensation were paid to members of governing bodies in the year under review.

1 audited

Compensation to former members of governing bodies1
No compensation was paid to former members of governing bodies in the year under review.

1 audited

Compensation to closely linked parties1,2
No compensation was paid to closely linked parties in the year under review.

1 audited
2 “Closely linked parties” are natural persons and legal entities (in the sense of Art. 678 of the Swiss Code of Obligations and Art. 16 of the Compensation Ordinance) that have close personal, economic, legal or de facto ties with members of governing bodies. This typically includes spouses, minor children, companies controlled by members of governing bodies, and natural or legal persons serving as members of governing bodies in a fiduciary capacity.

Loans and credits to members of governing bodies1
In accordance with the Articles of Association as amended on 23 April 2014, the Company may grant members of the Board of Directors and the Corporate Executive Board secured loans and credits at usual market terms for up to CHF 10 million each and unsecured loans and credit of up to CHF 0.5 million each.

No loans or credit were granted to members of governing bodies in the year under review; as at the balance sheet date, there are no outstanding loans or credit to members of governing bodies.

1 audited

Loans and credits to former members of governing bodies1
No loans or credit were granted to former members of governing bodies in the year under review; as at the balance sheet date, there are no outstanding loans or credit to former members of governing bodies.

1 audited

Loans and credits to closely linked parties1,2
No loans or credit were granted to closely linked parties in the year under review; as at the balance sheet date, there are no outstanding loans or credit to closely linked parties.

1 audited
2 “Closely linked parties” are natural persons and legal entities (in the sense of Art. 678 of the Swiss Code of Obligations and Art. 16 of the Compensation Ordinance) that have close personal, economic, legal or de facto ties with members of governing bodies. This typically includes spouses, minor children, companies controlled by members of governing bodies, and natural or legal persons serving as members of governing bodies in a fiduciary capacity.

Share ownership/Participation rights
On the balance sheet date of 31 December 2014, acting members of the Board of Directors and the Corporate Executive Board (including closely linked parties) held the following number of Swiss Life Holding registered shares and future subscription rights to Swiss Life Holding shares in the form of Restricted Share Units (RSUs):

Board of Directors
SLH shares
31.12.2014
Rolf Dörig, Chairman of the Board of Directors
37 308
Gerold Bührer
6 289
Frank Schnewlin
3 942
Wolf Becke
654
Adrienne Corboud Fumagalli
134
Ueli Dietiker
354
Damir Filipovic
1 117
Frank W. Keuper
354
Henry Peter
7 052
Franziska Tschudi Sauber
2 571
Klaus Tschütscher
354
Total Board of Directors
60 129


Corporate Executive Board
 
  Restricted
Share Units
(RSUs)


SLH shares
  31.12.20141 31.12.2014
Patrick Frost, Group CEO
  9 704 10 000
Thomas Buess
  8 869 10 874
Ivo Furrer
  8 869 1 300
Markus Leibundgut
  5 044 500
Stefan Mächler
  0 500
Charles Relecom
  7 201 1 410
Total Corporate Executive Board
  39 687 24 584
1 Total number of RSUs allocated in the years 2012, 2013 and 2014 in connection with the relevant equity compensation plan. The RSUs represent future subscription rights that entitle the individuals concerned to receive SLH shares after a period of three years, provided that the relevant conditions are met at that point.


Shareholdings as well as future subscription rights to Swiss Life Holding shares as at 31 December 2013 are shown in the Notes to the Swiss Life Holding Financial Statements on page 267.

Options
No share options have been granted in the Swiss Life Group since 2003 and no options are outstanding.

Further information
In the form of an overview, the following additional information is provided on the Swiss Life Group compensation systems for the 2014 financial year:

In CHF (unless otherwise indicated)
Total compensation 1
761 327 012
of which total variable compensation (total pool) 2
125 809 020
Number of persons who received variable compensation
5 761
Total outstanding deferred compensation
10 767 491
of which cash payment
581 000
of which shares
0
of which options
0
of which others (Restricted Share Units, RSU)
10 186 491
Charges and credits in the financial year from compensation for previous financial years 3
–278 578
Board of Directors, Executive Board and persons whose activities have a significant influence on the risk profile:
Total sign-on payments made in the financial year 4
0
Total severance payments made in the financial year 5
0
1 The totality of any monetary value which the company distributes to a person directly or indirectly for the work performed for the company, e.g. in the form of cash payments, non-cash benefits, expenditure which establishes or increases entitlements to occupational provisions, pensions, shares or other allocation of shareholding rights as well as the forgiving, extinguishing or renunciation of any claims or debts.
2 Part of the total compensation, the granting or the amount of which is at the discretion of the company or which is contingent on fulfilment of predefined conditions. This includes compensation contingent on performance or meeting certain targets. Sign-on payments and severance payments also fall within the scope of the definition of variable compensation.
3 In particular reduction in expenses affecting net income due to only partial consumption of reserves for variable compensation in Germany.
4 Compensation which is agreed on the conclusion of an employment agreement to be paid or be due once. Also deemed to constitute a sign-on payment shall be compensation for benefits foregone vis-à-vis a previous employer.
5 Compensation which is agreed in connection with the termination of an employment relationship.


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