Managing compensation

Compensation Committee

In accordance with the Articles of Incorporation and the Organizational Regulations of dormakaba Holding AG, the BoD is responsible for the principles underlying the compensation policy and for the compensation steering process; it is supported in this work by the Compensation Committee.

The Compensation Committee consists of three BoD members who are elected annually and individually by the AGM for a period of one year. At the AGM 2018, 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 BoD;
• Propose to the BoD the specific design of the fundamental compensation elements and the determination of the compensation-related performance objectives;
• Propose to the BoD the maximum aggregate compensation amount of the BoD and of the EC to be submitted to the shareholders’ vote at the AGM;
• Propose to the BoD 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 EC members within the limits approved by the AGM;
• Decide on the share-based compensation to be awarded to the members of the EC and the Senior Management;
• Propose to the BoD the Compensation Report.

The compensation for the EC and for the Senior Management is set as part of an annual process.

Annual process and responsibilities setting the compensation of the BoD and EC

The Compensation Committee meets as often as business requires but at least once a year. In the financial year 2018/19, the Compensation Committee held four meetings of approximately one to two hours each. All meetings were attended by all members.

The Compensation Committee Chair reports to the BoD after each meeting on the activities of the committee. The minutes of the committee’s meetings are available upon request to the BoD members. As a general rule, the BoD Chair, 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.

Shareholders’ involvement

The BoD values the dialogue with shareholders and wants to know and understand their views on executive compensation. In this context, the BoD has held an annual consultative vote on the Compensation Report from financial year 2012/13 onwards. This vote allows shareholders to express their opinion on the compensation policy and systems applicable to the BoD and the EC. Since the 2015 AGM, the BoD also seeks an annual prospective binding approval from shareholders of the maximum aggregate amount of compensation of the BoD and the maximum aggregate amounts of fixed and variable compensation of the EC.

The Articles of Incorporation include the principles of compensation applicable to the BoD and to the EC. 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).