Board Members shall receive a fixed fee within the framework of the maximum amount approved by the general meeting. The Board of Directors shall set the amount of compensation at its own discretion, taking the members’ workload and position into account. To that purpose, the Board of Directors has enacted Rules and Regulations on the Compensation of Members of the Board of Directors, which are regularly reviewed to determine whether any adjustments are required. The Board of Directors shall not receive any variable compensation. Extra compensation is paid for the positions of Chairman, Vice-Chairman, Audit Committee Chair and NCC Chair, and for extraordinary efforts that go beyond the normal activities of the Board of Directors, such as acting as Investment Committee Chair at Ina Invest Ltd. No extra compensation is paid, however, for sitting on the Board of directors of subsidiaries.
The table below gives an overview of the compensation for individual duties on the Board of Directors
|Position||Compensation per year in office in CHF||Thereof in blocked shares of Ina Invest Holding Ltd|
|Chairman of the Board of Directors||200,000||1/3|
|Vice-Chairman of the Board of Directors||80,000||1/3|
|Other members of the Board of Directors||70,000||1/3|
|Chair of a Board of Directors committee (Audit Committee and NCC)||20,000||1/3|
|Chair of the Investment Committee at the subsidiary Ina Invest Ltd||20,000||1/3|
Two-thirds of the compensation of members of the Board of Directors is paid in cash. In order to take the shareholders’ interests into account and to link the compensation of the members of the Board of Directors to the performance of the Ina Invest Holding shares, one third of their remuneration is paid in shares. The shares allocated to the Board Members will be blocked for a period of three years. The restriction shall continue to apply – excepting cases of invalidity, departure for reasons of age, or death – also in the event of a departure from the Board of Directors.
The number of shares to be allocated to the Board Members shall be calculated on the basis of the average shares price of Ina Invest Holding Ltd in December of the relevant year.
Any cash compensation shall be paid to the Board Members quarterly in arrears.
The shares shall be distributed in a single block each year on the first trading day in January of the relevant year of the term of office, i.e. immediately after the relevant month of December used to calculate the number of shares.
The Company pays the mandatory social security contributions (AHV and ALV) on the Board of Directors’ compensation. No contributions are made to insurance or pension institutions.
Board Members are reimbursed for travel expenses incurred of over CHF 50 against presentation of receipts. Each Board Member shall assume all other business expenses that he or she incurs.
The CEO's compensation is a fixed fee within the framework of the maximum amount approved by the general meeting and consisting of a base salary in cash and a performance-based variable component under the STIP. For the development phase, taking the size of the Management Board into account, the Board of Directors has deliberately chosen to implement a Long-Term Incentive Plan to avoid overengineering by setting up a complex compensation architecture for only one employee (CEO). The STIP includes a long term element. Indeed, half of the variable compensation is paid in RSUs vested for 3 years; in addition, RSUs can in certain cases fall totally or partially (see below). Furthermore, the Nomination and Compensation Committee regularly reviews whether and when an additional LTIP should be introduced in addition to the STIP.
The amount of the base salary is determined by the Board of Directors at its discretion on recommendation by the NCC, taking into account the Company's financial results, the performance of the CEO, the economic situation and the compensation in similar companies.
In this instance, the Board benchmarked against a number of real estate companies such as Peach Property Group AG, Novavest Real Estate AG, Varia US Properties AG, Fundamenta Real Estate AG, Warteck Invest AG, PLAZZA AG, HIAG Immobilien Holding AG and Investis Holding SA.
The base salary amounted to CHF 430,000 in 2021 and is unchanged compared to the previous year. It is paid in 12 installments at the end of each month.
The compensation under the STIP shall be due and payable if and to the extent that the CEO's individually defined performance targets and the Group's financial targets have been achieved over the whole calendar year. The Group’s financial targets shall be set each year by the Board of Directors based on the NCC recommendations and underpin Ina Invest Holding AG’s strategic priorities, with a performance target set for each financial target at the start of the performance year. This corresponds to the expected performance, the achievement of which would lead to a payout factor of 100% of the respective financial metric. In addition, a 0% score (minimum performance) and 200% score are set for each individual target. The definition of the individual targets for the CEO shall likewise be determined by the Board of Directors at the proposal of the Chair of the Board of Directors and on the recommendation of the NCC.
For the year 2021, the STIP compensation was determined by the following quantitative financial targets and qualitative personal targets.
The quantitative financial targets were weighted at 70% and the qualitative personal targets at 30%. The financial targets were weighted as follows: the EBITDA 4/10, acquisition 2/10, sustainability 2/10, share prices 1/10 and investor relations 1/10. Sustainability was taken into account in the 2021 STI as both a quantitative financial target and qualitative personal target. The sustainability targets therefore amount to approximately 21.5% or a fifth of the STI.
The Target Incentive of the STIP equals 40% of the CEO's annual base salary.
The actual amount of compensation under the STIP shall be determined by the Board of Directors based on the NCC recommendations, taking into account the degree of achievement of the financial and personal targets. The actual amount of compensation may range from 0% to 200% of the Target Incentive. At year-end, the Chairman of the Board of Directors makes a recommendation to the NCC regarding the individual targets for the CEO. This recommendation is discussed in the NCC and the NCC makes the final decision on target achievement. A target achievement below the STI of 171% was set for 2021 (previous year: 120%). This target achievement is due in particular to the very successful financial year with the exceeding of both EBITDA and acquisition targets as well as the sustainability targets.
The compensation under the STIP shall be paid 50% in cash and 50% in Restricted Share Units (RSUs) with a vesting period of three years. After vesting, each RSU usually carries the right to subscribe for one registered share in Ina Invest Holding Ltd with a nominal value of CHF 0.03. The CEO's employment contract stipulates the Company can demand the return of all or part of the compensation under the STIP ("Clawback") in the event of a serious breach of the Code of Conduct or violation of statutory obligations and may also reduce future compensation under the STIP in whole or in part ("Malus").
The number of RSUs to be allocated shall be determined by the Board of Directors by dividing the relevant amount of compensation for the financial year in question by the reference price of the RSUs and then rounding up to the next whole number of RSUs. The reference price of the RSUs equals the average closing price of the Ina Invest Holding Ltd share in the calendar month immediately before the allocation of the RSUs. The RSUs vest on the third anniversary of the allocation, so long as the CEO is in a non-terminated employment relationship with the Company or a subsidiary. The Board of Directors may provide for different vesting periods.
The cash component of the compensation under the STIP will be paid and the RSUs will be allocated during the month of March following the financial year under review. The RSUs for 2020 will therefore be allocated in March 2021.
Perquisites, pension and benefits
The CEO is finally paid a lump-sum allowance for entertainment expenses and out-of-pocket expenses as well as a mobility allowance. The CEO is a member of the Company’s regular pension scheme. The costs of employee pensions and social security benefits are funded by the required employer contributions as well as the pension fund contributions.