Shareholders' Letter

Compensation for the members of the Group Executive Board
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
The compensation paid to the Group Executive Board consists of a basic salary, a variable performance-related
share of profits as well as non-cash benefits and additional benefits (in particular
company car) as well as pension benefits. The variable performance-related share of profits is fixed
in the subsequent year on the basis of the consolidated financial statements and the incentive
targets fixed in the year under review and is paid out in April of the following year. Apart from a
100% cash payment in the case of one member who did not participate in the equity-share participation
programme and one member who resigned from the Group Executive Board as of the
end of August 2009, 75% of the variable performance-related share of profits are paid out in cash
and 25% in Swisscom shares to the remaining members of the Group Executive Board with the
exception of one member with a cash portion of 64% and an equity-share portion of 36%. In the
reporting period, two members each were awarded a bonus in the form of shares or shares and
cash. The shares are allocated on the basis of their value accepted for tax purposes – rounded up
to the next whole number of shares – and are subject to a three-year retention period. The sharebased
compensation for the reporting period is augmented by a factor of 1.19 in order to take
account of the difference between the market value and the tax value. The market value is determined
as of the acquisition date of the shares in case of their purchase (usually three weeks before
their allocation) or, if treasury shares are allocated, as of the date of their allocation. Shares in
respect of the current year are allocated in April 2011. As regards the financial year 2009, 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. In April 2009, 3,254 shares with a tax value
of CHF 265 and market value of CHF 316 per share were allocated in respect of the 2008 financial
year. As regards the disclosure of non-cash benefits and expenses, these are dealt with from a tax
point of view. Of the non-cash benefits reported, only a share of the use of a company car is thus
included in the reported compensation. Reported pension benefits (amounts which give rise to
pension entitlements or increase pension benefits) encompass all savings and risk contributions
paid by the employer to pension plans, including proportionate contributions to constitute fluctuation
reserves for changes in plan asset values.
All compensation was accrued in accordance with the International Financial Reporting Standards
(IFRS). The highest compensation in the reporting year and prior year was paid to the CEO of
Swisscom Ltd, Carsten Schloter. Swisscom has granted no sureties, guaranties or pledges in favour
of third parties or other collateral to any of the persons impacted by the reporting obligation. No
compensation was paid to former members of the Group Executive Board in connection with their
earlier activities as a member of a governing body of the Company and which is not at arm’s length.
The compensation disclosed does not include the employer’s share of social security contributions
in particular for old age, accident and unemployment insurance. The social security contributions
for the Group Executive Board in 2010 totalled CHF 1.1 million (prior year: CHF 1.1 million).
Payments to related parties
Related parties are spouses and common-law spouses, close relatives who are financially dependent
on the member of the governing body or live in the same household, other persons who are
financially dependent on such individuals as well as partnerships or corporate entities that are
controlled by the member of the governing body or over which the individual exercises a significant