Letter from the Chair of the Compensation Committee
On behalf of the Board of Directors and the Compensation Committee, I am pleased to introduce the Compensation Report of SIG Group AG (“SIG” or the “Company”) for the year ended 31 December 2022. This report on compensation complements our business, financial, social responsibility and corporate governance reports, and describes SIG’s compensation system and its governance, as well as the underlying principles that ensure that compensation, particularly the variable components, is linked to the overall performance of SIG.
The principles guiding SIG’s compensation framework are to attract, engage and retain executives and employees, to drive sustainable performance and to encourage behaviours that are in line with SIG’s values as well as with the long-term interests of shareholders. The Compensation Committee regularly assesses, reviews and develops the compensation framework to ensure that it is aligned with these principles.
As a continuation of prior-year efforts and to accommodate the two successful acquisitions of Scholle IPN and Evergreen Asia completed during 2022, the Compensation Committee worked closely with the committee overseeing and supporting the integration process. This included the planning for the personnel changes to the Group Executive Board. On the compensation side, the performance of these acquisitions from a financial and particularly from a share price-related perspective is reflected via the outcomes of the variable compensation. This is especially the case for the long-term compensation element, which makes up a meaningful part of the overall compensation packages of SIG’s Group Executive Board members.
SIG is convinced that Diversity, Equity and Inclusion (DE&I) as well as an open corporate culture are important drivers for innovation and successful collaboration. We are committed to creating a workplace where employees are treated fairly with equal employment, compensation and development opportunities. SIG has committed to running gender pay analyses in future years, even though not required to do so under applicable local law, thereby underpinning our commitment towards a gender-diverse workplace. We are happy to provide you with additional insights into our initiatives and activities for our most valuable asset – our employees – in the Corporate Responsibility Section of the Annual Report. Please refer to Our people to have a deeper dive into the topic.
A strong focus on ESG matters is integral to SIG’s business strategy and activities, including the compensation framework. An ESG metric has been included in the short-term incentive since 2021, and its weighting was increased from 5% to 10% for this reporting year, 2022. Targeting an objective, relative and independent perspective on SIG’s ESG performance, the Compensation Committee decided to continue using the respected EcoVadis evaluation as an assessment tool. The EcoVadis score reflects SIG’s performance in the areas of Environment, Labour & Human Rights, Ethics and Sustainable Procurement, and encompasses a comprehensive view of ESG with relevance for all SIG employees.
In line with our values, we welcome feedback from shareholders and maintain a high level of engagement with them. In 2022, we continued to work on addressing their comments and questions. As part of its standard annual work, the Compensation Committee regularly assesses, reviews and develops the compensation framework to foster sustainable performance. Following periodic assessment of the compensation framework, the Compensation Committee has concluded that the principles, elements and processes currently in place continue to be appropriate for SIG. We are therefore not proposing any changes to the framework, which provides stability and comparability, as well as alignment of shareholder and management interests through its strong focus on performance-based, variable compensation. The Compensation Committee will continue to regularly monitor market trends and developments and to assess opportunities for further development.
At the upcoming Annual General Meeting (“AGM”), we will ask our shareholders to approve prospectively, in binding votes, the maximum aggregate amount of compensation for the Board of Directors until the next AGM in 2024 and the maximum aggregate amount of compensation for the Group Executive Board for the year 2024. Furthermore, this Compensation Report will be submitted to shareholders for a non-binding, consultative vote.
We believe that this report provides a comprehensive overview of SIG’s compensation philosophy and approach. We are convinced that our remuneration system rewards performance in a balanced and sustainable manner that is well aligned with shareholders’ interests and equips SIG with effective tools in a competitive work environment.
On behalf of SIG, the Compensation Committee and the entire Board of Directors, I would like to thank you, our shareholders, for your contribution and your continued trust in SIG.
Chair of the Compensation Committee