Annual Report 2012 - Investor Relations

44Corporate Governance4.2 Other activities and interestsWith the exception of the positions mentioned under 4.1, ExecutiveCommittee members do not engage in any other activities orassociated interests.4.3 Management contractsCham Paper Group Holding AG has not entered into any managementcontracts with third parties.5. Compensation, shareholdings and loans5.1 Content and method of determining compensation andshareholding schemesBoard of DirectorsThe compensation principles and the amount of compensationpayable to Board of Directors members are revised annually by theCompensation and Nomination Committee and determined by theBoard of Directors acting on a proposal from the Compensationand Nomination Committee. Salary comparisons or benchmarksare not systematically taken into account. No external consultantswere involved in the drafting of the compensation principles currentlyin force. The amount of compensation payable to Board ofDirectors members was last adjusted in July 2009. Consultancybriefs for members of the Board of Directors subject to additionalcompensation are granted by the entire Board of Directors and requirethe consent of a majority of the members. Such consultancybriefs are clearly defined and limited in time.The members of the Board of Directors receive an annual compensationin keeping with their duties on the Board. The annualcompensation is based on a base salary including an expense allowanceas well as attendance fees. The base salary depends onthe individual’s position on the Board of Directors. The Chairman ofthe Board of Directors receives a base salary including an expenseallowance of CHF 170,000. The Vice Chairman of the Board ofDirectors receives a base salary including an expense allowance ofCHF 40,000. The other members of the Board of Directors receivea base salary of CHF 30,000, which also includes an expense allowance.The expense allowances compensate the members ofthe Board of Directors for travel and other necessary out-of-pocketexpenses incurred in the performance of their activities on theBoard. The attendance fees vary according to the number of meetingsof the Board of Directors and its committees. For each memberof the Board of Directors, the attendance fees amount to CHF3,000 for an all-day meeting and CHF 1,500 for a half-day meeting.For the committee meetings, the attendance fees amount to CHF4,000 for an all-day meeting and CHF 2,000 for a half-day meeting.The attendance fees for the other committee members are equalto those of the Board of Directors meetings. The overall amount ofcompensation of the members of the Board of Directors and thecompensation of current and former members of the Board of Directorsfor FY 2012 and 2011 are stated on page 75 of the financialstatements of Cham Paper Group Holding AG.Delegate of the BoardThe Delegate of the Board of Directors receives for the performanceof his operative tasks a monthly base salary in cash whoseamount is proposed by the Compensation and Nomination Committeeand subject to the approval of the Board of Directors. Fordetails on the compensation of the Delegate of the Board, pleaserefer to page 75 of the financial statements of Cham Paper GroupHolding AG.Other Executive Committee membersThe principles of compensation of the other Executive Committeemembers are annually revised and established by the Compensationand Nomination Committee. Salary comparisons orbenchmarks are not systematically taken into account. No externalconsultants were involved in the drafting of the compensation principlescurrently in force. The Board of Directors has the ultimatedecision with regard to compensation principles and the amountof compensation payable. This applies equally to the performancebonuses for the other members of the Executive Committee thatare established annually by the Compensation and NominationCommittee and submitted to the Board of Directors for approval.They are valid for one financial year. Once the financial year hasended, target achievement is determined and assessed by thesame people who set the targets. The performance bonuses arepaid out in April of the following financial year and/or optionally inthe form of shares (cf. section 5.2, Shareholding plan). It also fallswithin the discretion and remit of the Board of Directors to rewardmembers of the Executive Committee for out-of-the-ordinary tasksperformed by them (e.g. conducting of strategic projects) by wayof one-off special bonuses. As in the case of performance-basedbonuses, the general conditions for awarding special bonuses areformulated in the Compensation and Nomination Committee andare approved by the Board of Directors.Compensation of the other Executive Committee members consistsof a base salary and a performance bonus. The base salarycomprises a gross salary (compensation before deduction of employeesocial security contributions), expense allowances and remunerationin kind (company car). Annual performance bonusesare paid to the Executive Committee members under a bonus plan.The amount of these bonuses depends on the achievement of thecorporate targets and individual targets, both of which are establishedin advance. The performance bonus is determined for eachExecutive Committee member as a percentage of that member’sgross salary. It amounts to a maximum of 30% of the gross salaryof the Executive Committee members. The maximum bonus isdisbursed for a target achievement of 130% or more. No bonusis paid where the degree of target achievement falls short of theminimum of 70%. The targets include quantitative and qualitativeperformance targets, the quantitative performance target having aweighting of 70% and the qualitative performance target a weightingof 30%. During the year under review the quantitative performancetargets (corporate targets) were based on the achievementof the following targets: operating profit, key net working capitalfigures and sales targets for selected strategic segments. As a