ANNUAL REPORT 2009 - GAM Holding AG

from the Group Head of Human Resources, who regularly participates at the Committee meetings. External consultants are regularly engaged to
further support the Committee’s efforts.
The Compensation Committee reviews the Group Compensation Policy together with any other or local compensation and benefits policies,
including retirement benefits, and compensation governance for the Board of Directors and members of the Executive Board, including the Chief
Executive Officer. It also reviews and approves any compensation plan offered to the Group as a whole and any compensation plan within the
Group which is linked to shares or options over shares in GAM Holding Ltd.
The Compensation Committee ensures the operational implementation of applicable compensation policies and rules including the Group
Compensation Policy. Group Human Resources regularly reports to the Compensation Committee and assists in the ongoing development of the
Group Compensation Policy.
The Compensation Committee annually assesses the performance of the Chairman, the members of the Board of Directors and the Chief
Executive Officer of the Company against previously agreed goals and objectives. The Chief Executive Officer evaluates the performance of the
other members of the Executive Board on an ongoing basis and reports to the Compensation Committee on this topic.
The Compensation Committee approves the overall amount paid by the Group by way of variable compensation. It determines the total
compensation of the Chairman of the Board of Directors as well as of the members of the Executive Board of GAM Holding Ltd. including the
Chief Executive Officer. It also prepares and provides to the Board of Directors all compensation proposals relating to independent members of
the Board of Directors. The Board of Directors approves the compensation of individual members of the Board of Directors.
The Compensation Committee approves the aggregate, variable compensation expenditure of the Group and reviews individual compensation
payments to be made to senior executives within the Group. It also reviews and approves non-standard contracts of employment and termination
agreements for the members of the Board of Directors, the Executive Board and other senior executives within the Group.
The Compensation Committee reports back to the Board of Directors regularly on the status of its activities, the development of the
compensation levels as well as on the operational implementation of the Compensation Policy.
Individuals whose compensation is being determined or approved at a particular meeting of the Compensation Committee will not participate in
those discussions.
5.3 COMPENSATION COMPONENTS
5.3.1 Base Salary
This is the fixed, base element of the remuneration that gives current employees the guarantee of a regular income so that they can plan their
financial affairs. The aim is to pay a market rate comparable to similar roles within the financial services industry. The base salary reflects the
level of the employees’ function and experience. Where appropriate, external benchmarking is used to ensure that base salaries are in line with
the market.
5.3.2. Discretionary Bonus
The purpose of the discretionary bonus is to annually reward and incentivise excellent performance and to align the success of the Company
with that of the employee. Discretionary bonuses are intended to reflect contribution to the overall success of the Company and are designed to
take a long term view of the Company’s development. Bonus payments made to risk and control functions are not directly linked to the
profitability of the business areas which they support so as to maximise the independence of such functions.
All employees, except those who participate in a formula driven incentive, are eligible to receive a discretionary bonus.
20 GAM Holding Ltd. Annual Report 2009