Remuneration Report

The remuneration report summarises all the key principles for determining the compensation of the Board of Directors and Group Management and also explains the structure and amount of compensation.

HOCHDORF places great importance on recruiting, committing, motivating, and fostering well-qualified employees at all levels. This is particularly important when it comes to staffing those positions that have a significant bearing on the management of the company. Remuneration is thus designed in such a way as to create incentives that benefit the long-term development of the company. Performance evaluations are conducted on a qualitative basis in annual employee review meetings, at which personal targets and performance are assessed in general terms, as well as according to quantitative assessment criteria, which are derived from the current financial results.

Ordinance Against Excessive Compensation (VegüV) – amendment of the Articles of Association

Pursuant to the Ordinance Against Excessive Compensation (VegüV), the Annual General Meeting is to decide on the remuneration of the Board of Directors and Group Management. The corresponding amendment of the Articles of Association was adopted at the 2015 Annual General Meeting. Article 19, Remuneration of the Board of Directors, provides that the Annual General Meeting decides on total remuneration for the current year until the next ordinary Annual General Meeting. Pursuant to Article 23, Remuneration of Group Management, the Annual General Meeting approves fixed and variable remuneration for the current year.

Decision-making responsibilities
Topic


Recommended by


Approved by

Remuneration paid to the Board of Directors

Personnel and Compensation Committee

Board of Directors

Fixed remuneration paid to Group Management (subsequent year)

Personnel and Compensation Committee

Board of Directors

Variable remuneration paid to Group Management (subsequent year)

Personnel and Compensation Committee

Board of Directors

Each year, the Annual General Meeting separately approves the proposed resolutions of the Board of Directors concerning the maximum total amounts of compensation to be paid to the Board of Directors for the period until the next ordinary General Meeting and the compensation to be paid to Group Management for the current year.

Remuneration of the Board of Directors

Compensation paid to the Board of Directors consists of a fixed remuneration and a fixed expenses allotment, which are not linked to any profit components. The social contributions to be remitted in relation to remuneration are covered by the company and then offset accordingly.

The amount of the emoluments paid to the Board of Directors is set based on a discretionary decision. In so doing, the Board of Directors relies on published studies on director remuneration, publicly available information on fees paid by listed companies in the same industry, as well as comparisons with remuneration paid for other director mandates.

Compensation includes a base amount for all members of the Board of Directors, a supplementary payment for work as Chairman or Vice Chairman, as well as flat-rate compensation for work on committees and for expenses.

The fees were most recently modified at the meeting of the Board of Directors on 23 October 2014.

The figures show the amounts actually paid out in the reporting period. The members of the Board of Directors are not covered by the pension fund.

Remuneration of the Board of Directors

Compensation

Social benefits

Expenses

2015

CHF

2014

CHF

Josef Leu, Chairman, AC, PCC

95,000

11,799

5,155

111,954

92,141

Anton von Weissenfluh, Vice Chairman, PCC, MSC

63,000

9,395

5,000

77,395

65,051

Meike Bütikofer, MSC

53,000

7,904

5,000

65,904

57,385

Walter Locher, AC

55,000

8,202

5,000

68,202

39,811

Urs Renggli, AC

64,000

9,693

5,000

78,693

69,580

Niklaus Sauter, PCC

51,000

7,606

5,000

63,606

37,127

Holger Karl-Herbert Till, MSC

51,000

7,606

5,000

63,606

37,127

Hans-Rudolf Schurter, Chairman, until 10 May 2014 

0

0

0

0

36,947

Rolf Schweiger, until 10 May 2014

0

0

0

0

17,024

Total

432,000

62,205

35,155

529,360

452,193

AC = Audit Committee; PCC = Personnel and Compensation Committee; MSC = Market and Strategy Committee

The Annual General Meeting on 8 May 2015 approved a total amount of CHF 535,000 for the current term of office until the 2016 AGM. This total amount was not exceeded. The following remuneration is envisioned for the term of office starting with the 2016 Annual General Meeting, with social contributions being factored in at the flat rate of 15%:

