The remuneration report summarises the key principles that determine the remuneration of the Board of Directors and Group Management and also explains the structure and extent of compensation.
HOCHDORF places great importance on recruiting, engaging, motivating, and developing 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 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 through annual employee review meetings at which personal targets and performance are assessed in general terms, as well as according to quantitative criteria, which are derived from the current financial results.
Pursuant to the Ordinance Against Excessive Compensation (ERCO), the Annual General Meeting decides on the remuneration of the Board of Directors and Group Management. The Articles of Association contain a summary of the remuneration principles.
- Article 19, Remuneration of the Board of Directors, provides that the Annual General Meeting approves the total remuneration from the date of the Annual General Meeting until the next ordinary Annual General Meeting.
- Article 23, Remuneration of Group Management, states that the Annual General Meeting approves the total amount of the remuneration for the current year.
|Decision-making responsibilities||Recommendation by||Approval by|
|Maximum total amount of remuneration to be paid to the Board of Directors||Board of Directors||Annual General Meeting|
|Maximum total amount of remuneration to be paid to Group Management||Board of Directors||Annual General Meeting|
|Individual remuneration of the members of the Board of Directors||Personnel and Remuneration Committee||Board of Directors|
|Fixed remuneration paid to Group Management (subsequent year)||Personnel and Remuneration Committee||Board of Directors|
|Variable remuneration paid to Group Management (subsequent year)||Personnel and Remuneration Committee||Board of Directors|
|Remuneration Report||Personnel and Remuneration Committee||Board of Directors|
Each year, the Annual General Meeting separately votes on the proposed resolutions of the Board of Directors concerning the maximum total amounts of remuneration to be paid to the Board of Directors for the period until the next ordinary Annual General Meeting and the remuneration to be paid to Group Management for the current year. The Annual General Meeting votes on the remuneration report on an advisory basis.
The remuneration paid to the Board of Directors consists of fixed remuneration and fixed expenses, 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.
The remuneration includes a base amount for all members of the Board of Directors, a supplementary payment for work as Chair or Vice Chair, as well as flat-rate remuneration for work on committees and for expenses. Special expenses incurred by individual members of the Board of Directors may be reimbursed at a separate daily rate. They must be approved by the Board of Directors and are subject to the approval of the Annual General Meeting (Art. 14 para. 2 ERCO).
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. At the meeting of the Personnel and Remuneration Committee on 19 November 2019 it was decided that the fees would only be paid in cash and that payment of 20% of the fees without expenses in the form of shares in HOCHDORF Holding Ltd would be waived.
|Remuneration of the Board of Directors in CHF||Remuneration||Special expenses||Social contributions||Expenses||2019||2018|
|Bernhard Merki, Chair, PRC; as of 12.04.2019||104,792||58,500||15,390||3,542||182,224||n. a.|
|Jörg Riboni, Vice Chair, AC, PRC; as of 12.04.2019||82,458||74,250||22,338||3,542||182,588||n. a.|
|Markus Kalberer, AC; as of 12.04.2019||58,958||12,000||8,696||3,542||83,196||n. a.|
|Markus Bühlmann, MSC; as of 12.04.2019||38,958||0||5,746||3,542||48,246||n. a.|
|Dr Walter Locher, AC, PRC||98,917||0||14,589||5,000||118,506||93,645|
|Dr Daniel Suter, Chair, AC; until 12.04.2019||42,146||0||6,178||1,458||49,782||170,402|
|Dr Anton von Weissenfluh, Vice Chair, PRC; until 12.04.2019||22,458||0||3,312||1,458||27,228||93,074|
|Michiel de Ruiter, MSC; until 30.09.2019||48,375||0||7,135||3,750||59,260||78,776|
|Ulrike Sailer, MSC; until 30.09.2019||46,875||0||6,913||3,750||57,538||76,488|
|Niklaus Sauter, PRC, AC; until 12.04.2019||23,188||0||3,420||1,458||28,066||95,933|
|Prof Holger Karl-Herbert Till, MSC; until 12.04.2019||18,229||0||2,689||1,458||22,376||76,660|
AC = Audit Committee; PRC = Personnel and Remuneration Committee MSC = Market and Strategy Committee
The Annual General Meeting on 12 April 2019 approved a total amount of CHF 700,000 for the current term of office until the 2020 AGM. The total amount will be exceeded due to additional committee meetings and special expenses in 2019. These special expenses are tasks which lie outside the Board of Directors' activities in the operational area, but which could not be performed by the General Management in the context of the special situation in which the Group found itself. It is proposed to the Annual General Meeting that the difference of CHF 159,010 above the approved total amount be subsequently approved at the 2020 AGM.
