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. Additional compensation is also paid for extraordinary efforts outside 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 Executive Management consists of two members, the CEO and the CFO. The compensation of the Executive Management is a fixed fee within the framework of the maximum amount approved by the AGM and consisting of a base salary in cash and a performance-based variable component under the STIP. For the development phase and also due to the size of the Executive Management, the Board of Directors deliberately refrained from implementing a long-term incentive plan in order to avoid overengineering in the form of a complex compensation structure for only one member of the Executive Management between 1 June 2020 and 31 December 2021 and two members from 1 January 2022. The STIP, on the other hand, contains a long-term element; half of the variable compensation is paid in the form of RSUs, which are restricted for three years. RSUs may lapse in whole or in part in certain cases (see below). In the current financial year, the Nomination and Compensation Committee discussed the introduction of an LTIP and the Board of Directors decided in February 2023 to introduce it from 1 January 2024. The introduction of the LTIP will remove the long-term element in the STI (RSUs) and the STI will be fully paid in cash from 2024 onwards.
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 members of the Executive Management, the economic situation and the compensation in other similar companies.
In this context, the Board of Directors conducted a benchmarking exercise with real estate companies, such as Peach Property Group Ltd, Novavest Real Estate AG, Varia US Properties Ltd, Fundamenta Real Estate Inc., Warteck Invest Ltd, PLAZZA AG, HIAG Immobilien Holding AG and Investis Holding Ltd, regarding the compensation of the CEO in 2020 and regarding the compensation of the CFO in 2021.
The base salary is a recurrent monthly payment in cash in equal instalments. The CEO’s base salary of CHF 430,000 remains unchanged compared to the previous year.
The compensation under the STIP shall be due and payable if and to the extent that the individually defined performance targets of the members of the Executive Management 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 Ltd’s strategic priorities, with a performance target set for each financial metric 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 (underperformance) and 200% score (outperformance) 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. The individual targets of the other members of the Executive Management shall be defined by the NCC on proposal from the CEO.
For 2022, the STIP compensation was determined by the following quantitative financial targets and qualitative personal targets.
The quantitative financial targets were weighted at 70%, the qualitative personal targets at 30%. Within the financial targets, the EBITDA target was weighted at 3/10, the market value and sustainability targets at 2/10 each, and the transaction, share price and investor relations targets at 1/10 each. Sustainability was included in the STI 2022 for the CEO both as a quantitative financial target and as a qualitative personal target. The sustainability targets thus amount to around 21.5%, or around one fifth of the STI.
The Target Incentive of the STIP equals 40% of the annual base salary of the members of the Executive Management.
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 level of compensation can vary between 0% and 200% of the target incentive, and for each individual target a value between 0% (underperformance) and 200% (outperformance) is set (e.g. with regard to EBITDA: 0% for -15% of the target EBITDA and 200% for +30% of the target EBITDA; for the GRESB target, the target value corresponds to 92 points). Finally, the results of the individual targets and their weighting determine the actual amount of the STI. At year-end, the Chair 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 shall make the final decision regarding the achievement of targets. For the CEO, the STI target for 2022 was set of 139% (prior year: 171%). This achievement is due in particular to the fact that the EBITDA and acquisition targets as well as the sustainability targets were exceeded.
In terms of the individual targets of the other members of the Executive Management (CFO), the CEO will make a recommendation to the NCC at the end of the year; the latter will make the final decision regarding the achievement of the targets.
Payment of the STI
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 employment contracts of the members of the Executive Management stipulates that 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 grant date, provided that the respective member of the Executive Management is in a non-terminated employment relationship with the Company or a subsidiary on that date. The NCC 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.
Expenses, pension and benefits
Finally, the CEO and the other members of the Executive Management (CFO) will be paid fixed expenses for representation and out-of-pocket expenses. In addition, the CEO will receive a mobility allowance. The members of the Executive Management participate in the regular pension fund for all employees. The costs of employee pensions and social security benefits are funded by the required employer contributions as well as the pension fund contributions.