Dieser Abschnitt ist nur in englischer Sprache verfügbar.

Compensation governance and principles

Compensation policies and plans at Sulzer reward performance, sustainable growth and long-term shareholder value creation. The compensation programs are competitive, internally equitable, straightforward and transparent. The compensation report is prepared in accordance with the Articles 732 et seqq. of the Swiss Code of Obligations (CO), the SIX Swiss Exchange Directive on Information relating to Corporate Governance (RLCG) and the principles of the Swiss Code of Best Practice for Corporate Governance.

Remuneration Committee

The Articles of Association, the Board of Directors and Organization Regulations, and the Remuneration Committee Regulations define the functions of the Remuneration Committee (RC). The RC supports the Board of Directors in establishing and reviewing the compensation strategy and principles, and in preparing the proposals for the Shareholders’ Meeting regarding the compensation of the members of the Board of Directors and of the Executive Committee. 

The RC is responsible for the following activities and submits all proposals concerning these activities to the Board of Directors, which has the final decision‑making authority:

  • Periodic assessment of the compensation policy and programs
  • Determination of performance targets for the CEO and the other Executive Committee positions for the purpose of the incentive plans
  • Preparation of the proposals for the Shareholders’ Meeting on the maximum aggregate amounts of compensation for the Board of Directors and for the Executive Committee
  • Determination of the target compensation for the CEO and for the other Executive Committee positions
  • Preparation of the compensation report

The table below describes the levels of authority:

 

 

CEO

 

RC

 

Board

 

Shareholders’ Meeting

Compensation policy and programs

 

 

 

proposes

 

approves

 

 

Aggregate maximum compensation amounts for the Executive Committee and for the Board of Directors to be submitted to vote at the AGM

 

 

 

proposes

 

reviews

 

approves (binding vote)

Remuneration system and Board member fees

 

 

 

proposes

 

approves

 

 

Compensation of the CEO

 

 

 

reviews

 

approves

 

 

Individual compensation of the other members of the Executive Committee

 

proposes

 

reviews

 

approves

 

 

Performance objectives and assessment of the CEO

 

 

 

reviews

 

approves

 

 

Performance objectives and assessment of the other members of the Executive Committee

 

proposes

 

reviews

 

approves

 

 

Compensation report

 

 

 

proposes

 

approves

 

consultative (advisory vote)

As per the Remuneration Committee Regulations of Sulzer Ltd, the RC consists of at least three members who are elected individually and annually by the Shareholders’ Meeting for the period of office until the following ordinary AGM. The majority of its members are non-executive and independent. At the AGM 2023, Alexey Moskov was re-elected as a member of the RC and Markus Kammüller was elected as a member for the first time. The new Chair of the RC is Dr. Hariolf Kottmann, who was also elected for the first time at the AGM 2023. Hanne Birgitte Breinbjerg Sørensen (former Chairwoman) and Suzanne Thoma (former member) did not stand for re-election.

In addition to Markus Kammüller being appointed as Lead Independent Director, there were several other new Board appointments at the AGM held on April 19, 2023. Dr. Prisca Havranek-Kosicek was elected as a member of Sulzer’s Board of Directors, serving as the Chair of the Audit Committee. Per Utnegaard was elected as a member of Sulzer’s Board of Directors and serves as the Chair of the Nomination Committee.

In 2023, Haining Auperin was appointed Chief Human Resources Officer and member of the Executive Committee, Jan Lüder joined as Division President Flow Equipment and Uwe Boltersdorf as Division President Chemtech.

The RC meets as often as the business requires, but at least twice a year. In 2023, the RC held four regular meetings that were attended by all members. This year’s agenda topics included a review of the Executive Committee’s compensation system, a review of the short-term incentive (STI) and performance share plan (PSP) performance targets and payouts, an analysis of the benchmark used for the Executive Committee and a continuation of the gender pay transparency study.

The CEO, the Chief Human Resources Officer and the Secretary of the Board of Directors, who also acts as the Secretary of the RC, generally attend the meetings. The Chair of the Committee may invite other executives to join the meeting in an advisory capacity, when appropriate. That said, neither the CEO nor any other executive participates in the meetings, or parts thereof, when their own remuneration and/or performance is discussed.

The Chair of the RC reports to the next meeting of the full Board of Directors on the activities of the RC and the matters discussed. The Chair, as far as necessary, submits the respective proposals for approval by the Board of Directors. The minutes of the RC meetings are available to all members of the Board of Directors.

The RC engaged third party advisor HCM International for the analysis of the benchmarks used for the Executive Committee and retained hkp///group for advisory services on the compensation report.

Shareholders’ role and engagement

The company is keen to receive shareholders’ feedback on the compensation policy and programs, and it already began the practice of holding an advisory vote on the compensation report in 2011. Additionally, the company regularly meets with shareholders and shareholder representatives to understand their perspectives. At the AGM 2023, along with changes to the governance structure, shareholders approved the maximum aggregate compensation amounts for the Board of Directors for the 2023/24 term and for the Executive Committee for the 2024 financial year.

