5.1 Remuneration governance framework
Nomination and Compensation Committee
The Nomination and Compensation Committee generally consists of three members of the Board of Directors who are elected individually each year by the Annual General Meeting. The Nomination and Compensation Committee appoints its chairman.
At the end of 2023, the members of the Nomination and Compensation Committee were: Hanspeter Fässler (Chairman), Jens Breu (public shareholders‘ representative) and Claude R. Cornaz. In 2023 the Nomination and Compensation Committee met for three meetings with all members present.
Meeting attendance 2023
| Hanspeter Fässler | 3/3 |
| Jens Breu | 3/3 |
| Claude Cornaz | 3/3 |
Responsibilities of the Nomination and Compensation Committee:
Basic human resource matters (e.g. talent management, succession planning, etc.) of the Datwyler Group.
Nominations to the Board of Directors and Executive Management taking into account the gender guidelines under Swiss law.
Preparation of the maximum compensation amounts to the Board of Directors and Executive Management to be submitted to shareholders' vote at the Annual General Meeting.
Determination of remuneration for members of the Board of Directors within the parameters of the maximum amount approved by the Annual General Meeting and in compliance with Art. 21b of the Articles of Association.
Employment terms for members of the Executive Management.
Determination of performance-based remuneration for members of the Executive Management within the parameters of the maximum amount approved by the Annual General Meeting and in compliance with Art. 21c of the Articles of Association.
Monitoring of structure and development of remuneration.
Oversight of compliance by the members of the Board of Directors and Executive Management with the provisions of the Articles of Association concerning the number of mandates in top management and supervisory bodies of legal entities outside the Datwyler Group (Art. 14 section 5 and Art. 19 section 3 of the Articles of Association) including any necessary measures.
Compliance with regulations concerning the disclosure of remuneration of members of the Board of Directors and Executive Management.
Preparation of the remuneration report.
The Nomination and Compensation Committee has written terms of reference setting out its responsibilities. The Committee generally prepares the groundwork for proposals and decision-making by the full Board. It has executive authority only within the remuneration framework already approved in principle by the Annual General Meeting or Board of Directors and where expressly provided in the Articles of Association or a policy. It meets upon invitation of its Chairman as often as necessary, but at least once a year. The Chairman and the CEO attend the meetings by invitation and in an advisory capacity, and the HR officer of the Group takes the minutes.
At the agenda points, where his own performance and remuneration are being discussed, the CEO does not attend. The members of the Committee receive documentation before meetings to enable them to prepare for the individual agenda items. At least two members must be present to adopt decisions. The committees pass resolutions by an absolute majority of the votes cast. In the event of a tie, the Chairman casts the deciding vote. The Nomination and Compensation Committee keeps a record of its decisions and recommendations in minutes submitted to the full Board of Directors and reports the results of its activities at the next Board meeting.
Approval levels
Proposal |
Review |
Approval |
|
|---|---|---|---|
Remuneration principles (Articles of Association) |
Nomination and Compensation Committee |
Board of Directors | Annual General Meeting (binding vote) |
Remuneration models for the Board of Directors and Executive Management |
Nomination and Compensation Committee | Board of Directors | |
Remuneration Report |
Nomination and Compensation Committee | Board of Directors | Annual General Meeting (consultative vote) |
Maximum aggregate amount of remuneration for Board of Directors |
Nomination and Compensation Committee | Board of Directors | Annual General Meeting (binding vote) |
Individual remuneration of Board of Directors members |
Nomination and Compensation Committee | Board of Directors | |
Maximum aggregate amount of remuneration for Executive Management |
Nomination and Compensation Committee | Board of Directors | Annual General Meeting (binding vote) |
Remuneration CEO |
Nomination and Compensation Committee | Board of Directors | |
Individual remuneration other members of Executive Management |
CEO | Nomination and Compensation Committee | Board of Directors |
Determination procedure for the remuneration system
The remuneration system is normally reviewed every three years by the Nomination and Compensation Committee and may be adjusted to reflect the evolving business environment.
The Datwyler Group's remuneration policy is compared against common standards for similar positions at comparable companies. The process for determining the elements and levels of remuneration for the Board of Directors and Executive Management is based on a periodic benchmarking analysis on the basis of remuneration surveys and of remuneration disclosures published by comparable companies in their annual reports.
Comparable companies are defined as international industrial companies listed on the SIX Swiss Exchange with similar geographic scope, revenue, complexity, capitalisation and employee headcount. They include: ALSO, Belimo, Bucher Industries, DKSH, Dormakaba, Emmi, Forbo, Galenica, Georg Fischer, Idorsia, Landis+Gyr, OC Oerlikon, SFS Group, Sigfried, Sulzer, Tecan and VAT Group.
