Remuneration report 2011. - Nobel Biocare Corporate

80 Nobel Biocare Annual Report 2011 — Remuneration report
Remuneration report 2011.
This remuneration report provides an
overview of Nobel Biocare’s compensation
principles. It includes compensation
disclosures of the Executive Committee and
Board of Directors which are also part of the
consolidated financial statements (note 18)
and the parent company accounts (note 12).
Compensation and benefits philosophy
Nobel Biocare’s remuneration principles are designed to
attract, motivate and retain internationally oriented, successful
employees. The aim is to provide appropriate reward in a
competitive employment market and to support the development
of a high performance environment. The elements of
the remuneration system are:
–Base salary
–Short-term incentive
–Long-term incentive
–Benefits
The ultimate goal of effective remuneration is to strengthen
Nobel Biocare’s global industry position for the benefit of its
customers and their patients while delivering the expected
returns to its shareholders.
To ensure long-term effectiveness, Nobel Biocare’s remuneration
system is designed to:
–Pay for performance and reward exceptional results.
–Provide short-term and long-term incentives to attract highcaliber
talent and retain key employees and senior managers,
and to
–be globally applicable within a corporate framework.
Base salary
The base salary is the amount of annual fixed pay as agreed
upon in the employment contract and/or the annual compensation
letter.
The base salary for an individual role is influenced by internal
and external equivalence and considers aspects of the role,
individual experience as well as the market. The base salary
is defined by the competencies required by the role, by the
corresponding responsibilities and by the internal pay
structure. A base salary at median is considered competitive
for a jobholder fully complying with all the requirements of
the role. The individual base salary position is strongly linked
to the emerging experience of a jobholder. Merit increases
reflect emerging experience in the role, salary history, internal
equivalence as well as market salary trends and inflation.
To ensure the compensation competitiveness, Nobel Biocare
annually obtains information from external salary surveys within
the relevant comparator groups. That information is also
considered in the determination of the base salary. Base salaries
are benchmarked on a yearly basis against similar positions
in other multinational companies which are comparable
in scope, geography and business complexity, i.e. comparable
with companies with which Nobel Biocare competes daily
for business and talent. Nobel Biocare takes into account
salary survey data provided by external global service providers
as well as selected local providers. Our main HR service
providers are Mercer, Towers Watson and AON Hewitt. None
of these providers has further non-HR related mandates with
Nobel Biocare.
Short-term incentive
The short-term incentive scheme of Nobel Biocare is contingent
upon the financial success of the Group, is aligned with
the business strategy and supports a high-performance environment.
The short-term incentive plan is competitive in the
markets in which Nobel Biocare operates. The short-term
incentive scheme is reviewed annually.
Short-term variable compensation is designed to provide
Nobel Biocare employees with the opportunity to participate
in the overall success of the Group based on their personal
contribution and measured against financial key performance
indicators (KPIs) as well as against personal objectives.
A short-term incentive plan has been in place since 2003, and
is applied consistently within the organization according to
position levels. Financial KPIs are set at Group, regional, subregional
and local levels. Employee performance is reviewed
and assessed annually according to goal achievement. The
Group’s financial KPIs for 2011 are net sales and earnings
before interest and taxes (EBIT) growth. Additional KPIs have
been set at regional, sub-regional, and local levels, aligned
with the business strategy. For reasons of competitiveness in
the marketplace Nobel Biocare will not disclose the KPIs in
more detail.
Nobel Biocare’s profitability is measured on the basis of the
EBIT margin. The higher the absolute net sales, the higher the

Remuneration report
81
EBIT margin target. This mechanism considers the high operating
leverage of Nobel Biocare.
For eligible employees not belonging to the Executive Committee
(EC) and not belonging to internal audit, the Group’s
financial KPIs account for at least 10 percent of the short-term
variable compensation. Depending on the role, Group, regional,
sub-regional, local and functional KPIs account for 10 to
90 percent of the short-term variable compensation. Individual
KPIs, including core competencies and leadership principles,
account for the remaining 90 to 10 percent.