Furthermore, the Articles of Association, which are also subject to shareholders’ approval, govern the principles of compensation. Minor changes were made to the Articles of Association at the AGM 2023, as on June 19, 2020, the Swiss Parliament adopted a revision of the corporate law, which entered into force on January 1, 2023 (subject to certain transitional provisions). Swiss corporations are obliged to revise their corporate documents to comply with the new law by the end of 2024. Thus, Articles 30 and 32 of the Articles of Association were slightly amended:

  • Article 30 does not foresee an authorization anymore to increase already approved compensation (supplemental amount) for internal promotions within the Executive Committee.
  • Article 32 now caps the maximum non-compete compensation in connection with post-contractual non-compete agreements with members of the Executive Committee (max. average total annual compensation over the last three financial years).

The Articles of Association in the current version include the following provisions related to compensation:

  • Principles of compensation (Article 31): Non-executive members of the Board of Directors receive fixed compensation only. Members of the Executive Committee receive fixed and variable compensation elements. The variable compensation may include short-term and long-term variable compensation components. These are governed by performance metrics that take into account the performance of the Sulzer group (Group) or parts of it targets in relation to the market, other companies or comparable benchmarks and/or individual targets, as well as strategic and/or financial objectives. Compensation may be paid in the form of cash, shares, options, financial instruments or similar units, in kind, in services or in other types of benefits.
  • Shareholders’ binding vote on compensation (Article 29): the Shareholders’ Meeting shall approve the maximum aggregate amount of compensation for the Board of Directors for the next term of office and the maximum aggregate amount of compensation for the Executive Committee for the following financial year. The Board of Directors shall submit the annual compensation report to an advisory vote at the AGM.
  • Additional amount for members of the Executive Committee hired after the vote on compensation by the Shareholders’ Meeting (Article 30): if the maximum aggregate amount of compensation as approved by the Shareholders’ Meeting is insufficient, up to 40% of the maximum aggregate amount of compensation approved for the Executive Committee shall be available, without further approval, for the compensation of the members of the Executive Committee who were appointed after the AGM.
  • Agreements with members of the Board of Directors and the Executive Committee (Article 32): Employment agreements for a fixed term may have a maximum duration of one year. Renewal is possible. Employment agreements for an indefinite term may have a termination notice period not exceeding twelve months. Non-compete agreements for the time after termination of an employment agreement are permissible and shall not exceed one year. Their consideration shall not exceed the last total annual target compensation such member was entitled to prior to termination and shall in no event exceed the average of the compensation of the last three financial years.
  • Loans, credit facilities and post-employment benefits for members of the Board of Directors and of the Executive Committee (Article 34): the company may not grant loans or credits to members of the Board of Directors or the Executive Committee.

Activities in other organizations

Based on Article 734e of the Swiss Code of Obligations, the compensation report must specify the functions of the members of the Board of Directors and the Executive Committee in other enterprises with an economic purpose within the meaning of Article 626 para. 2 no. 1 of the Swiss Code of Obligations (external mandates). For this, the following table includes the name of the entity and the function exercised.

Member

 

Name of company

 

Function

Dr. Suzanne Thoma

 

Beckers Group, Germany

 

Non-executive member of the Board of Directors

 

BayWa r.e., Germany

 

Non-executive member of the Board of Directors

Markus Kammüller

 

ExecDelta GmbH, Switzerland

 

Sole Partner

 

Gonset Holding SA, Switzerland

 

Vice-Chair of the Board of Directors

 

Gonset Immeubles d’Entreprises SA, Switzerland

 

Vice-Chair of the Board of Directors

David Metzger

 

Swiss Steel Holding AG, Switzerland

 

Non-executive member of the Board of Directors

 

medmix AG, Switzerland

 

Non-executive member of the Board of Directors

 

Mealda Capital GmbH, Switzerland

 

Sole Partner

 

Sopeli Capital GmbH, Switzerland

 

Sole Partner

Alexey Moskov

 

OC Oerlikon Corporation AG, Switzerland

 

Non-executive member of the Board of Directors

 

Witel AG, Switzerland

 

Executive Chairman

 

Liwet Holding AG, Switzerland

 

President of the Board of Directors

 

A2-Link AG, Switzerland

 

Sole Board Member

Dr. Prisca Havranek-Kosicek

 

Jenoptik AG, Germany

 

Chief Financial Officer

 

Jenoptik North America Inc., United States of America

 

Director

Dr. Hariolf Kottmann

 

Plansee Holding, Austria

 

Member of the Supervisory Board

 

HK1 AG, Switzerland

 

Sole member of the Board of Directors

Per Utnegaard

 

Saudi Ground Services, Saudi Arabia

 

Non-executive member of the Board of Directors

 

Alvest Holding, France

 

Non-executive Director

 

Per Utneegard & Partners GmbH, Switzerland

 

Sole Partner

Tim Schulten

 

JCB Group Holdings Sàrl, Switzerland

 

Director

In each individual case, the number of mandates does not exceed the maximum number of external mandates specified in Article 33 of the Articles of Association.