The Annual General Meeting approves the proposals of the Board of Directors concerning the maximum aggregate amount for remuneration of the Board of Directors each year for the period up to the next ordinary Annual General Meeting pursuant to Art. 21b of the Articles of Association, and of remuneration for the Executive Management for the following fiscal year pursuant to Art. 21c of the Articles of Association.
The amount of remuneration for members of the Board of Directors is based on service on the individual committees. It is determined annually by the Nomination and Compensation Committee within the parameters of the maximum amount approved by the Annual General Meeting and in compliance with Art. 21b of the Articles of Association. The Board of Directors approves the result. Members of the Board of Directors have a right to be consulted at these meetings of the Board of Directors.
The effective performance-based remuneration of members of the Executive Management is determined annually by the Nomination and Compensation Committee within the parameters of the maximum amount approved by the Annual General Meeting and in compliance with Art. 21c of the Articles of Association. The Board of Directors approves the result.
Under Art. 21a section 5 of the Articles of Association, the company is authorised to pay an additional amount of up to 50% of the applicable aggregate amount of the applicable maximum total remuneration of the Executive Management to members of the Executive Management who join the Executive Management or assume additional duties during a period for which Executive Management remuneration has already been approved in the event that the approved maximum aggregate amount of remuneration is insufficient for this period.
The Remuneration Report is submitted to the Annual General Meeting for approval in an consultative vote.
Remuneration philosophy and principles
The remuneration philosophy, as set forth in the Articles of Association, is aligned with the business strategy of sustainable, profitable growth and aims to promote and support the four core values of the Datwyler Group:
We are entrepreneurs.
We excel at what we do.
We bring value to our customers.
We have respect for others.
The framework for implementing these remuneration principles is set forth in the Articles of Association.
Pay for performance
The variable incentive plan for Executive Management rewards the collective performance of the company.Sustainability performance as a remuneration criterion
By considering sustainability performance for the calculation of the variable incentive, Datwyler promotes responsible behavior.Reward long-term value creation
Part of the remuneration is paid in the form of blocked shares for the Board of Directors and in the form of performance share units for the Executive Management in order to encourage a long-term view and to create alignment with the interests of the shareholders. Furthermore, the variable incentive plan for Executive Management has no excessive leverage and therefore does not encourage inappropriate risk-taking.Market competitiveness
Remuneration levels are in line with competitive market practice and are designed to attract, retain and develop the best talent.Fairness and transparency
Remuneration programmes are straightforward, transparent and fair.
5.2 Remuneration structure of the Board of Directors
The remuneration of members of the Board of Directors is determined based on the responsibility and time requirements of their function and includes a base fee for Board membership and additional fees for special functions such as committee chairmanship and membership. The additional fees are cumulative in the case of multiple functions.
Members of the Board of Directors receive their remuneration in the form of a fixed fee in cash and a grant of bearer shares of Dätwyler Holding Inc., blocked for five years. The number of bearer shares granted is calculated from the fixed amount and the average price on 20 trading days prior to the grant date. In the event of death or disability of a Board member, the shares may be subject to early un-blocking if the participant or their beneficiaries so choose. They remain blocked in all other instances.
Remuneration model for
members of the Board of Directors
| Cash (CHF) |
Blocked shares (CHF) |
|
|---|---|---|
Base fee |
||
For Board membership |
30'000 | 150'000 |
Additional fee |
||
For special functions |
||
Board chairmanship |
100'000 | 180'000 |
Board vice-chairmanship |
50'000 | |
Committee chairmanship |
40'000 | |
Committee membership |
20'000 |
The elements and levels of remuneration for the Board of Directors is based on benchmarking analysis with a group of comparable international industrial companies listed on the SIX Swiss Exchange with similar geographic scope, revenue, complexity, capitalisation and employee headcount. They include: ALSO, Belimo, Bucher Industries, DKSH, Dormakaba, Emmi, Forbo, Galenica, Georg Fischer, Idorsia, Landis+Gyr, OC Oerlikon, SFS Group, Sigfried, Sulzer, Tecan and VAT Group.
Board members may receive additional compensation for assuming special duties, as well as for participation in meetings of a temporary additional committee (other than the Audit Committee and the Nomination and Compensation Committee). Both the special duty and the additional committee and the corresponding compensation must be determined in advance by the Board of Directors.
Fees are paid and shares allocated in June for the current year of Board service. They are subject to regular social security contributions but are not pensionable. Members of the Board of Directors receive no additional reimbursement of business expenses beyond actual expenditures for business travel.
