1. Members and Responsibilities of the Compensation Committee of the Board of Directors
During the 2021 reporting year, the Compensation Committee (CoC) comprised four non-executive members of the Board of Directors (BoD): Eveline Saupper (Chairwoman), Nader Ibrahim Alwehibi, Claudia Suessmuth Dyckerhoff, and Konstantin Winterstein. The Chairman of the Board is a regular guest in the CoC.
The Corporate Secretary acts as Secretary to the CoC. The Chief Human Resources Officer is a regular guest to share information and consult on relevant topics. The Chairwoman of the CoC may invite the Chief Executive Officer (CEO) to discussions on individual agenda items for consultation, taking into account potential conflicts of interest that would oblige the CEO to abstain.
If necessary, external remuneration advisors are asked to join the committee meetings.
The roles and responsibilities of the CoC are defined in paragraph 3.2.2 of the Bylaws of the Board of Directors of Clariant from 7 April 2021 (www.clariant.com/en/company/Corporate-Governance/Articles-of-Association) in combination with paragraphs 3 and 5 of the Compensation Committee Charter from 1 April 2019 (www.clariant.com/en/Company/Corporate-Governance/Committees):
The CoC reviews and proposes – subject to the approval of the total compensation by the General Meeting – the individual compensation for members of the BoD, the CEO, and members of the EC to the BoD for approval. It approves employment contracts, including agreements governing departures and termination of the CEO and members of the EC. The CoC takes note of appointments of heads of global business units, heads of business services units, and heads of regions, and regularly reviews and approves their compensation. Furthermore, upon proposal by the CEO, the CoC reviews and approves any early retirement agreements for the members of the EC, the heads of global business units, and heads of business services units.
The CoC reviews compensation market data and competitor benchmark data to ensure Clariant’s competitiveness to attract and retain key people needed to ensure long-term success of the business. It reviews and approves general global compensation and benefits policies, including Short-Term and Long-Term Incentive Plans, and defines the overall Group targets on which they depend, as well as the attainment levels of these targets (upon proposal by the CEO/Chairman). Additionally, the CoC defines guidelines for determining the compensation of the members of the management committees of the business units and service units.
Finally, the CoC prepares the Compensation Report for the BoD and reviews any other mandatory public disclosure statements on compensation and benefits.
The CoC must meet at least twice a year; however, it is regular practice to hold three meetings:
February: Determination of bonus payments for members of the EC, determination of BoD and EC budgets for the upcoming (mandate) year; determination of the Short-Term Incentive (STI) and Long-Term Incentive (LTI) targets
June: Fundamental matters concerning the Group’s Human Resources priorities
December: Preparation of the Compensation Report, planning of compensation changes in the following year; approval of the EC compensation for the following year
The CoC also meets as needed. In 2021, the CoC met four times and held several telephone conferences.