3. Compensation principles
The compensation framework of SIG reflects the commitment to attract, engage and retain top talent globally and to align the interests of SIG leaders with those of shareholders. SIG’s overall compensation framework is long-term in nature and designed to reward outperformance and effectively address underperformance, with performance defined relative to targets and, in some cases, relative to peers. SIG endeavours to make its compensation principles simple and transparent for the benefit of shareholders, Board and management. The compensation principles are illustrated in Figure 6. They are reviewed by the Compensation Committee on a regular basis.
Figure 6: SIG compensation framework, objectives and principles
To assess SIG’s compensation system not only from an internal equity perspective but also from an external competitiveness perspective, compensation is periodically benchmarked against that of similar roles in comparable companies. The Compensation Committee uses this analysis to review the composition, level and structure of the compensation of the Board and the Group Executive Board on a regular basis.
For the Board, Swiss listed industrial companies are considered the most relevant reference market for compensation comparison, reflecting the specific governance regime and regulatory aspects of the Swiss market1. For the Group Executive Board, a broader industry-related European comparator group is considered appropriate to assess compensation practices, structure and pay levels given SIG’s international footprint and reflecting the recruiting market2. In both cases, size criteria apply.
Figure 7 provides an overview of the compensation elements for the Board and the Group Executive Board:
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Board of Directors |
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Group Executive Board |
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Fixed compensation elements |
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Annual base salary |
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Annual base fee |
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Annual Committee fee(s) |
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Pension contributions |
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Other benefits |
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Variable compensation elements |
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Short-Term Incentive Plan |
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Long-Term Incentive Plan |
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Where required by Swiss law, members of the Board of Directors may be insured via the pension fund of the Company. In this case, contributions will be fully funded by the respective member of the Board. Additional details for each compensation element are included later in this report.
1 The comparator group used for the compensation benchmarking analysis of the Board conducted in 2021 consisted of the following Swiss listed industrial companies: ARYTZA, Barry Callebaut, BKW, Bucher, Clariant, DKSH, dormakaba, Dufry, Flughafen Zürich, Geberit, Georg Fischer, OC Oerlikon, SFS Group, Straumann, Sulzer, Vifor Pharma.
2 The comparator group used for the compensation benchmarking analysis of the Group Executive Board conducted in 2021 consisted of the following comparators: Aalberts, AMS, ARYTZA, Barry Callebaut, BKW, Bucher, Clariant, DKSH, DMG MORI, dormakaba, Duerr, Dufry, Flughafen Zürich, GEA, Georg Fischer, IMI, Kingspan, OC Oerlikon, SFS Group, Spirax-Sarco, Straumann, Sulzer, Vifor Pharma, Weir.