5.3 Remuneration structure of the Executive Management
The remuneration of Executive Management members is determined based on the scope and responsibilities of their position and consists of a fixed base salary, a variable incentive, a long-term incentive plan with performance share units and benefits such as retirement pension, insurance and perquisites.
Remuneration model for
the Executive Management
Instrument |
Purpose |
|
|---|---|---|
Fixed base salary |
Monthly cash payments | To compensate for performance of duties and for qualifications required to perform the role |
Variable incentive |
Annual cash payment | To reward collective business performance in the reporting year (revenue, profit and sustainability criteria) |
Long-term incentive plan |
Annual granting of performance share units with a vesting period of three years | To drive sustainable results and create long-term alignment with shareholders' interests |
Employer social insurance contributions and perquisites |
Retirement pension, insurance and perquisites | To protect against risks and reimburse business expenses |
Fixed base salary
The amount of the fixed base salary depends on the scope of the position, the qualifications and experience required to perform the role together with the market environment. The objective is to pay fixed salaries in line with those offered by comparable companies for similar positions.
Variable incentive
The variable incentive plan rewards the collective performance of the company over a time horizon of one year. The variable incentive is capped at 180% of the annual fixed base salary for the CEO and individually between 50% to 100% for the other members of the Executive Management.
In alignment with the overall strategy of sustainable profitable growth, the variable incentive will be measured on the basis of three performance indicators with different weightings:
Net revenue growth compared to previous year, relative to a peer group of companies (weighting 40%);
EBIT improvement (earnings before interest and tax) compared to previous year, relative to the same peer group of companies (weighting 40%);
Sustainability measurement parameters (weighting 20%).
The comparison of the two performance indicators net revenue growth and EBIT improvement with the performance of similar companies is performed by an independent consulting firm. The peer group includes industrial firms that have a comparable base of products, technology, customers, suppliers or investors and thus are exposed to similar market cycles as Datwyler. It is identical for all members of the Executive Management.
The intention of measuring the performance relatively to peer companies is to neutralise the effect of market cycles and external factors that impact the company's performance but are outside of the control of management. The external market cycles being neutralised, the true performance of the company can be better assessed.
The performance indicators net revenue growth and EBIT improvement together determine 80% of the variable incentive. To achieve the target amount of a 100% payout for these two performance indicators, the median performance of the peer group must be reached for both indicators.
The maximum payout of 200% can only be achieved if Datwyler achieves the best ranking among all peer companies on both net revenue growth and EBIT improvement. Should Datwyler perform below all peer companies on both indicators, there is no payout for these two performance indicators. The payout percentage for any point between the lowest ranking (0% payout), the median (100%) and the best ranking (200%) is determined by linear interpolation.
The sustainability performance indicator determines 20% of the variable incentive. The measurement parameters for the sustainability performance indicator are derived from the 12 focus topics of the sustainability strategy. They can be redefined and weighted by the Board of Directors annually.
For all three parameters, there is a minimum threshold that has to be achieved in order to be taken into consideration and a maximum limit above which the contribution to target achievement no longer increases. The three measurement parameters for the sustainability performance indicator cannot be compared with the companies from the peer group. By taking sustainability measurement parameters into account in the variable incentive for all eligible employees, Datwyler is promoting awareness of the sustainability focus areas.
Overview of the performance indicators and their weighting for calculating the variable incentive
Target values in % of annual fixed base salary |
CEO |
COO, CFO, CTO, CSO |
|---|---|---|
Net sales growth relative to peers |
36 % |
10 % – 20 % |
EBIT improvement relative to peers |
36 % |
10 % – 20 % |
Sustainability measurement parameters |
18 % |
5 % – 10 % |
Total (at target) |
90 % | 25 % – 50 % |
Total (at maximum) |
180 % | 50 % – 100 % |
Peer group of companies to measure the collective performance
The Board of Directors may decide to adjust both performance indicators to reflect currency effects, extraordinary effects such as one-time costs or sale of real estate and structural changes such as acquisitions or divestments affecting net sales by more than 10% of the previous year figure. In case of a negative net result, the Board of Directors reserves the right to deviate from the above-mentioned calculation approach.
The model for calculating the variable incentive with three collective performance indicators including sustainability measurement parameters and a uniform peer group applies to all employees of the company who are entitled to a variable incentive. In this way, Datwyler promotes agile collaboration across hierarchical levels and departments and accelerates the implementation of customer requests and development projects. In addition, Datwyler uses the concept of Objectives and Key Results (OKR) to focus the activities of all employees on a clearly defined number of key corporate objectives.
