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4. Compensation framework for the Board of Directors

Compensation overview for the Board of Directors

To underline the role of the Board to perform independent oversight and supervision of SIG, the entire compensation of the Board is fixed and does not contain any variable pay component.

The compensation for the members of the Board of Directors is composed of two components: a fixed annual base fee and fixed annual Committee fee(s) for assuming the role of the Chairperson of a Board Committee or as a member of Board Committees. Only ordinary members of the Board are entitled to the additional Committee fees. The compensation of the Chairman of the Board consists of the annual base fee only. Required employee social security contributions under the relevant country’s applicable law are included in the compensation. Where required by Swiss law, members of the Board of Directors are insured in the Company’s pension plan. However, the employer pension contribution is entirely funded by the respective member of the Board of Directors. This means that the member of the Board pays for the totality of the pension contributions (employee and employer portion) while the Company does not make any contributions. In 2021, only the Chairman of the Board was insured via the Company’s pension plan. No additional compensation components such as lump-sum expenses or attendance fees are awarded to any member of the Board. The compensation levels for the members of the Board of Directors remained unchanged from those established in 2018.

The amount of the annual base fee and annual Committee fees for the Chairperson and the members of the respective Committees are illustrated in Figure 8.

FIGURE 8: OVERVIEW OF THE BOARD OF DIRECTORS’ FEES

 

 

 

 

Annual committee fees (in CHF, gross)

 

 

Annual base fee (in CHF, gross)

 

Audit and Risk

 

Compensation

 

Nomination and Governance

(in CHF, gross)

 

 

Chair

 

Member

 

Chair

 

Member

 

Chair

 

Member

Chairperson

 

550,000

 

Not entitled

Ordinary member

 

175,000

 

50,000

 

25,000

 

40,000

 

15,000

 

40,000

 

15,000

The individual sum of the annual base fee and, where applicable, the annual committee fee per member continues to be paid 60% in cash and 40% in blocked SIG shares.

The equity component is intended to further strengthen the long-term focus of the Board in performing its duties and to align the Board members’ interests with those of SIG’s shareholders. Both the cash and share elements are paid out in arrears on a quarterly basis in four equal instalments. A three-year blocking period is applied to the SIG shares, expiring at the third anniversary of each respective grant. This approach is illustrated in Figure 9.

Figure 9: Compensation approach of the Board of Directors

Compensation approach of the Board of Directors (illustration)

Compensation awarded to the Board of Directors (audited)

Table 1 summarises the compensation for 2021 of the nine non-executive members of the Board. The Board was expanded at the AGM in 2021 to include two additional members, as outlined in the Corporate Governance Report. As in previous years, Nigel Wright is associated with Onex Corporation, a former major shareholder of SIG (2018 until 2020) and again waived any form of compensation for his service on the Board in 2021.

Table 1: Total compensation of the Board of Directors in 2021 (1 January – 31 December) including information of the prior year

Members of the Board of
Directors on 31 December 2021

 

Board membership

 

ARC1

 

CC2

 

NGC3

 

Settled in cash,
CHF
4

 

Settled in SIG shares,
CHF
5

 

Social security payments,
CHF
6

 

Total compensation earned in 2021, 
CHF

 

Total compensation earned in 2020, 
CHF

Andreas Umbach

 

Chair

 

 

 

 

 

Chair

 

330,0007

 

220,011

 

34,378

 

584,389

 

587,628

Matthias Währen

 

 

Chair

 

 

 

 

 

135,000

 

90,062

 

12,833

 

237,895

 

237,824

Colleen Goggins

 

 

 

 

Chair

 

 

 

129,000

 

86,024

 

12,212

 

227,236

 

227,195

Werner Bauer

 

 

 

 

 

 

129,000

 

86,024

 

12,212

 

227,236

 

227,195

Wah-Hui Chu

 

 

 

 

 

 

123,000

 

82,031

 

11,592

 

216,623

 

216,601

Mariel Hoch

 

 

 

 

 

 

129,000

 

86,024

 

15,397

 

230,421

 

230,376

Martine Snels8

 

 

 

 

 

 

 

 

72,888

 

48,639

 

 

121,527

 

Abdallah al Obeikan8

 

 

 

 

 

 

 

 

72,888

 

48,639

 

8,840

 

130,367

 

Nigel Wright

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

1,120,776

 

747,454

 

107,464

 

1,975,694

 

1,726,819

1

Audit and Risk Committee.

2

Compensation Committee.

3

Nomination and Governance Committee.

4

Represents gross amounts paid, prior to any deductions such as employee social security and income withholding tax.

5

Represents gross amounts settled in blocked SIG shares, prior to any deductions such as employee social security and income withholding tax. The number of blocked SIG shares is determined by dividing each Board member’s individual compensation amount (settled in shares) for one award cycle by the average closing price of the SIG share of the first ten trading days of the third month of the quarter for which the blocked SIG shares are granted.

6

Employer social security contributions.

7

Includes employer pension contributions in the amount of CHF 46,880 funded by the Chairman through a reduction of the cash portion of the fee.

8

Martine Snels and Abdallah al Obeikan were elected as members of the Board of Directors at the Annual General Meeting in April 2021. The respective numbers disclosed reflect the period from 21 April 2021 until 31 December 2021.

Reconciliation of approved and paid compensation to the Board of Directors

The reconciliation of the approved and granted amounts is illustrated in Figure 10.

FIGURE 10: RECONCILIATION OF COMPENSATION OF THE BOARD OF DIRECTORS

Reconciliation of compensation of the Board of Directors (illustration)