In 2010, the financial KPIs for EC members accounted for 30
percent and the individual KPIs for 70 percent. This split has
been newly defined for 2011: for EC members, financial KPIs
account for 70 percent of the short-term variable compensation
(50 percent Group KPIs, 20 percent regional or functional
KPIs); individual KPIs account for the remaining 30 percent.
Short-term incentive targets have to meet a threshold to generate
a pay-out and can be overachieved up to a maximum of
120 percent for all eligible employees not belonging to the
EC. For EC members the cap is set at 200 percent.
For eligible employees not belonging to the EC the target
short-term variable compensation lies between 8 and 50 percent
of base salary, depending on functional level, and is paid
in cash. The target short-term variable compensation for EC
members lies between 33 and 100 percent, the latter of which
applies to the Chief Executive Officer (CEO). Apart from those
selected Group, regional, sub-regional and local roles eligible
for short-term incentives, sales representatives receive quarterly
incentives based on their sales performance in the given
quarter. These incentive compensation plans are region-specific.
In addition, for selected functions, team objectives are
defined and rewarded.
Long-term incentive
Nobel Biocare currently offers two long-term incentive
awards to compensate outstanding contributions of key
employees, directly supporting the achievement of corporate
goals. These incentives are positioned to:
–encourage senior managers to focus on the performance
and long-term growth of the Group;
–align the interests of senior managers with those of Nobel
Biocare shareholders;
–allow senior managers to share in the long-term success
of Nobel Biocare; and to
–foster and support a high performance culture and focus
on sustainable value creation for patients, customers and
shareholders.
The aim of long-term remuneration is to reward senior managers
and executives by linking compensation with Group and
country-specific performance targets over a three-year
period; hence reflecting Nobel Biocare’s commitment to sustainable
growth. Nominated employees can only participate
in one long-term incentive plan.
The Group currently has two long-term, performance-based
plans in place that have been approved by the Nomination
and Compensation Committee of the Board of Directors
(NCC): a Performance Share Unit Plan (PSUP) and a Performance
Cash Bonus Plan (PCBP) which is being discontinued.
a) Performance Share Unit Plan (PSUP)
This long-term incentive plan covers, with a single global program,
key position holders within the Group as well as
selected employees throughout the organization as identified
by the CEO and endorsed by the NCC. Participants are granted
performance-based share units; all grants have to be
approved by the NCC. Vesting of these grants is subject to
specific performance achievements over the vesting period.
The performance achievements are subject to conditions defined
by the NCC.
For nominated employees not belonging to the EC, the initial
value of the grants is between 10 and 40 percent of the base
salary and is allocated to long-term compensation within the
long-term incentive plan. For EC members, the initial value of
the grants is between 70 and 100 percent, the latter of which
applies to the CEO only. The reference price of the grants is
linked to the average share price during the five days following
the release of the respective full year results (2011: CHF 18.42;
2010: CHF 28.00).
In the case of a change of control, all restricted share units of
the participant shall immediately vest. The PSUP Plan is reviewed
annually.
Terms of awards grant 2010 and 2011
Vesting is subject to a service period and the outperformance
of the Nobel Biocare (NOBN) share price relative to the Swiss
Leader Index (SLI) for the vesting period. If this relative outperformance
is achieved, each share unit will be converted
into a predetermined amount of Nobel Biocare shares at vesting
date. Should NOBN share price underperform the SLI at

82 Nobel Biocare Annual Report 2011 — Remuneration report
the end of each vesting period, no NOBN shares will be allocated
at conversion date. Should the NOBN share outperform
the SLI by 20 percent or more at the end of each vesting
period, each share unit may receive 2 NOBN shares at conversion
date. Between 0 percent relative performance and 20
percent outperformance, the number of NOBN shares allocated
at vesting date will be between 1 and 2 and is calculated
as a linear function of the NOBN outperformance against the
SLI. One third (tranche 1) of the allocated share units vest
after one year (28 February), one third (tranche 2) after two
years (28 February) and the remaining third (tranche 3) after
three years (28 February).