Peer group:
Aluflexpack
Amcor
Amgen
Amphenol
Aptargroup (Food & Beverages)
Aptargroup (Pharma)
Aptiv
Atrion Corp.
Becton Dickinson & Company (Life Sciences)
Becton Dickinson & Company (Medical)
Bridgestone Corporation
Carlisle (Interconnect Technologies)
Continental (ContiTech)
Gerresheimer
Hexpol AB
Hirose Electric
Johnson Control
Nipro Corporation
Parker-Hannifin (Diversified Industrial)
Sanofi
Stoneridge
TE Connectivity
Trelleborg
Valeo
Vitesco Technologies
West Pharmaceutical
ZF Friedrichshafen
Long-term incentive plan
With the 2018 financial year, Datwyler replaced the previous share participation for the Executive Management with a long-term incentive plan. This measures performance relative to comparable peer companies. This is intended to neutralise the effect of market cycles and external factors that impact the company's performance but are outside of the control of management. The external market cycles being neutralised, the true performance of the company can be better assessed.
Share-based remuneration will be awarded under a long- term incentive plan in future in the form of performance share units (PSUs). A PSU is a conditional right to receive shares of the company subject to the fulfilment of certain conditions during a three-year vesting period. The vesting conditions will include both the achievement of predetermined performance objectives (performance conditions) and continuous employment at the end of the vesting period (service condition).
As a basis for the allocation of PSUs, a target amount for the long-term incentive plan was determined for each member of the Executive Management. This target amount is based on the relevant compensation benchmarks.
At grant date (1 January), the target incentive amount will be converted to a number of PSUs on the basis of the average closing share price during the twenty trading days before the grant date. The PSUs will be subject to a three-year vesting period, conditional on continued service within the company and on the following performance targets being achieved:
Relative net sales growth, with one-third weight
Relative ROCE growth, with one-third weight
Relative total shareholder return (TSR), with one-third weight
Datwyler's performance on all three indicators is compared annually with a peer group of companies. The peer group is a consolidation of the peer companies that are already considered for the calculation of the annual variable incentive.
Peer group
The peer group is confirmed by the Board of Directors prior to the annual grant of PSUs and may be adjusted if required.
The peer group consists of the following companies:
Aluflexpack
Amcor
Amgen
Amphenol
Aptargroup
Aptiv
Atrion Corp.
Becton Dickinson & Company
Bridgestone Corporation
Carlisle
Continental
Gerresheimer
Hexpol AB
Hirose
Johnson Control
Nipro Corporation
Parker-Hannifin
Sanofi
Stoneridge
TE Connectivity
Trelleborg
Valeo
Vitesco Technologies
West Pharmaceutical
ZF Friedrichshafen
Reward for long-term performance
With the long-term incentive plan, a significant portion of Executive Management compensation is linked to the company's long-term performance. This strengthens the alignment to shareholders' interests. Datwyler's relative performance will be expressed as a percentile rank, which determines a payout factor between 0% and 200%:
Ranking < 25% of the peer group (threshold): 0% payout
Ranking at the median of the peer group: 100% payout
Ranking > 75% of the peer group (cap): 200% payout
Linear interpolation between those points
The combined payout factor is a weighted average of the payout factors for relative sales growth (one-third weight), relative ROCE growth (one-third weight) and relative TSR (one-third weight) over the three-year vesting period. An independent external specialist will calculate the level of relative performance achievement and the combined payout factor.
If Datwyler reports a negative profit after tax (i.e. a loss) from continuous operations during the last year of the three-year vesting period, or if the Board of Directors believes that an adequate dividend cannot be paid out to shareholders, the Board of Directors reserves the right to determine whether and to what extent the PSUs for this period should be forfeited, irrespective of the combined payout factor achieved.
In the case of someone leaving, the PSUs are usually forfeited, except in the case of retirement, death, disability or change of control of the company where they are converted into shares for the number of months up to the time of leaving based on the payout factor achieved (pro-rata vesting).
In the event of death, the pro-rata payout is made at the time of leaving (accelerated vesting). It follows the regular vesting schedule in the other cases.
If Datwyler is required to prepare an accounting/financial restatement, clawback and malus provisions will apply to PSUs or shares awarded under the long-term incentive plan. Datwyler shall have the right to forfeit (malus provision) and/or or to obtain reimbursement (clawback provision) of any PSU or shares that were granted or allocated to the participant in the case that fraud or misconduct by the participant has led to the booking correction.