The compensation paid to members of Group Management in 2019 consisted of a fixed basic salary and variable, performance-related remuneration, with the variable remuneration for each position based on the consolidated EBIT of the Group after minority interests or, for the heads of the divisions, the EBIT of the respective division after minority interests. There is an upper limit to the variable remuneration for all members of Group Management. It totals a maximum of twice the amount of the basic salary not including expenses. Hence, the total of the basic remuneration and the variable remuneration may not exceed 3 times the basic salary not including expenses. Total compensation also includes retirement benefits, service benefits, and benefits in kind. The Board of Directors defines the details in its remuneration regulations. There are no share or option plans or similar shareholding programmes at HOCHDORF. 30% of the variable remuneration is paid in the form of HOCHDORF Holding Ltd shares, which are subject to a three-year holding period. They are allocated at the volume-weighted average price of all transactions on the SIX on the day before allocation. If a person leaves the Group Management, the shares are freely available immediately. With effect from 1 January 2020, the Board of Directors has agreed new remuneration regulations which will no longer include a partial payment of variable compensation in the form of shares.
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 Remuneration Committee. The Board of Directors defines the range of total compensation and the strategic targets. As is the case with the other members of the Group Management, the compensation of the former CEO, Dr Thomas Eisenring, consisted of a fixed basic salary and a variable, performance-related component. The variable component for the former CEO amounted to 2.0% of the consolidated EBIT for HOCHDORF after minority interests, whereby this must amount to at least CHF 3.5 million. The employment contract with Dr Thomas Eisenring was terminated as of 30 September 2019. No variable remuneration will be paid as a result of negative results.
For the other members of Group Management, the general achievement of personal targets, as well as company results, forms the basis for the decision on compensation for the business year 2019. Variable remuneration is individual-specific. Depending on the business division and the position, it amounts to up to 0.5% of the consolidated EBIT for HOCHDORF after minority interests, whereby this must amount to at least CHF 3.5 million, or between 0.6% and 3.5% of the EBIT generated by the individual’s business division after minority interests. No variable remuneration will be paid as a result of negative results.
Employment agreements are concluded for an indefinite period of time with a notice period of six months.
The amounts are calculated according to the accrual principle in accordance with the provisions of the ERCO.
|Remuneration paid to the CEO and Group Management||Group Management total||CEO|
|In CHF (gross)||2019||2018||2019||2018|
|Basic salary 1||1,533,041||1,832,981||456,004||608,005|
|Variable remuneration 3||100,000||481,269||0||228,857|
|Social contributions, including employee pension||353,810||511,411||118,296||173,070|
|Other benefits 2||117,000||152,500||21,000||28,500|
|Number of members of Group Management||5||5|
- Monthly salary, 13th monthly salary payment, flat-rate amount for entertainment expenses.
- Private shares for company vehicles, vehicle payments, company loyalty gifts.
- No variable remuneration will be paid as a result of negative results. The amount listed here is a special payment to Dr Peter Pfeilschifter for the additional role he has assumed as interim CEO.
The compensation for the CEO only includes the compensation for the previous CEO Dr Thomas Eisenring. The compensation for Dr Peter Pfeilschifter is fully included in the total Group Management cost.
The Annual General Meeting on 12 April 2019 approved a total amount of CHF 3,200,000 for the 2019 reporting year. This total amount will not be exceeded.
In 2019, the Group Management changed as follows:
- Dr Thomas Eisenring CEO; departure on 11 March 2019; continued salary payment until 30 September 2019
- Dr Peter Pfeilschifter CEO; assumption of interim role from 11 March 2019; fully in position from 19 December 2019; retention of the role as Managing Director Dairy Ingredients
- Marcel Gavillet CFO; release from role on 15 November 2019
- Jürgen Brandt CFO; appointment commencing on 18 November 2019
The proposed total amounts create the necessary entrepreneurial flexibility to be able to react to changes (additional members on the Board of Directors and Group Management, changes in committees, special events, general reserve). There is no intention to exhaust the framework amounts. 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 remuneration is approved by the Annual General Meeting an additional amount if the remuneration previously approved is insufficient for his or her remuneration. For each remuneration period, the additional amount may not exceed 30% of the most recently approved maximum amount of fixed remuneration for Group Management.
