Corporate Governance - Orell Füssli Holding AG

corporate governance
5. compensation of members of the board of directors
and the executive board
Basic principles
Compensation of the Board of Directors and the Executive Board consists of a fixed and a variable component.
External experts are consulted on the specification of the remuneration system only in the
event of a fundamental restructuring. Functionally specific benchmarks are applied to the determination
of remuneration in the case of new appointments or promotions at group level.
The Orell Füssli Group has neither a share nor an option allocation scheme for members of the Board
of Directors and the Executive Board. There is therefore no direct connection between shares in Orell
Füssli Holding Ltd held by members of the Executive Board and the Board of Directors and the functions
of these officers; they have been acquired privately in open trading on the stock market.
With the exception of contributions to the pension fund, the upper limit of which (CHF 835,200)
is defined by occupational pensions’ legislation, the Orell Füssli Group does not provide any specific
retirement pension schemes for members of the Board of Directors and the Executive Board.
No contractually agreed severance payments (“golden parachutes”) have been stipulated in advance
for the members of the Board of Directors and the Executive Board. The members of the Executive
Board are not employed under long-term contracts (no longer than 6 months).
Compensation
The fixed directors’ fees are periodically reviewed by the Board of Directors at its own discretion and
adjusted if appropriate. The variable compensation component for the Board of Directors depends both
on the number of meetings held by the committees (attendance fee) and on the dividend paid
(CHF5,000 per Swiss franc of dividend paid).
The fixed remuneration component for the Executive Board as proposed by the CEO is stipulated
annually with final authority at the start of the new financial year by the Compensation Committee of
the Board of Directors. The amount of fixed remuneration is defined by function, duties, qualifications,
experience and the market environment. The variable compensation component for the Executive
Board is based on bonus regulations adopted by the Board of Directors. The maximum possible amount
of variable remuneration (if all targets are achieved) is stipulated individually and amounts to
20–60percent of basic salary. It is calculated on the basis of a preset formula which takes into account
EBIT and the achievement of individually specified annual targets, whereby the weighting of EBIT and
individually specified targets is stipulated individually for each member of the Executive Board. The
members of the Executive Board performing exclusively group-related functions (CEO, CFO, Head of
HR) are assessed in terms of group profit with regard to EBIT, other members of the Executive Board
mainly with regard to the profits of the division headed by them. The individually specified three to five
annual targets comprise quantitative and qualitative components and must be specific, measurable,
challenging, relevant and have time limits. They can, for example, relate to the implementation of a
project, compliance with a project budget or professional further development. The Chairman of the
Board of Directors is responsible for specifying individual targets for the CEO. The CEO specifies the
individual targets of the other members of the Executive Board.
The fixed remuneration component of the Executive Board and the Chairman of the Board of Directors
includes a lump sum for expenses and individually agreed additional benefits such as providing a
free company car or assuming the cost of a rail season ticket.
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