Tranche 1 of the PSUP 2010 was forfeited on 28 February
2011.
Terms of awards grant 2009
Vesting is subject to a three-year service period lasting until
30 April 2012 and to the outperformance of the Nobel Biocare
(NOBN) share price relative to the Swiss Market Index (SMI)
for the period. If this relative outperformance is achieved,
each share unit will be converted into a predetermined
amount of Nobel Biocare shares at the vesting date. Should
the NOBN share outperform the SMI by 40 percent or above
at the end of the defined 3-year period, each share unit reflects
the right to receive 2 NOBN shares at vesting date. Between
0 percent relative performance and 40 percent outperformance,
the number of NOBN shares allocated at vesting date
is calculated as a linear function of the NOBN outperformance
against SMI.
b) Performance Cash Bonus Plan (PCBP) – until 31
December 2011
This long-term incentive plan covered key position holders
within country organizations. The plan was approved by the
CEO and endorsed by the NCC.
Participants in the Performance Cash Bonus Plan are entitled
to be rewarded on the basis of specific performance achievements
over a three-year period. Performance will be measured
for the period from 2011 to 2013 by a combination of
Group and country-specific KPIs.
For 2011, the financial Group KPIs were net sales and EBIT
growth; two additional financial KPIs for 2011 per country
were determined by the Senior Vice President or President
and General Manager in charge of the respective region to
which the country organization belongs.
The value was between 10 and 20 percent of base salary and
was fully paid in cash in local currency. The NCC has decided
to discontinue the PCBP as per 2012.
Employee benefits
Employee benefits are country-specific and are structured in
accordance with local practice, local legal requirements and
competitive benchmarking. Nobel Biocare regularly reviews
its benefit coverage worldwide and assesses its programs in
this area with the support of selected vendors.
Responsibilities and methods of determining
remuneration and compensation plans
The Board of Directors decides on the Board members’ remuneration
policies, as well as on the individual compensation
plans based on the NCC’s proposals. The Vice Chairman proposes
the remuneration of the Chairman of the Board. When
the remuneration of individual members of the Board is under
discussion, the affected member abstains from voting.
In addition to proposing remuneration plans and policies, the
NCC endorses the base salary and performance goals of the
CEO as proposed by the Chairman. The CEO proposes the
base salaries and performance goals of EC members for
approval by the NCC. The NCC regularly informs the full Board
of Directors on the status of compensation.
Compensation of Executive Committee (EC) members
EC members take part in the PSUP. The fair value per unit was
measured based on a Monte Carlo simulation. Market conditions
are taken into account when estimating the fair value of
the instruments granted. Service conditions are not taken into
account for the grant date fair value calculation. Additional
information regarding the measurement of performance
share unit grants is disclosed in note 18 of the consolidated
financial statements.
Except for two EC members, one being seconded from the
USA to Switzerland on a home-based approach and one
under management service contract, EC members, including
the CEO, are covered by the pension scheme applicable to all
employees with a Swiss employment contract.
Contract details and clauses on changes of control
The CEO contract contains a six-month notice period. The
period of notice for all other EC members is up to six months,
except one with a 12 month notice period. EC members who
left Nobel Biocare in 2011 were released from some of their
duties during the termination period. They retained the right

Remuneration report 83
to receive salary and variable compensation for the duration
of the termination period. During 2011 a non-compete payment
for the former CEO Domenico Scala was settled. Additional
information is disclosed below in the table “Remuneration
of the Executive Committee members”.
As of 31 December 2011, no changes of control clauses existed
within the employment contracts except the clause mentioned
under the PSUP.
Compensation of the Board of Directors
The Board compensation has been benchmarked against a
carefully selected group of peer companies, based on data
published by Ethos. Based on the benchmark comparison the
total compensation of the Board of Directors has been adjusted
to bring it closer to market practice.
The 2011 total compensation of the Board of Directors is divided
into cash and restricted shares. The cash portion becomes
payable in equal installments April and October each
year, applied pro rata temporis for each member of the Board,
if appropriate. In 2011, an additional reimbursement between
EUR 12’996 and EUR 16’244 is due to Board members who
participate in a committee, and an additional EUR 28’428 is
granted for the Audit Committee Chair.
