Pay for sustainable performance

Winterthur, February 14, 2019

Dear Shareholder,

I was honored this year to be given the chair of the Nomination and Remuneration Committee of Sulzer, succeeding Thomas Glanzmann who stepped down from the position. We are all grateful to Thomas for his many contributions and dedication to the committee. I was also pleased to welcome Hanne Birgitte Breinbjerg Sørensen as a new committee member.

The committee will continue to ensure that the Sulzer compensation structure reflects best practice standards. The Sulzer compensation policy enables the company to attract, retain and motivate the talents that are key to the company’s performance and long-term success. To that end, our compensation programs have been designed to reward sustainable performance.

During the reporting year, the Board of Directors and the Nomination and Remuneration Committee reviewed Sulzer’s compensation policy and programs to ensure that they are aligned with the company’s strategy and shareholders’ interests. We also reviewed our compliance with the regulatory requirements and concluded that no fundamental changes were necessary. Furthermore, the Nomination and Remuneration Committee performed its regular activities throughout the year such as the performance goal setting at the beginning of the year and the performance assessment at year end. We also reviewed the compensation of the members of the Board and of the Executive Committee and oversaw the preparation of the Compensation Report presented to the 2019 Annual General Meeting (AGM).

We appointed Frédéric Lalanne, Chief Commercial and Marketing Officer (CCMO), as President, Pumps Equipment division to build on the many advances achieved in 2018 in our Pumps Equipment division. Frédéric replaced Michael Streicher who stepped down from the Executive Committee to assume his new responsibilities as Global Head, Water Pumps Business.

On the following pages, you will find further information on our activities and on the Sulzer compensation system and governance. This Compensation Report will be submitted for a non-binding, consultative shareholders’ vote at the AGM in April 2019. Shareholders will also vote on the maximum aggregate compensation amount to the Board for the term from the 2019 AGM to the 2020 AGM and on the maximum aggregate Executive Committee compensation for 2020.

Looking ahead, we are committed to regularly assess and review our compensation programs to ensure that they are effective. We will also continue the open dialogue with you, our shareholders, and your representatives.

Sincerely,

Gerhard Roiss
Chairman of the Nomination and Remuneration Committee