6. Compensation of Members of the Executive Committee

After adjustments of the compensation packages for EC members in 2016 based on results of benchmarking studies, the Compensation Committee did not propose any changes to the EC compensation for 2017. Thus, 2017 compensation packages remained unchanged.

The EC participates in the same compensation elements as Clariant’s senior managers. Accordingly, they receive a fixed annual base salary, an annual cash bonus (GMBP) and long-term incentives (GSM-LTIP, PSU). The annual bonus is based on achieved results for the particular financial year and payout is capped at 100% target value. For details of the respective plans please refer to chapter .

Remuneration structure of the clariant executive committee1 in CHF

 

 

CEO Compensation

 

EC Compensation

 

 

2017

 

2016

 

2017

 

2016

1

Without other benefits.

2

3 years vesting period with defined performance hurdle (Value at Grant).

3

1:1 Match of Investment Shares after 3 years vesting period (Value at Grant).

4

Investment (minimum 20%) from Actual Cash Bonus into 3 years blocked shares (Value at Grant).

Total target

 

4 560 000

 

4 560 000

 

2 400 000

 

2 400 000

Performance Share Unit2

 

500 000

 

500 000

 

350 000

 

350 000

Matching Shares3

 

460 000

 

460 000

 

200 000

 

200 000

Target Cash Bonus, thereof Investment Share4 (20% Invest)

 

2 300 000
(460 000)

 

2 300 000
(460 000)

 

1 000 000
(200 000)

 

1 000 000
(200 000)

Base salary

 

1 300 000

 

1 300 000

 

850 000

 

850 000

The members of the EC participate in the pension plans of the Clariant Group, notably the Clariant pension fund with an insured income of up to CHF 200 000 per annum, and the management pension fund with an insured income of up to a further CHF 646 000 per annum. The maximum insured income under the pension plans therefore stands at CHF 846 000 per annum. The CEO participates in Clariant’s pension and insurance plans. Additional pension provisions are accrued over time in order to match contractually granted retirement plans.

Clariant’s pension plans conform with the legal framework of the occupational pension scheme (BVG). In the future, the maximum contribution will be dynamically aligned with art. 79c BVG. For members of the EC and all other Clariant employees, the insured income is defined as the base salary plus 50% of target cash bonus. Equity-linked income components are not subject to pensionable income. The usual term insurance policies for death and disability form part of Clariant’s pension plans. The total employer contribution is approximately 11% of the insured income in the case of the Clariant pension fund, and 22% of the insured income in the case of the Clariant management pension fund. These contributions cover both the contributions to the formation of retirement capital, and the risk components. Under , the Clariant pension fund is a defined benefit plan. The management pension fund provides the members with retirement capital upon retirement. Pension payments are only accepted in exceptional cases.

In accordance with the reporting requirements outlined in the Ordinance against Excessive Compensation (OaEC), the relevant Fair Market Value (FMV) figures are shown in the following audited table.

2017 annual compensation to members of the Executive Committee (Fair market value, FMV) in CHF

 

 

Hariolf Kottmann

 

Other EC members

 

Totals 2017

Base salary

 

1 300 000

 

2 550 000

 

3 850 000

Cash bonus1

 

1 339 520

 

1 747 200

 

3 086 720

Share-based bonus (FMV)

 

1 170 016

 

1 933 398

 

3 103 414

Other benefits2

 

1 250 358

 

1 628 534

 

2 878 892

Total

 

5 059 894

 

7 859 132

 

12 919 026

2016 annual compensation to members of the Executive Committee (Fair market value, FMV) in CHF

 

 

Hariolf Kottmann

 

Other EC members

 

Totals 2016

1

Mandatory to invest 20% of cash bonus into shares. Cash bonus displayed is already without the mandatory investments, which are included in the share-based bonus. Assumptions: share price at grant = CHF 25.00 (not fixed yet, final share price will be fixed in April 2018 and therefore the numbers of shares can change); cash bonus payout = 72.8%

2

»Other benefits« include pension contributions (56%), cost related to the international assignment of Christian Kohlpaintner (18%) and social security contributions/other benefits (26%).

3

Mandatory to invest 20% of cash bonus into shares. Cash bonus displayed is already without the mandatory investments, which are included in the share-based bonus; cash bonus payout = 92%.

Base salary

 

1 300 000

 

2 337 500

 

3 637 500

Cash bonus3

 

1 692 800

 

2 024 000

 

3 716 800

Share-based bonus (FMV)

 

1 297 996

 

1 982 376

 

3 280 372

Other benefits

 

1 561 507

 

1 207 007

 

2 768 514

Subtotal

 

5 852 303

 

7 550 883

 

13 403 186

Contractual payments to former EC members

 

 

2 340 579

 

2 340 579

Total

 

5 852 303

 

9 891 462

 

15 743 765

In 2016, Clariant had to make contractual payments to leaving members of the . In 2017, there were no such payments. In both years there were no loans or credits outstanding and/or granted.

The total compensation of the Executive Committee in 2017 sums up to CHF 12.9 million and is within the approved budget of CHF 16.6 million.

This compensation budget for 2017 was approved at the Annual General Meeting in 2016.

Information about the actual share ownership of the members of the Executive Committee is listed below. No options were granted in 2017 or were held at 31 December 2017.

2017 NUMBERS OF SHARES GRANTED

 

 

Hariolf Kottmann

 

Britta Fuenfstueck

 

Patrick Jany

 

Christian Kohlpaintner

 

Total

Number of investment shares1

 

13 396

 

5 824

 

5 824

 

5 824

 

30 868

Number of matching shares1

 

13 396

 

5 824

 

5 824

 

5 824

 

30 868

Number of performance share units

 

22 615

 

15 830

 

15 830

 

15 830

 

70 105

Total number of shares

 

49 407

 

27 478

 

27 478

 

27 478

 

131 841

SHARES HELD BY THE MEMBERS OF THE EXECUTIVE COMMITTEE

 

 

Number of shares granted for 20171

 

Number of shares granted for 20162

 

Number of shares within vesting
period for 2017

 

Number of shares within vesting
period for 2016

 

Number of privately held shares at 31 Dec. 2017

 

Number of privately held shares at 31 Dec. 2016

1

Number of shares only estimated (underlying assumption CHF 25.00 per share and 72.8% bonus payout), will need correction in next year’s Compensation Report.

2

Correction needed due to adjustments of final share price at grant: Underlying assumption was CHF 17.00 per share. Final allocation was done at CHF 18.67.

Hariolf Kottmann

 

49 407

 

75 028 (correction of 79 482)

 

143 171

 

152 325

 

447 421

 

449 135

Britta Fuenfstueck

 

27 478

 

35 596 (correction of 37 020)

 

44 020

 

20 784

 

7 406

 

0

Patrick Jany

 

27 478

 

40 496 (correction of 42 432)

 

80 569

 

84 237

 

378 996

 

354 196

Christian Kohlpaintner

 

27 478

 

40 496 (correction of 42 432)

 

80 569

 

84 237

 

305 135

 

280 335

Total

 

131 841

 

191 616 (correction of 201 366)

 

348 329

 

341 583

 

1 138 958

 

1 083 666

IFRS

The International Financial Reporting Standards (IFRS) are international accounting standards. VIEW ENTIRE GLOSSARY

Executive Committee

Management body of joint stock companies; at Clariant the Executive Committee currently comprises four members. VIEW ENTIRE GLOSSARY