In accordance with the Articles of Incorporation and the Organizational Regulations of dormakaba Holding AG, the Board of Directors is responsible for the principles underlying the compensation policy and for the steering process; it is supported in this work by the Compensation Committee.
The Compensation Committee consists of three members of the Board of Directors who are elected annually and individually by the AGM for a period of one year. At the AGM of 2017, the shareholders elected Rolf Dörig (chair), Hans Gummert, and Hans Hess as members of the Compensation Committee.
The Compensation Committee’s main tasks are to:
- Propose and periodically review the compensation policy and regulations for the attention of the Board of Directors;
- Propose to the Board of Directors the specific design of the fundamental compensation elements and the determination of the compensation-related performance objectives;
- Propose to the Board of Directors the maximum aggregate compensation amount of the Board of Directors and of the Executive Committee to be submitted to the shareholders’ vote at the AGM;
- Propose to the Board of Directors the compensation to be paid to its members within the limits approved by the AGM;
- Decide on the terms of appointment, significant changes in existing employment contracts, and compensation for the members of the Executive Committee within the limits approved by the AGM;
- Decide on the share-based compensation to be awarded to the members of the Executive Committee and the Senior Management;
- Propose to the Board of Directors the Compensation Report.
Compensation for the Executive Committee as well as the Senior Management is set as part of an annual process.
Annual process and responsibilities for compensation of the Board of Directors and Executive Committee
Compensation policy review and compensation principles for next financial year
Compensation planning and share award plan design
CC (LTI design)
Maximum aggregate compensation amounts of the Board of Directors and EC for next compensation period
Compensation structure and level of Board of Directors for next compensation period
Individual target compensation of EC members for next financial year *
Individual short-term incentive payments EC members for previous financial year *
Individual share awards EC members and Senior Management *
Review of external stakeholder feedback on compensation disclosure and changes for next disclosure
CC meeting schedule and agenda for next period of office
AGM: Annual General Meeting, BoD: Board of Directors, CC: Compensation Committee, CEO: Chief Executive Officer
red: body which recommends
blue: body which reviews
gray: body which approves
* Proposals related to the CEO compensation are prepared by the Chairman of the Compensation Committee and approved by the Compensation Committee
The Compensation Committee meets as often as business requires but at least once a year. In the financial year 2017/18, the Compensation Committee held five meetings of approximately one to two hours each. All meetings were attended by all members.
The Chairman of the Compensation Committee reports to the Board of Directors after each meeting on the activities of the committee. The minutes of the committee’s meetings are available upon request to the members of the Board of Directors. As a general rule, the Chairman of the Board of Directors, the CEO, and the Senior Vice President Group Human Resources attend the Compensation Committee meetings in advisory capacity. They do not attend the meeting, or parts thereof, when their own compensation and/or performance are being discussed.
The Compensation Committee may decide to consult external advisors on specific compensation matters. As in previous years, Korn Ferry Hay Group, an internationally recognized consulting firm, has been appointed to provide benchmarking data on compensation of Executive Committees of comparable companies. Agnès Blust Consulting, a company specialized in executive compensation in Swiss listed companies, has been appointed to provide independent advice in specific compensation and governance matters. These consulting firms do not have any non-Human Resources related mandate with dormakaba.
The Board of Directors values the dialogue with shareholders and wants to know and understand their views about executive compensation. In this context, the Board of Directors already started holding a consultative vote on the Compensation Report in the financial year 2012/13 and continued ever since. This vote allows shareholders to express their opinion on the compensation policy and systems applicable to the Board of Directors and the Executive Committee. Since the 2015 AGM, the Board of Directors also seeks an annual prospective binding approval from shareholders of the maximum aggregate amount of compensation of the Board of Directors and the maximum aggregate amounts of fixed and variable compensation of the Executive Committee.
The Articles of Incorporation include the principles of compensation applicable to the Board of Directors and to the Executive Committee. Those provisions can be found online and include
- Principles of compensation of the Board of Directors (Article 23);
- Principles of compensation of the Executive Committee (Article 24);
- Binding vote at the AGM (Article 22);
- Additional amount for new members of the Executive Committee (Article 25);
- Credits and loans (Article 28).