From 1.1.2020, the compensation paid to the new CEO, Dr Peter Pfeilschifter comprises a fixed basic salary and a variable component of a maximum of CHF 120,000. This variable component is determined on the basis of individual performance and conduct targets in accordance with the remuneration regulations of the Board of Directors of HOCHDORF Holding Ltd. The variable salary component of a maximum of CHF 120,000 is determined in the spring of the following year after the Chair of the Board of Directors has made an assessment of performance and conduct targets and after the annual financial statements have been audited. The variable component is paid out in cash.
Board of Directors
Approval of the total sum of the fixed remunerations for the Board of Directors to a maximum of CHF 600,000 for the business year 2020.
Approval of the total sum of the fixed and variable remunerations for the Board of Directors to a maximum of CHF 2,000,000 for the business year 2020.
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 six months. They remain entitled to salaries and bonuses during this notice period.
The personnel changes in the Group Management in the reporting period are listed above. The remuneration owed to former members of Group Management in the reporting period has been accrued accordingly. The following changes took place in the Board of Directors in 2019: Dr Anton von Weissenfluh and Prof Dr Holger Karl-Herbert Till tendered their resignation as members of the Board of Directors at the Annual General Meeting on 12 April 2019. Dr Daniel Suter and Niklaus Sauter were voted out of office as members of the Board of Directors at the Annual General Meeting on 12 April 2019. Michiel de Ruiter and Ulrike Sailer announced their resignation as members of the Board of Directors as of 30 September 2019. The compensation paid to them is listed above. Bernhard Merki, Jörg Riboni, Markus Kalberer and Markus Bühlmann were elected as new members of the Board of Directors at the Annual General Meeting on 12 April 2019.
In advance of the 2020 Annual General Meeting, the members of the Board of Directors Bernhard Merki, Jörg Riboni, Markus Kalberer and Dr Walter Locher have announced that they will no longer stand for re-election.
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||2019||2018|
|Bernhard Merki||Chair, PRC; as of 12.4.2019||5||n. a.|
|Jörg Riboni||Vice Chair, AC, PRC, as of 12.4.2019||0||n. a.|
|Markus Kalberer||AC; as of 12.4.2019||10||n. a.|
|Markus Bühlmann||MSC; as of 12.4.2019||0||n. a.|
|Dr Walter Locher||AC, PRC||1,713||1,713|
|Dr Daniel Suter||Chair, AC; until 12.4.2019||n. a.||895|
|Dr Anton von Weissenfluh||Vice Chair, PRC; until 12.4.2019||n. a.||1,809|
|Michiel de Ruiter||MSC; until 30.9.2019||n. a.||225|
|Ulrike Sailer||MSC; until 30.9.2019||n. a.||233|
|Niklaus Sauter||PRC, AC until 12.4.2019||n. a.||620|
|Prof Holger Karl-Herbert Till||MSC; until 12.4.2019||n. a.||339|
AC = Audit Committee; PRC = Personnel and Remuneration Committee, MSC = Market and Strategy Committee
|Dr Peter Pfeilschifter||Interim CEO from 11.3.2019, CEO from 19.12.2019, Managing Director Dairy Ingredients||257||63|
|Jürgen Brandt||CFO as of 18.11.2019||0||n. a.|
|Frank Hoogland||Managing Director Baby Care||482||290|
|Dr Thomas Eisenring||CEO until 8.3.2019||n. a.||2,309|
|Marcel Gavillet||CFO until 14.11.2019||n. a.||1,802|
In the reporting year no additional fees and remunerations were paid to the Board of Directors or to the Group Management or parties closely linked to them, with the exception of the aforementioned special expenses to individual members of the Board of Directors.
Loans are fundamentally never granted to members of the Board of Directors, the CEO, Group Management, or employees of HOCHDORF. During the reporting period, no collateral (loan guarantees, other guarantees, etc.) was granted. Neither HOCHDORF Holding Ltd nor any other Group company has waived any claims against a member of the Board of Directors or Group Management.
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.