Remuneration of the Executive Board
The Board of Directors lays down the remuneration model for the members of the Executive Board. The current remuneration model has been in force since 3 February 2014.
Following a proposal from the Governance, Nomination and Compensation Committee (GNCC), the Board of Directors modified the remuneration model slightly at that time compared with the previously applicable model in terms of the profit-related (variable) remuneration. The profit-related remuneration was brought more into line with the effectively achieved result. These changes have been incorporated in the regulations governing the profit-related remuneration of the Executive Board. The non-profit-related (fixed) remuneration and the lump-sum expenses allowances are reviewed periodically; the latter have been approved by the cantonal tax office. The level of the profit-related remuneration (individual bonus) is recalculated and specified on an annual basis as a function of the financial result.
There are no fixed-term employment contracts and no periods of notice in excess of 12 months. No severance payments are made to members of the Executive Board upon termination of their employment relationship.
The remuneration for members of the Executive Board is made up of the following components:
a) Non-profit-related (fixed) remuneration
The non-profit-related (fixed) remuneration of members of the Executive Board is determined by the Board of Directors on the basis of their training, competences and functions. This component of the remuneration includes any family allowances and awards for service anniversaries.
Following a three-year period without any changes to the non-profit-related remuneration, an individual adjustment has been made for 2017. The non-profit-related remuneration of the Executive Board, as part of the overall amount approved by the General Meeting, was adopted by the Board of Directors on 3 February 2017.
The overall amount of non-profit-related remuneration for 2018 was approved by the General Meeting of 26 April 2017. The overall amount of non-profit-related remuneration for 2019 will be submitted to the General Meeting on 04 May 2018 for approval. This will be CHF 2,300,000.
b) Profit-related (variable) remuneration
With the remuneration model that was modified in 2014, the group profit is the sole component by which the profit-related remuneration of the CEO is measured. For the other members of the Executive Board, the profit-related remuneration takes in the components of group profit, the division result (EBIT) and the individual performance assessment, with different weightings. These are calculated as a percentage of the fixed remuneration:
- Division result (0 – 12 %)
- Individual assessment (0 – 12 %)
For the group profit component, the level of remuneration is derived directly from the result achieved. This component is only paid out if the group profit is higher than CHF 10 million. Since the 2014 financial year, the group profit component has been 1.75 % of the annual result for the CEO and 0.7 % of the annual result for the other members of the Executive Board.
Individual components are given a higher weighting or left out of account altogether depending on the individual members’ areas of responsibility. None of the maximum of three variable components is due to the members of the Executive Board independently of the course of business or independently of their individual performance. All profit-related remuneration elements are paid out in cash.
For the 2017 reporting year, the profit-related component of the remuneration for Executive Board members averaged 6% (previous year: 44 %) of the overall remuneration. Of this approximately 78% (81%) was paid as a cash component, as in the previous year, and 22% (19 %) was paid to the various social insurance schemes.
The overall amount of CHF 146,110 for the profit-related remuneration for the 2017 financial year will be submitted to the General Meeting on 04 May 2018 for approval (gross amount including social insurance contributions).
c) Expenses
The members of the Executive Board receive an expenses allowance which varies according to their function and a lump-sum car allowance based on the distance travelled. In 2017, the overall amount is CHF 142,000 (previous year CHF 142,000). These expenses allowances have been approved by the cantonal tax authorities.
d) Shares, options
The MCH Group does not have any share or option schemes for the Executive Board. Details of shares in MCH Group Ltd. that are held by members of the Executive Board:
Annual Report / Corporate Governance / Executive Board
e) Sign-on bonuses
No sign-on bonuses are paid to members of the Executive Board.
f) Loans, credit
Insofar as loans and credit are granted to members of the Executive Board, this is done at the standard market conditions.
g) Suretyships
No suretyships (sureties, guarantees) were awarded to members of the Executive Board in the reporting year.
h) Pension fund payments
The payments the employer is required to make to pension funds are stated in the table “Remuneration”. Since 1 July 2012, the profit-related remuneration of the members of the Executive Board (and of all other employees entitled to this) has similarly been insured in the pension fund.
Remuneration 2017
The profit-related remuneration for the entire Executive Board for 2017, submitted to the General Meeting on 04 May 2018 for approval, is CHF 146,110 gross (profit-related remuneration CHF 116,780 net, plus social insurance contributions of CHF 29,330).
In the 2017 financial year, no use was made of the additional amount of CHF 1,000,000 specified in the statutes for the remuneration of Executive Board members who are appointed after the General Meeting's vote on the remuneration of the Executive Board.
For consultancy work by former Executive Board members, the MCH Group paid fees totalling CHF 198 000 in 2017 (without VAT).
Remuneration 2016
For consultancy work by former Executive Board members, the MCH Group paid fees totalling CHF 345,000 in 2016 (without VAT).
