Shareholders' Letter

Payment of the variable performance-related component
The variable performance-related component is determined in the following year once the consolidated
financial statements become available, on the basis of the incentive targets fixed in the
year under review, and is paid in April of that following year. A 100% cash payment is made in the
case of a member of the Group Executive Board not bound by the share option scheme and a member
who left at the end of May 2010. The other members of the Group Executive Board receive 75%
of the variable performance-related component in cash and 25% in Swisscom shares, with the
exception of one member who receives 64% in cash and 36% in shares. During the year under
review, two members each were awarded a bonus in the form of shares or shares and cash. The
shares are allocated on the basis of the tax value, rounded up to whole numbers of shares, and
are subject to a three-year blocking period. The disclosed share-based remuneration in the year
under review is increased by the factor 1.19 in order to reflect the difference between the market
value and the tax value. The market value of the shares depends on the purchase date (usually
three weeks prior to allocation) or the cut-off date if treasury shares are issued. Shares for the year
under review will be allocated in April 2011. A total of 2,767 shares with a tax value of CHF 328
and a market value of CHF 392 per share were allocated to members of the Group Executive Board
in April 2010 for 2009. In April 2009, 3,254 shares with a tax value of CHF 265 and a market value
of CHF 316 per share were allocated for the 2008 business year.
Achievement of targets
In the year under review, the Group targets (without Fastweb) were exceeded and Fastweb’s targets
partially reached. The remaining targets of the segments and Group companies were largely
exceeded.
Total remuneration
The disclosure of fringe benefits and expenses complies with fiscal law. The disclosed fringe benefits
therefore only include a share in a company car. The disclosed retirement benefits (expenses based
on entitlement to or increase in retirement benefits) comprise all savings and risk contributions paid
by the employer to the pension fund, including pro rata contributions to build up a fluctuation reserve.
The following table shows the total remuneration paid to the members of the Group Executive
Board for fiscal years 2010 and 2009, broken down into individual components and including the
highest amount paid to one member. Remuneration paid to those stepping down from the Group
Executive Board includes the respective maximum remuneration up to the end of the notice period
in the year under review or previous year. No additional remuneration is paid out and thus no termination
benefits are reported. In the year under review the basic salary (total CHF 4.889 million)
in relation to the variable performance related bonus (total CHF 4.656 million) amounted to 51 to
49%. The reduction in remuneration paid to the members of the Group Executive Board is mainly
the result of members stepping down and the resulting vacancies. Total remuneration paid to the
CEO increased slightly due to the achievement of the performance targets.
Total Total
Group Group
Executive Executive Thereof Thereof
Board Board Carsten Schloter Carsten Schloter
In CHF thousand 2010 2009 2010 2009
Fixed base salary paid in cash 4,889 5,474 770 770
Variable earnings-related compensation paid in cash 3,333 3,280 707 651
Non-cash compensation 76 80 17 15
Share-based payments variable 1,323 1,079 280 258
Benefits paid following retirement
from Group Executive Board 664 640 – –
Retirement benefits 1,054 1,165 125 125
Severance payments – – – –
Total compensation to members of the Group Executive Board 11,339 11,718 1,899 1,819