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 2019, the shareholders elected Rolf Dörig (Chair), Hans Gummert, and Hans Hess as members of the Compensation Committee.

The Compensation Committee’s main tasks are:

• 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 in 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 2019/20, the Compensation Committee held four meetings of approximately one to two hours each. Meeting attendance details, incl. participation of members of executive management and external advisors, are provided in the Corporate Governance Report.

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 to the BoD members.

The Compensation Committee may decide to consult external advisors on specific compensation matters. 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. This firm does not have any non-Human Resources related mandates 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 AGM 2015, 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 to members of the Board of Directors and Executive Committee (Article 28).