The total number of shares transferred to the participant after the vesting period will be calculated as follows:
Employer social insurance contributions
Members of the Executive Management belong to the regular social security and pension plans of the respective countries in which their employment contracts were concluded. The social and pension benefits are mainly paid into state social insurance plans, pension plans and health and accident insurance plans. The purpose is to provide employees or their dependents with adequate benefits in the event of retirement, disability, death, accident or illness.
Members of the Executive Management with a Swiss employment contract participate in the regular employee pension plan provided by Datwyler to all employees in Switzerland. The pension plan consists of a basic plan covering annual earnings up to the sixfold of the maximal retirement pension of the Swiss Governmental Old-Age, Survivors' and Disability Insurance (AHV) and a supplementary plan in which earnings in excess of this limit are insured up to a maximum of the tenfold of the upper limiting amount according to the Swiss Federal Law on Occupational Retirement, Survivors and Disability Pension Plans (BVG). The benefits provided under the pension fund exceed the legal requirements of the Swiss Federal Law on Occupational Retirement, Survivors and Disability Pension Plans (BVG) and are in line with typical market practice of other industrial companies in Switzerland.
Perquisites
Members of the Executive Management do not receive any particular executive benefits. They are entitled to a company car and a fiscally approved entertainment allowance, in accordance with the expense rules applicable to all employees at management levels. Since representation allowance represent a reimbursement of expenses, they are not included in the remuneration tables.
Employment contracts
Employment contracts with members of the Executive Management stipulate a notice period of 6 to 12 months and of 12 months for the CEO. They contain neither a severance provision in the event of termination of employment, nor any change of control clauses.
The employment contracts of Executive Management members contain a clawback clause allowing the company, where necessary under applicable Swiss law and the Articles of Association, to recover remuneration already paid, insofar as and to the extent that such remuneration was paid before approval by the Annual General Meeting and the next Annual General Meeting fails to approve the proposals of the Board of Directors.
5.4 Remuneration in the reporting year 2023
The remuneration to current and former members of the Board of Directors and Executive Management and persons connected with them are presented below. Explanations are available after the tables. Tables 1 to 4 have been audited by the statutory auditors.
Remuneration Board of Directors in 2023 (term)
Table 1, in CHF
Name |
Function |
Fixed base salary, gross |
Share participation2 Number |
Share participation2 Fair value |
Employer social insurance contributions | Total remuneration |
|---|---|---|---|---|---|---|
Paul Hälg1 |
Chairman |
130'000 | 1'487 |
330'203 |
26'543 |
486'746 |
Hanspeter Fässler |
Vice Chairman |
70'000 | 901 |
200'076 |
14'941 |
285'017 |
Jens Breu |
Director |
50'000 | 676 |
150'113 |
13'588 |
213'701 |
Claude R. Cornaz |
Director |
50'000 | 676 |
150'113 |
13'588 |
213'701 |
Jürg Fedier |
Director |
70'000 |
676 |
150'113 |
12'196 |
232'309 |
Martin Hirzel |
Director |
50'000 | 676 |
150'113 |
13'588 |
213'701 |
Gabi Huber |
Director |
50'000 | 676 |
150'113 |
10'711 |
210'824 |
Judith van Walsum |
Director |
50'000 | 676 |
150'113 |
13'588 |
213'701 |
Total for Directors |
520'000 |
6'444 |
1'430'957 |
118'744 |
2'069'701 |
Highest remuneration
The shares were granted on 1 June 2023. The reported market value corresponds to the average share price of CHF 222.06 in the time frame from 17 April to 15 May 2023.
Remuneration Board of Directors in 2022 (term)
Table 2, in CHF
Name |
Function |
Fixed base salary, gross |
Share participation2 Number |
Share participation2 Fair value |
Employer social insurance contributions | Total remuneration |
|---|---|---|---|---|---|---|
Paul Hälg1 |
Chairman |
130'000 | 1'092 |
330'194 |
22'360 |
482'554 |
Hanspeter Fässler |
Vice Chairman |
70'000 | 662 |
200'172 |
12'410 |
282'582 |
Jens Breu |
Director |
50'000 | 497 |
150'280 |
11'555 |
211'835 |
Claude R. Cornaz |
Director |
50'000 | 497 |
150'280 |
11'555 |
211'835 |
Jürg Fedier |
Director |
70'000 | 497 |
150'280 |
10'301 |
230'581 |
Martin Hirzel |
Director |
50'000 |
497 |
150'280 |
11'555 |
211'835 |
Gabi Huber |
Director |
50'000 | 497 |
150'280 |
8'817 |
209'097 |
Judith van Walsum |
Director |
30'000 |
497 |
150'280 |
9'851 |
190'131 |
Total for Directors |
500'000 | 4'736 |
1'432'046 |
98'406 |
2'030'452 |
Highest remuneration
The shares were granted on 1 June 2022. The reported market value corresponds to the average share price of CHF 302.38 in the time frame from 19 April to 16 May 2022.
