5. Remuneration, profit-sharing and loans
The People & Remuneration Committee of the Board of Directors draws up the parameters for the remuneration of the members of the Board of Directors annually and submits them to the Board of Directors for approval. The members of the Board of Directors and Executive Management are not entitled to attend or participate in the relevant meetings of the Committee and Board of Managing Directors. The services of an external adviser were not called upon during the reporting year. The Committee regularly reviews the contracts of employment and the relevant income of the CEO and the members of the Executive Management. This is carried out on the principle of attracting the most suitable and well-qualified personnel for the company. The management is paid fairly at normal market rates, based on salary comparisons, in line with their abilities, experience and qualifications. The remuneration comprises a fixed salary plus a variable performance-related component. The level of the performance-related components depends on the attainment of personal targets set annually and the attainment of the company's targets.
The members of the Board of Managing Directors received a fixed salary in the form of a cash payment in 2008. The salary for the CEO also included remuneration for his duties on the Board of Managing Directors. The non-executive members of the Board of Directors did not receive either additional remuneration or emoluments in the form of additional fees, shares or options.
The members of the Executive Board received a basic salary plus a performance-related salary component, 30 % of which is based on personal targets and 70 % on the success of the company. The basic salary and performance-related components account for around 60 % and 40 % of the remuneration respectively.
In 2007, a stock option plan was introduced for the Executive Management. Under this plan, the members of the Executive Management may be granted options each year free of charge, although there is no obligation to do so. The options granted in 2007 may be exercised within three years for a price that is fixed when the options are received, provided that the relevant member fulfills the criteria, e.g. is still employed with the company. In 2007 and 2008 or 2009, only 50 % of the options awarded in each case could be exercised. One option corresponds to one share. At the start of 2009, the Executive Management were awarded 500,000 options under the stock option plan at an exercise price of CHF 12.00.
Please see the notes to the financial statements for detailed information on the remuneration paid to the members of the Board of Directors and the Executive Management.