Managing compensation

5 min.

Nomination and Compensation Committee (NCC)

At the AGM 2020, the shareholders approved the BoD’s proposal to merge the Nomination Committee and the Compensation Committee to establish a Nomination and Compensation Committee (NCC). This supported the view of the BoD that personnel and compensation decisions are preferably prepared by one and the same committee, especially in connection with members of the BoD and the EC.

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 NCC.

The NCC consists of three BoD members who are elected annually and individually by the AGM for a period of one year. At the AGM 2020, the shareholders elected Hans Hess (Chair), Stephanie Brecht-Bergen, and John Heppner as members of the NCC.

The NCC’s main compensation tasks are:

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

Annual process and responsibilities in the compensation matters of the BoD and EC

 

 

Aug

 

Oct

 

Dec

 

Feb

 

June

Compensation policy review and compensation principles for next financial year

 

 

 

 

 

 

 

NCC BoD

 

 

Compensation planning and share award plan design

 

 

 

 

 

 

 

NCC BoD

 

NCC BoD

Compensation Report

 

NCC BoD

 

AGM

 

 

 

 

 

NCC

Maximum aggregate compensation amounts of the BoD and EC for next compensation period

 

NCC BoD

 

AGM

 

 

 

 

 

 

Compensation structure and level of BoD for next compensation period

 

NCC BoD

 

 

 

 

 

 

 

NCC BoD

Individual target compensation of EC members for next financial year*

 

 

 

 

 

 

 

 

 

CEO NCC

Individual short-term incentive payments of EC members for previous financial year*

 

CEO NCC

 

 

 

 

 

 

 

 

Individual share awards of EC members and Senior Management*

 

CEO NCC

 

 

 

 

 

 

 

CEO NCC

Review of external stakeholder feedback on compensation disclosure and [discussion of] changes for next disclosure

 

 

 

NCC

 

NCC

 

NCC

 

 

CC meeting schedule and agenda for next period of office

 

 

 

 

 

NCC

 

 

 

 

red: recommending body 

blue: reviewing body 

gray: approving body 

*Proposals related to the CEO compensation are prepared by the NCC Chair and approved by the NCC.

The NCC meets as often as business requires but at least once a year. Number of meetings held and attendance details, incl. participation of members of executive management and external advisors, are provided in the Corporate Governance Report.

The NCC 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 NCC 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 on 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:

Basic principles of compensationCompensation architecture Board of Directors (BoD)

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