The Board of Directors’ fees are not pensionable.
Members of the Board participate in a specific Board of
Directors share plan. Shares were granted on 30 June 2011,
and are blocked until 30 June 2016. For the related fair value
calculation, please see note 18 of the consolidated financial
statements.
Each Board member received the equivalent of EUR 64’978
in shares, i.e. 4’562 shares (converted into shares using the
five-day average closing share price from 6 June 2011 to 10
June 2011. The former Chairman of the Board, who left Nobel
Biocare’s Board on 3 July 2011, received the equivalent of
EUR 203’055 in shares, i.e.14’255 shares. Rolf Watter was
appointed as the Chairman of the Board ad interim. In this
function he received an additional allocation of EUR 103’558
in shares, i.e. 7’270 shares.
As publicly announced on 4 July 2011, Michel Orsinger will
be proposed as Chairman of the Board at the Annual General
Shareholders’ Meeting 2012. Therefore, he attended Board
meetings as a guest. For services to and attendance of Board
meetings, he received 3’421 shares and a cash payment in
the amount of EUR 21’321. The restricted shares are blocked
until 30 June 2016.
Members of the Executive Committee as of 31 December 2011 1
Name Position Appointed
Richard Laube 2 Chief Executive Officer 2011
Dirk W. Kirsten Chief Financial Officer 2008
Hans Geiselhöringer 3 Executive Vice President Global Research, Products and Development 2010
Rolf Melker Nilsson 4 Senior Vice President Global Sales and Customer Development 2011
Petra Rumpf Senior Vice President Business Development and Strategic Planning 2007
Jörg von Manger-Koenig Senior Vice President Legal & Compliance 2011
Nicolas Weidmann Senior Vice President Global Communications 2007
Ernst Zaengerle Executive Vice President Global Operations 2009
1 Domenico Scala was Chief Executive Officer until 31 March 2011 and advisory until 31 October 2011. Alexander Ochsner (Senior Vive President and Manager Europe, Middle
East and Africa), Hans Schmotzer (Executive Vice President Research and Development) and Michael Glenn Thompson (Senior Vice President and General Manager
Asia/Pacific) were members of the Executive Committee until 30 November 2011.
2 CEO as of 1 April 2011.
3 Executive Vice President Marketing and Products until 30 September 2011; Executive Vice President Global Research, Products and Development from 30 November 2011.
Hans Geiselhöringer has been under management service contract since 10 February 2010.
4 President & General Manager North America until 11 August 2011; seconded to Switzerland as of 12 August 2011.

84
Nobel Biocare Annual Report 2011 — Remuneration report
Remuneration of the Executive Committee members for the years ended 31 December
in EUR ‘000 Richard Laube, CEO Other Executive Domenico Scala 1 Total
Committee members
2011 2010 2011 2010 2011 2010 2011 2010
Fixed compensation 540 – 3’649 3’203 545 579 4’734 3’782
Variable compensation 2 146 – 563 816 542 278 1’251 1’094
Fair value of performance share units 3 482 – 2’343 1’441 – 474 2’825 1’915
Pension expense and social security costs 58 – 267 554 155 159 480 713
Other benefits 4 13 – 203 267 – 29 216 296
Costs related to International assignment – – 413 5 – – – 413 –
Non-compete settlement – – – – 1’300 – 1’300 –
Fair value of options – – – – – – – –
Total 1’239 – 7’438 6’281 2’542 1’519 11’219 7’800
1 Highest total compensation.
2 Variable compensation is on an accrual basis.
3 Based on the income statement charge 2011 for the PSUP 2009, 2010 and 2011.
4 Other benefits for the year 2011 refer to expense allowances; for the year 2010 it includes car allowances and tax equalization payments.