Remuneration of the Board of Directors in CHF

Compensation

Meetings

committees

Social benefits

Expenses

2016

CHF

Josef Leu, Chairman, PCC 

55,000

30,000

12,750

5,000

102,750

Anton von Weissenfluh, Vice Chairman, PCC, MSC

49,000

14,000

9,450

5,000

77,450

Meike Bütikofer, MSC

45,000

8,000

7,950

5,000

65,950

Walter Locher, AC

45,000

10,000

8,250

5,000

68,250

Urs Renggli, AC

45,000

19,000

9,600

5,000

78,600

Niklaus Sauter, AC, PCC

45,000

16,000

9,150

5,000

75,150

Holger Karl-Herbert Till, MSC

45,000

6,000

7,650

5,000

63,650

Total

329,000

103,000

64,800

35,000

531,800

The total amount for 2016 to be put to a vote comes to CHF 535,000, as rounded.

Remuneration of Group Management

Compensation paid to Group Management is composed of a fixed basic salary and variable, per­formance-related remuneration, with variable compensation for each position being based on the consolidated EBIT of the Group or on the EBIT of the respective business area. Total compensation also includes retirement benefits, service benefits, and benefits in kind. The Board of Directors defines the details in the compensation regulations. There are no share or option plans or similar shareholding programmes in the HOCHDORF Group.

The Board of Directors sets the amount of the emoluments paid to Group Management. In so doing, it relies on the recommendation and proposed resolution of the Personnel and Compensation Committee.The Board of Directors defines the range of total compensation and the strategic targets. As is the case with other members of Group Management, the CEO's compensation is composed of a fixed basic salary and variable, performance-related compensation. For the CEO, variable remuneration amounts to 2.5% of the consolidated EBIT for the HOCHDORF Group, whereby this must amount to at least CHF 3.5 million. The employment agreement is concluded for an indefinite period of time, with a notice period of six months.

For all other members of Group Management, the general achievement of personal targets, as well as company results, forms the basis for the decision on compensation. Variable remuneration is individual-specific. Depending on the business area and the position, it amounts to 0.5% of the consolidated EBIT for the HOCHDORF Group, whereby this must amount to at least CHF 3.5 million, or between 0.75% and 5% of the EBIT generated by the individual’s business area. The employment agreements are concluded for an indefinite period of time, with a notice period of four or six months.

The amounts are calculated according to the accrual principle in accordance with the provisions of the VegüV.

Remuneration paid to the CEO and Group Management 

Group Management Total

CEO

In CHF (gross)

2015

2014

2015

2014

Basic salary 1

 1,660,237

1,484,347

 467,800

433,350

Variable remuneration

1,151,725

960,861

503,641

500,388

Social contributions, including personal pension

425,756

395,208

136,208

135,869

Other benefits 2

129,883

103,495

28,000

28,000

Total

3,367,601

2,943,911

1,135,649

1,097,607

Benefit with effective variable remuneration for the financial year

 

2,837,832

 

1,094,405
Number of members of Group Management86
  1. Monthly salary, 13th monthly salary payment, flat-rate amount for entertainment expenses.
  2. Private apportionments for company cars, car allowances, gifts for length of service, and reimbursement of school fees.

The Annual General Meeting on 8 May 2015 approved a total amount of CHF 3,200,000 for the 2015 reporting period. The approved amount was exceeded because two new members joined Group Management: Christoph Peternell (starting 1 June 2015) and Frank Hoogland (starting 14 September 2015). As described below in Article 23 of the Articles of Association, an additional amount may be paid to new members if the remuneration approved by the Annual General Meeting is not sufficient. The additional amount may not exceed 30% of the most recently approved maximum amount of fixed compensation for Group Management. This upper limit was not exceeded.