The fixed base salary of the Board of Directors remained unchanged compared to the previous year. The fixed base salary of the individual Directors depends on their membership in the two committees (see also Structure of remuneration of the Board of Directors).
The share participation for the members of the Board of Directors for the year 2023 was determined by the Nomination and Compensation Committee and approved by the Board of Directors in accordance with the maximum aggregate amount approved by the Annual General Meeting and Art. 21b of the Articles of Association.
The grant of Datwyler bearer shares as of 1 June 2023 was based on a fixed amount and the average share price of CHF 222.06 in the time frame from 17 April to 15 May 2023. Due to the significantly lower share price compared to the previous year, the number of shares granted increased in the reporting year. The granted shares are blocked for a period of five years.
Remuneration Executive Management in 2023
Table 3, in CHF
Name |
Function |
Fixed base salary, gross |
Variable incentive, gross3 |
Performance Share Units4 Number |
Performance Share Units4 Grant value |
Employer social insurance contributions | Perquisites |
Total remuneration |
|---|---|---|---|---|---|---|---|---|
Dirk Lambrecht1 |
CEO | 655'000 | 554'850 |
3'475 |
650'103 |
368'644 |
10'690 |
2'239'287 |
Total for Executive Management2 |
1'760'421 |
921'521 |
6'336 |
1'185'339 |
953'188 |
83'922 |
4'904'391 |
Highest remuneration
In the reporting year 2023, the Executive Management comprised five members.
First estimate at the time of publication of the annual report.
The performance share units of the long-term incentive plan were granted on 1 January 2023 based on the Datwyler bearer share price of CHF 187.08 (average closing price 20 trading days prior to the grant date).
Remuneration Executive Management in 2022
Table 4, in CHF
Name |
Function |
Fixed base salary, gross |
Variable incentive, gross3 |
Performance Share Units4 Number |
Performance Share Units4 Grant value |
Employer social insurance contributions | Perquisites |
Total remuneration |
|---|---|---|---|---|---|---|---|---|
Dirk Lambrecht1 |
CEO | 655'000 | 620'446 |
1'680 |
650'244 |
368'456 |
10'440 |
2'304'586 |
Total for Executive Management2 |
1'538'726 |
957'143 |
2'894 |
1'120'058 |
836'041 |
50'588 |
4'502'556 |
Highest remuneration
One member was appointed to the Executive Management on 1 November 2022. As of 31 December 2022, the Executive Management comprised five members.
The variable incentives paid to the Executive Management in 2023 reporting year and relating to the 2022 fiscal year were in total CHF 386'509 higher than the estimate published in the 2022 Annual Report, with the degree of target achievement being higher than expected. The social insurance contributions have also been adjusted accordingly.
The performance share units of the long-term incentive plan were granted on 1 January 2022 based on the Datwyler bearer share price of CHF 387.05 (average closing price 20 trading days prior to the grant date).
Remuneration of the Executive Management
The fixed base salary of the five members of the Executive Management amounted to CHF 1'760'421 in the year under review. This is 14.4% more than in the previous year, in which the Executive Management consisted of four members only for ten months. The Executive Management’s variable incentive for the 2023 reporting year was calculated according to the model described in detail under Variable incentive.
This involved comparing net revenue growth and EBIT improvement with a peer group of similar companies. Based on the available revenue and earnings figures for the first nine months of the year under review, Datwyler has made best estimates for calculating the variable incentive. The company expects to outperform its peer group by 58.6% in net revenue growth and 24.9% in EBIT improvement for the full year. In the model with a target value of 100% and a maximum payout factor of 200% per performance indicator, these values correspond to a payout factor of 117.2% for net revenue growth and a payout factor of 49.8% for EBIT improvement.
For the sustainability performance indicator, the Board of Directors had defined the following three measurement parameters for the year 2023: Reduction of CO2 emissions (Scope 1 and 2) in relation to revenue, reduction of accident severity, and customer satisfaction. These measurement parameters cannot be compared with the companies in the peer group. However, they are also estimates based on nine-month figures as at the end of September 2023. In terms of CO2 emissions, Datwyler is expected to achieve a reduction of 8 tons per million revenue compared to the previous year. With a maximum and minimum value of -16 and 0 tons per million revenue respectively, this results in a payout factor of 100% . Acquisition- and currency-adjusted values are used for the calculation.
