BoD members only receive fixed compensation based on the responsibilities and time requirement of their function, without any entitlement to performance-related compensation. This ensures that the BoD remains independent while exercising its supervisory duties towards the EC. The amount of compensation for each function of the BoD is determined annually considering the market compensation trends and comparisons with other listed Swiss industrial companies which operate internationally.
The NCC regularly reviews the compensation of the BoD as well as the peer group used for compensation benchmarking studies. The most recent peer group revision was conducted in June 2022 based on the following criteria: median market capitalization, annual sales, business model, industry, and compensation practices. The peer group consists of the following eleven companies: Bucher Industries, Clariant, Forbo, Georg Fischer, Landis+Gyr, OC Oerlikon, SFS Group, SIG Combibloc, Stadler Rail, Sulzer, and Tecan.
In consideration of the outcome of the benchmark analysis, the compensation of the BoD Chair was reduced to CHF 635,000 effective from the term of office starting with the AGM 2022. This adjustment brought the BoD Chair compensation within the benchmark range. Compensation for other BoD members remained unchanged since 2020, and no further changes are proposed for the term of office starting with the AGM 2024.
The basic compensation paid to the members of the BoD comprises a cash payment and a grant of restricted shares of dormakaba Holding AG. The BoD Chair receives basic compensation of CHF 635,000, consisting of CHF 335,000 paid in cash and CHF 300,000 in restricted shares. The other members of the BoD receive basic compensation of CHF 190,000, consisting of CHF 100,000 in cash and CHF 90,000 in restricted shares. Additional fees are paid in cash for specific functions such as committee chair and/or committee member of the BoD or for performing special additional tasks assigned by the BoD. No additional committee fees are due to the BoD Chair. In line with Swiss legal requirements, selected BoD members may have to be insured in the company’s pension fund. In such case, both the employee and employer portions of the annual contributions are borne by the respective BoD member, therefore no pension cost is paid by the company.
The compensation system and levels are documented in the BoD compensation directive and are summarized in the table below.
|
Basic Compensation p.a. (in CHF) |
|
|
|
|
|
|
|
BoD Chair |
|
BoD Member |
|
in cash |
|
335,000 |
|
100,000 |
|
in restricted shares |
|
300,000 |
|
90,000 |
|
Total |
|
635,000 |
|
190,000 |
|
|
|
|
|
|
|
+ |
|
|
|
|
|
|
|
|
|
|
|
Additional Compensation p.a. (in CHF) |
|
|
|
|
|
|
|
Committee Chair |
|
Committee Member |
|
Audit Committee |
|
60,000 |
|
20,000 |
|
Nomination and Compensation Committee |
|
60,000 |
|
20,000 |
No additional committee fees are due to the BoD Chair.
The members of the BoD may decide to receive a certain part of the cash payment in the form of restricted shares of the company. The number of shares awarded is calculated using the average closing share price for the last five trading days of the last month of the relevant compensation period. The awarded shares are restricted for a period of three years; this blocking period remains in place if a member leaves the BoD. In addition, a shareholding ownership guideline is in place, requiring Board members to hold a minimum of 500 shares of dormakaba within three years after their first election to the BoD. As per 30 June, all members of the BoD comply with the requirements of the guideline.
Compensation is paid on a pro rata basis to Board members twice a year. For the term of office from the AGM 2023 until the AGM 2024, the first compensation period ended on 30 April 2023, the second will end on 31 October 2024. Actual expenses incurred are reimbursed.