5 Includes costs of relocation, housing and international school fees as well as tax allowances.
In 2011, the Group changed the split between financial and
individual KPIs within the short-term incentive scheme for EC
members. The financial KPIs now account for 70 percent of
the short-term variable compensation (50 percent Group
KPIs, 20 percent regional or functional KPIs). This impacts the
variable compensation 2011 in comparison with 2010. In
addition, the new composition of the EC has an impact on
the pension expenses and social security costs, as those
schemes are not comparable in costs between the different
countries of employment.
Number of performance share units, shares and stock options held as of 31 December 2011
Number 1 Number 2 Per- Per- Per- Per- Per- Per- Per- Per- Stock
of shares of per- formance formance formance formance formance formance formance formance option
held formance share units share units share units share units share units share units share units share units grant 2007
share units grant granted grant granted grant granted grant granted
held 2011 2011 2010 2010 2009 2009 2008 2008
forfeited forfeited forfeited forfeited
Richard Laube 110’000 32’573 32’573 – – – – – – – –
Dirk W. Kirsten 2’600 45’254 18’925 – 11’700 3’900 18’529 – 5’138 5’138 –
Hans Geiselhöringer 3 – 28’502 28’502 – – – – – – – –
Rolf Melker Nilsson – 12’512 10’608 – 2’856 952 – – – – –
Petra Rumpf 7’900 48’544 19’571 – 12’875 4’292 20’390 – 6’031 6’031 35’000
Jörg von Manger-Koenig – 26’001 13’377 – 5’610 1’870 8’884 – – – 10’000
Nicolas Weidmann – 31’205 12’921 – 8’125 2’709 12’868 – 4’757 4’757 25’000
Ernst Zaengerle 4’200 23’234 16’151 – 10’625 3’542 – – – – –
Alexander Ochsner 4 500 34’920 14’091 – 9’270 3’090 14’649 – 2’257 2’257 –
Michael G. Thompson 4 – 11’325 11’325 – – – – – – – –
Domenico Scala 5 29’280 55’812 – – 28’571 9’524 36’765 – 13’593 13’593 10’000
Hans Schmotzer 4 – 31’343 12’636 – 8’313 2’771 13’165 – 2’637 2’637 –
1 Includes shares acquired in the market.
2 Excluding performance share units which forfeited.
3 Under management service contract.
4 As of 30 November 2011.
5 As of 31 March 2011.

Remuneration report 85
Number of performance share units, shares and stock options held as of 31 December 2010