For the accident severity rate, Datwyler is expected to achieve a value of 0.14. With a defined maximum and minimum value of 0 and 0.33 respectively, this results in a payout factor of 116%. To evaluate customer satisfaction, Datwyler conducted a survey in the fourth quarter of 2023. The values from this customer survey are used to calculate the actual variable salary component to be paid out. For the best estimate of the variable salary component in this annual report, the customer satisfaction from the last survey was used. The value of the Net Promoter Score at that time was 57. With a defined maximum and minimum value for the Net Promoter Score of 70 and 32.5 respectively, this results in a payout factor of 148%.
Taking into account the weighting of the three performance indicators (net revenue growth (40%), EBIT improvement (40%) and sustainability (20%)), the aggregate provisional payout factor amounts to 90%). Accordingly, the provisional figure for the Executive Management’s variable incentive amounts to CHF 921'521. Compared to the previous year, this corresponds to a slight decrease of 3.7%.
An external, independent specialist calculated the provisional figures for net revenue growth and EBIT improvement relative to peer groups of similar companies.
Based on the annual reports published by peer companies, the same specialist will ascertain the definitive figures in April 2024 before the date on which the variable incentive is paid out. The actual variable incentive paid out will be published in next year’s Remuneration Report.
Under the long-term incentive plan, 6'336 performance share units (PSUs) worth CHF 1'185'339 were granted to the members of the Executive Management on 1 January 2023. This was based on the average closing price of the Datwyler bearer share of CHF 187.08 over the 20 trading days prior to the grant date. The larger group of participants and the significantly lower share price compared to the previous year resulted in a significantly higher number of PSUs allocated in the reporting year.
The heading “Employer social insurance contributions” includes all employer expenditures for pension plans and social security contributions. Perquisites reflect the employer’s contribution to private use of business vehicles and child allowances.
The total remuneration of the Board of Directors and the Executive Management is below the maximum total remuneration figures of CHF 2.1 million and CHF 7.0 million respectively, which the shareholders approved for the 2023 fiscal year at the 2022 and 2023 Annual General Meetings.
Long-term incentive plans
Includes members of Executive Management as of 31 December 2023
Plan |
Participants |
Grant date PSU |
Performance period |
Vesting date PSU |
Number of PSU granted |
Value of PSU at grant date in CHF |
Vesting level in % of grant |
Number of shares (vesting) |
Value of shares at vesting date in CHF |
|---|---|---|---|---|---|---|---|---|---|
LTIP 2020 |
(Exec Management incl. CEO) |
01.01.2020 |
2020–2022 |
31.12.2022 |
6'234 |
1'115'387 |
164% |
10'625 |
2'122'875 |
LTIP 2021 |
(Exec Management incl. CEO) |
01.01.2021 |
2021–2023 |
31.12.2023 |
4'523 |
1'115'598 |
To be determined |
To be determined |
To be determined |
LTIP 2022 |
(Exec Management incl. CEO) |
01.01.2022 |
2022–2024 |
31.12.2024 |
2'948 |
1'141'023 |
To be determined |
To be determined |
To be determined |
LTIP 2023 |
(Exec Management incl. CEO) |
01.01.2023 |
2023–2025 |
31.12.2025 |
6'336 |
1'185'339 |
To be determined |
To be determined |
To be determined |
The number of shares awarded in spring 2023 for the long-term incentive plan 2020-2022 was calculated according to the model described in detail under Long-term incentive plan.
In the 2020-2022 performance period, Datwyler achieved the following results for the three performance conditions compared to the peer group:
Relative net revenue growth: 79.1% of peer group companies outperformed
Relative ROCE growth: 45.3% of peer group companies outperformed
Relative total shareholder return: 71.5% of peer group companies outperformed
Based on these results, the payout factor was 164%. The members of the Executive Management serving as of 31 December 2023 were allocated a total of 6'234 performance share units (PSUs) with a value of CHF 1'115'387 as of 1 January 2020. The payout factor increased the originally granted PSUs to 10'625 shares with a value of CHF 2'122'875 as of the vesting date of 31 December 2022.
As only the nine-month figures of the companies of the peer group are available at the time of publication of the annual report, the share allocation from the long-term incentive plan is reported in the following year. In this way, estimates can be avoided. The PSUs from the long-term incentive plan are recognised as remuneration and reported in the year in which they were originally allocated.
Remuneration of former members of the Board of Directors and Executive Management
In the year under review, one former member of the Executive Management who is now retired received 816 shares worth CHF 163'037 from the long-term incentive plan 2020-2022. No further remuneration was paid to former members of the Board of Directors or the Executive Management in the year under review, nor was any non-arm’s length remuneration paid to persons connected with current or former members of the Board of Directors or Executive Management.
