Board of Directors
The compensation paid to members of the Board of Directors comprises a basic fee, dependent on their function within this collegiate body. The Directors may also be awarded shares, but they are not contractually entitled thereto; a decision whether to award shares will be made each year. Any shares awarded will be subject to a vesting period of two to four years. The Board of Directors determines the basic fee and any additional share allocation itself.
There was no change in the basic fee for 2011, the amount of which remains as follows (the amounts below do not include social security:
- Chairman of the Board of Directors: CHF 110 000
- Other members of the Board of Directors: CHF 55 000
- Chair of Chairman/Audit Committees: CHF 15 000 extra (per committee)
- Members of Chairman/Audit Committees: CHF 10 000 extra (per committee)
- Member of a Board of Directors on behalf of Bellevue Group: usually an extra CHF 10 000 (per mandate)
- Additional all-in expenses from CHF 5000 to CHF 10 000
In 2012, each director were awarded 1 000 shares of Bellevue Group AG with a two-year blocking period (previous year: none). The information on compensation, shareholdings and loans of the members of the Board of Directors is disclosed in the notes to the consolidated financial statements under sections 5.1 and 5.2 (page 61).
Group Executive Board
The Board of Directors is responsible for determining the compensation of the members of the Group Executive Board.
The compensation paid to the members of the Group Executive Board consists of a basic salary and a variable salary revised annually, as a one-off payment. The current bandwidth of basic salary is ranging from CHF 240 000 to CHF 300 000 (previous year: unchanged); these and the following amounts include no social security contributions). In principle, variable salary for members of the Group Executive Board is based on a performance appraisal, supported by annually agreed targets and expectations. This takes account of position, experience, personal performance and the market environment. These factors are weighted at individual level. The variable salary of the members of the Group Executive Board also forms part of the total amount of variable salary, set at individual segment level and Group-wide (cf. “Additional explanations” below). Variable salary paid to members of the Group Executive Board ranged from CHF 51 000 to CHF 170 000 for 2012, i.e. from 17% to 68% of basic salary. Payments are made in cash up to CHF 100 000; any excesses above that threshold are awarded in the form of shares of Bellevue Group AG and subject to a two-year lock-up period.
Furthermore, CHF 177 000 of variable salary awarded in 2010 was paid during the year under review. Payment was conditional on employment being unterminated as of July 2012.
Variable salary for members of the Group Executive Board in the previous year ranged from CHF 0 to CHF 125 000, i.e. from 0% to 50% of basic salary. In April 2012, 70% of variable salary was paid in the form of shares of Bellevue Group AG, subject to a two-year lock-up period.
The Board of Directors has created a blocked share program for the Group CEO. Under this program, he was allocated 307 062 shares of Bellevue Group AG in May 2012, when their market value was CHF 3 093 000. Those shares remain subject to lock-up until May 2017. A pro rata repayment option exists (except in case of a change of control). In return, the Group CEO waived participation in other bonus schemes for five years and undertook to acquire a substantial interest in Bellevue Group AG during 2012.
The information on compensation, shareholdings and loans of the members of the Group Executive Board is disclosed in the notes to the consolidated financial statements under sections 5.1 and 5.2 (page 61).
Additional explanations
The remuneration of employees of Bellevue Group (except portfolio managers of the asset management segment – see below) also consists of a basic salary and a variable salary, revised annually, as a one-off payment (the following amounts include no social security contributions).
The total amount of variable salary will be determined at operating segment level from 2010. For this purpose, in each case, an adjusted segment result will be calculated, to take account of proportionate Group costs and interest on allocated capital. Conversely, amortisation of intangible fixed assets and tax expenses are eliminated. This adjusted result is allocated in a given mathematical ratio to the shareholders and the available pool for variable salary per segment. The total pool thus calculated for 2012 amounts to CHF 0 (previous year: CHF 0). On the other hand, a new minimum bonus pool has been calculated for the Bank am Bellevue segment since 2012. This is based on operating turnover. If the operating profit pool defined above is smaller, the minimum bonus pool applies. For 2012, this amounts to CHF 1.6 million.
For 2012, no discretionary variable salary were granted (previous year: CHF 2.8 million). In principle, the management of each segment determines individual variable salary. Account is taken of position, experience and personal performance. For client-related areas, elements with a direct bearing on income are also taken into account when calculating personal performance. To assess the personal performance of employees in the fields of processing and monitoring, on the other hand, account can never be taken of elements with a direct bearing on income. The Group CEO has the right of veto of decisions made on compensation for members of segment management.
For 2012, variable salary up to CHF 100 000 is paid in cash. A choice exists for payment of any excess, above the CHF 100 000 threshold: it can either be paid in the form of shares of Bellevue Group AG, subject to a two-year lock-up period, or in the form certain fund products under Bellevue management. If the amount is greater than CHF 200 000, the amount in excess of the CHF 200 000 threshold is allocated only twelve months later, provided that the employment has not been terminated at that time.
In the previous year, variable salary up to CHF 10 000 was paid in cash. Above that threshold, 70% of the total amount was awarded in the form of shares of Bellevue Group AG, subject to a two-year lock-up period.
For portfolio managers in the asset management segment, there are contractual obligations to calculate and pay variable salary. The variable compensation of portfolio managers is governed by the success of the products under their management. The individual teams accordingly share in the net proceeds earned by the respective product. The amount of compensation depends on factors such as the quality of investment performance, measured against relevant benchmark indices, and comparable market offers. No compensation is paid on the seed capital invested in the products. Thus, for the year 2012, variable salary of CHF 2.8 million was based on portfolio management (previous year: CHF 2.1 million). CHF 2.5 million of this is paid to portfolio managers (previous year: CHF 2.1 million), while CHF 0.3 million is paid to other functions. In principle, the relevant team leaders propose the levels of individual variable salary for the portfolio managers. This is then approved by the CEO of the asset management segment. Account is taken of position, experience and personal performance.