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:

The table below describes the levels of authority:

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:

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

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.

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.  

Letter to the Shareholders

Compensation Architecture CEO and EC