Loans and credits
No loans and/or credits were granted to current or former members of the Board and Executive Management or related parties.
Shareholdings of the Board of Directors and Executive Management
At the end of 2023, the Directors held a total of 80'671 Datwyler bearer shares and the Executive Management members held 27'780 Datwyler bearer shares. The shareholdings of Directors and Executive Management are detailed in the financial statements of Dätwyler Holding Inc. in accordance with Article 734d of the Swiss Code of Obligations (Financial Report 2023, page F49, note 2.16).
Functions of the members of the Board of Directors and Executive Management in other companies
The functions of the members of the Board of Directors and of Executive Management in other companies with a commercial purpose in accordance with Article 734e of the Swiss Code of Obligations are listed below.
Functions of the members of the Board of Directors in other companies
As of 31 December 2023
Dr. Paul Hälg |
||
|---|---|---|
Director Delegate |
Aranos AG |
|
Director |
Dätwyler IT Infra AG |
|
Chairman |
Sika AG |
stock listed |
Director |
Sonceboz Automotive SA |
|
Dr. Hanspeter Fässler |
||
Chairman |
ANYbotics AG |
|
Vice Chairman |
Axpo Holding AG |
|
Chairman |
Dätwyler IT Infra AG |
|
Chairman |
Drone Harmony AG |
|
Chairman |
Gravis Robotics AG |
|
Director |
Hatebur Umformmaschinen AG |
|
Director |
So Real Digital Twins AG |
|
Jens Breu |
||
CEO |
SFS Group AG |
stock listed |
Claude R. Cornaz |
||
Vice Chairman |
Cornaz AG-Holding |
|
Vice Chairman |
H. Goessler AG |
|
Chairman |
Vetropack Holding AG |
stock listed |
Jürg Fedier |
||
Director |
Ascom Holding AG |
stock listed |
Director |
OC Oerlikon Corporation AG |
stock listed |
Martin Hirzel |
||
Director |
Bucher Industries AG |
stock listed |
Director |
IPZ Property AG |
|
Director |
Lantal Textiles AG |
|
Director |
Ronal AG |
|
Director |
Testex AG |
|
Dr. Gabi Huber |
||
Vice Chairman |
UBS Switzerland AG |
|
Director |
Credit Suisse (Schweiz) AG |
|
Dr. Judith van Walsum |
||
CFO |
Roche Diabetes Care GmbH |
CEO = Chief Executive Officer
CFO = Chef Financial Officer
Functions of the members of the Executive Management in other companies
As of 31 December 2023
Dirk Lambrecht |
Director |
Dätwyler IT Infra AG |
|---|---|---|
Walter Scherz |
Chairman |
Comed AG |
Dirk Borghs |
Director |
Target Foods NV |
Sabrina Gérard |
Chairwomen |
Mentor Management Consulting BV |
Dr. Frank Schön |
– |
– |
5.5 Remuneration outlook
The Board of Directors will propose the following maximum total sums to the 2024 ordinary Annual General Meeting for remuneration of the Board of Directors for their service during the period up to the 2025 ordinary Annual General Meeting and for remuneration of the Executive Management for the 2025 fiscal year:
Board of Directors: CHF 2'350'000, of which CHF 650'000 for cash remuneration plus CHF 1'700'000 for granting of Dätwyler Holding Inc. bearer shares.
Executive Management: CHF 6'300'000, of which CHF 4'500'000 for cash remuneration (fixed base salary CHF 1'850'000, variable incentive CHF 1'700'000, employer social insurance and perquisites CHF 950'000) plus CHF 1'800'000 for the maximum value at grant of the Performance Share Units awarded under the new long-term incentive plan.
For the sustainability performance indicator, which accounts for 20% of the variable salary component, the Board of Directors has defined the following three measurement parameters for the year 2024:
Reduction in CO2 emissions (scopes 1 and 2) relative to revenue (10% of variable incentive component)
Reduction in accident severity (5% of the variable incentive component)
Employee satisfaction (5% of the variable incentive component)
For all three parameters, there is a minimum threshold that has to be achieved in order to be taken into consideration and a maximum limit above which the contribution to target achievement no longer increases. The three measurement parameters for the sustainability performance indicator are not compared with the companies from the peer group. By taking sustainability measurement parameters into account in the variable incentive for all eligible employees, Datwyler is promoting awareness of the sustainability focus areas.
5.6 Report of the statutory auditor on the Remuneration Report