Number of 1 Number of 2 Performance Performance Performance Stock option
shares held performance share units share units share units grant 2007
share units held grant 2010 grant 2009 grant 2008
Dirk Kirsten 3 1’600 35’367 11’700 18’529 5’138 –
Hans Geiselhöringer 4 – – – – – –
Petra Rumpf 5 7’900 39’296 12’875 20’390 6’031 35’000
Nicolas Weidmann – 25’750 8’125 12’868 4’757 25’000
Ernst Zaengerle 4’200 7 10’625 10’625 – – –
Alexander Ochsner 500 26’176 9’270 14’649 2’257 –
Thomas M. Olsen 39’890 23’431 7’252 12’192 3’987 75’000
Robert Gottlander 6 47’160 32’168 10’150 16’075 5’943 75’000
Bill Ryan – 12’816 7’615 5’201 – –
Domenico Scala 29’280 78’929 28’571 36’765 13’593 10’000
Hans Schmotzer – 24’115 8’313 13’165 2’637 –
Total 130’530 308’673 114’496 149’834 44’343 220’000
1 Includes shares acquired in the market.
2 Includes performance share units received in 2010, 2009 and 2008.
3 Amounts do not include EUR 33 k in Nobel Biocare convertible bonds acquired in the market.
4 Under management service contract.
5 Amounts do not include EUR 331 k in Nobel Biocare convertible bonds acquired in the market.
6 Robert Gottlander was a member of the Executive Committee until 25 October 2010.
7 Including 1,000 restricted shares.
Members of the Board (all non-executive) elected by the Annual General Meeting on 30 March 2011
Name Nationality Position First elected Elected until
Rolf Watter 2 Swiss Chairman a.i. 2007 2012
Raymund Breu Swiss Vice Chairman a.i. 2010 2012
Daniela Bosshardt-Hengartner Swiss Member 2010 2012
Stig G. Eriksson Finnish Member 2006 2012
Edgar Fluri Swiss Member 2008 2012
Robert Lilja Swedish Member 2005 2012
Oern Stuge Norwegian Member 2010 2012
Heino von Prondzynski 1 German Chairman 2010 2012
1 Chairman until 3 July 2011.
2 Chairman ad interim since 3 July 2011.

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Nobel Biocare Annual Report 2011 — Remuneration report
Remuneration of the Board of Directors for the years ended 31 December 1
in EUR ‘000 2011 2010
Cash 1 Fair value of 2 Total Cash 1 Fair value of Total
restricted
restricted
shares
shares
Rolf Watter 3 146 157 303 60 26 86
Raymund Breu 89 60 149 45 26 71
Daniela Bosshardt-Hengartner 88 60 148 45 26 71
Stig G. Eriksson 77 60 137 60 26 86
Edgar Fluri 93 60 153 70 26 96
Robert Lilja 80 60 140 60 26 86
Oern Stuge 77 60 137 45 26 71
Heino von Prondzynski 4 158 188 346 64 39 103
Rolf Soiron 5 – – – 18 – 18
Antoine Firmenich 6 32 – 32 60 26 86
Jane Royston 5 – – – 15 – 15
1 Cash compensation is on an accrual basis, including social security contributions.
2 Based on the income statement charge 2011 as disclosed in note 18 of the consolidated financial statements.
3 Chairman ad interim since 3 July 2011.
4 Chairman until 3 July 2011.
5 Compensation based on period of service ending 25 March 2010.
6 Compensation based on period of service ending 31 March 2011.
Based on the benchmark comparison the total compensation
of the Board of Directors has been adjusted to bring it closer
to market practice.
Number of shares held as of 31 December 2011
Name Number of 1 Number of Restricted shares Restricted shares
unrestricted restricted grant 2011 grant 2010
shares held shares held
Rolf Watter 2 53’500 13’832 11’832 2’000
Raymund Breu 70’000 6’562 4’562 2’000
Daniela Bosshardt-Hengartner – 6’562 4’562 2’000
Stig G. Eriksson 4’250 6’562 4’562 2’000
Edgar Fluri 16’500 6’562 4’562 2’000
Robert Lilja 18’375 6’562 4’562 2’000
Oern Stuge – 6’562 4’562 2’000
Antoine Firmenich 1’000 3’000 3 – 2’000
Heino von Prondzynski 4 37’800 17’255 14’255 3’000
1 Includes shares acquired in the market.
2 Chairman ad interim since 3 July 2011.
3 Number of restricted shares held as of 31 March 2011 (including grants 2010 and 2009).
4 Chairman until 3 July 2011; numbers as of 3 July 2011.

Remuneration report 87
Number of shares held as of 31 December 2010
Name Number of 1 Number of Restricted shares Restricted shares
unrestricted restricted grant 2010 grant 2009
shares held shares held
Rolf Watter 26’200 3’000 2’000 1’000
Raymund Breu 2 20’000 2’000 2’000 –
Daniela Bosshardt-Hengartner 2 – 2’000 2’000 –
Stig G. Eriksson 3’250 3’000 2’000 1’000
Edgar Fluri 8’500 3’000 2’000 1’000
Robert Lilja 17’375 3’000 2’000 1’000
Oern Stuge 2 – 2’000 2’000 –
Heino von Prondzynski 2 26’800 3’000 3’000 –
Rolf Soiron 3 434’185 4 3’000 5 – 1’500
Antoine Firmenich 1’000 3’000 2’000 1’000
Jane Royston 3 – 4 2’000 – 1’000
1 Includes shares acquired in the market.
2 Period of service starting 25 March 2010.
3 Period of service ending 25 March 2010.
4 Number of unrestricted shares held as of 25 March 2010.
5 Number of restricted shares held as of 25 March 2010 (including grant 2009 and 2008).