Based on contractual agreements and the calculation of variable remuneration using the budgeted results for 2016, the total amount for 2016 to be put to a vote is composed of the following:

Remuneration paid to the CEO and Group Management Group Management Total CEO
In CHF (gross) 2016 2016

Basic salary

1,948,975

467,800

Variable remuneration

1,380,553

575,724

Social contributions

490,264

143,423

Other benefits

176,800

28,000

Total

3,996,592

1,214,947

Number of members of Group Management

8

 

Variable compensation paid to Group Management amounts to an average of 5% of EBIT. In order to be able to cover the possibility that the budget may be exceeded in 2016, a reserve of 50% was factored in, which amounts to about CHF 700,000 in additional variable remuneration.

The total amount for 2016 to be put to a vote comes to CHF 4,700,000, as rounded.

Pursuant to Article 23 of the Articles of Association, the company or companies controlled by it are authorised to pay each member who joins Group Management or is promoted within Group Management after the time at which the total amount of fixed compensation is approved by the Annual General Meeting an additional amount if the compensation previously approved is insufficient for his or her compensation. For each compensation period, the additional amount may not exceed 30% of the most recently approved maximum amount of fixed compensation for Group Management.

Change-of-control clauses

The employment agreements for the members of Group Management do not include any change-of-control clauses. There are no systems in place for severance payments, and none were set up during the reporting period. The notice period for members of Group Management is four to six months. They remain entitled to salaries and bonuses during this notice period.

Remuneration paid to former members of Group Management and the Board of Directors

Michiel de Ruiter, Managing Director Baby Care, left the company as a member of Group Management effective 30 April 2015. There were no changes to the Board of Directors in 2015. The following remuneration was paid:

Remuneration paid to Group Management Group Management Total
In CHF (gross) 2015

Basic salary

89,733

Variable pro-rata remuneration for 2015 (paid in 2016)

166,660

Social contributions

30,413

Other benefits

1,600

Total

288,406

Shareholdings

As at 31 December, the individual members of the Board of Directors and Group Management (including related persons) held the following number of shares in the company:

Board of Directors 2015 2014

Josef Leu

Chairman, AC, PCC

1,290

1,290

Anton von Weissenfluh

Vice Chairman, PCC, MSC

1,203

1,000

Meike Bütikofer

MSC

441

441

Walter Locher

AC

1,200

1,200

Urs Renggli

AC

5,628

4,654

Niklaus Sauter

PCC

114

114

Holger Karl-Herbert Till

MSC

150

0

Total

 

10,026

8,699

AC = Audit Committee; PCC = Personnel and Compensation Committee; MSC = Market and Strategy Committee

Group Management 2015 2014

Thomas Eisenring

CEO 

600

400

Marcel Gavillet

CFO

1,300

700

Karl Gschwend

Managing Director Strategic Projects

114

114

Werner Schweizer

Managing Director Dairy Ingredients

165

165

Michel Burla

Managing Director Cereals & Ingredients

300

200

Folkert Togtema

Managing Director Baby Care, starting 1 May 2015

32

n.a.

Christoph Peternell

COO, starting 1 June 2015

200 n.a.

Frank Hoogland

Managing Director Global Marketing and Sales, starting 14 September 2015 0 n.a.

Michiel de Ruiter

Managing Director Baby Care, until 30 April 2015 n.a. 1’576

Total

 

2,711

3,155

Additional fees and remuneration

No additional fees or remuneration were paid to the Board of Directors or Group Management, including related persons, during the reporting period or the previous year.

Loans/collateral granted to the Board of Directors and Group Management

Loans are never granted to members of the Board of Directors, the CEO, Group Management, or employees of the HOCHDORF Group. No collateral (loan guarantees, other guarantees, etc.) was granted during the reporting period. Neither HOCHDORF Holding Ltd nor other Group companies have waived a claim in respect of a member of the Board of Directors or Group Management.

Loans/collateral to related persons

As was the case in the previous year, no loans or collateral were granted to related persons during the reporting period. No loans or collateral existed as at the end of the reporting period.