7. Compensation of Members of the Executive Committee
The Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members. (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 (CLIP) as stated in Art. 27 of the Articles of Association. The annual bonus is based on achieved results for the particular financial year, and payout is capped at 100 % of the target value. For details of the respective plans, please refer to sections 5.1.a and 5.2.c of this Compensation Report. According to Clariant’s Articles of Association (www.clariant.com/en/Company/Corporate-Governance/Articles-of-Association), the annual bonus payout and any single share grant must each not exceed 200 % of base salary for the CEO and 150 % for EC members (Art. 32; www.clariant.com/en/Company/Corporate-Governance/Articles-of-Association).
The Compensation Committee decides on the amendment or discontinuation of the annual bonus plan and Long-Term Incentive Plans for the EC (Art. 33–35).
The CEO and members of the EC participate in the pension plans of the Clariant Group in Switzerland, 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 an additional CHF 653 200 per annum. The maximum insured income under the pension plans therefore stands at CHF 853 200 per annum.
Clariant’s pension plans comply with the legal framework of the Swiss Occupational Pension Scheme Act (BVG), and the maximum contribution will be dynamically aligned in accordance 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 the target cash bonus. Equity-linked income components are not subject to pensionable income. Usual policies for death and disability are 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 IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards., 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.
Remuneration structure of the Clariant Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.1 in CHF
| CEO Compensation | EC Compensation | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| as % of base salary | as % of base salary | |||||||||||
| Total annual target | 4 000 000 | 4 200 000 | 2 050 000 | 2 450 000 | ||||||||
| Long-Term Incentives 2 | 1 500 000 | 125 | 1 200 000 | 700 000 | 108 | 750 000 | ||||||
| Short-Term Incentives 3 | 1 300 000 | 108 | 1 800 000 | 700 000 | 108 | 800 000 | ||||||
| Base salary | 1 200 000 | 100 | 1 200 000 | 650 000 | 100 | 900 000 | ||||||
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1 Without other benefits
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2 Annual grant volume; Performance Share Units with 3-year vesting and defined performance hurdle; vesting capped at 100 % target achievement
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3 Target cash bonus (GMBP); annual payout capped at 100 % target achievement
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The following personnel changes within the EC occurred in 2021:
- Conrad Keijzer was appointed CEO effective 1 January 2021.
No sign-on bonus or other extraordinary payment was made to the current CEO or current EC members. The split between the CEO pay and an average employee is not being published this year. This figure is best seen based on a development and not the observation of a single year. Due to the changes in CEO appointments in 2019 and 2020 as well as the change in CEO and EC remuneration levels and structures, the respective split will be shown in forthcoming years.
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.
2021 ANNUAL COMPENSATION TO MEMBERS OF the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members. (Fair Market Value = FMV) in CHF
| Conrad Keijzer | Other EC members | Totals 2021 | ||||
|---|---|---|---|---|---|---|
| Base salary | 1 200 000 | 1 950 000 | 3 150 000 | |||
| Cash bonus | 1 173 900 | 1 896 300 | 3 070 200 | |||
| Share-based incentive (FMV) 1 | 1 500 004 | 2 100 014 | 3 600 018 | |||
| Other benefits 2 | 471 154 | 981 956 | 1 453 110 | |||
| Total | 4 345 058 | 6 928 271 | 11 273 329 | |||
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1 Fair Market Value of a PSU under CLIP 2021 grant: CHF 13.64. The conversion from PSUs into shares is done after a 3-year vesting period, depending on the achievement factor.
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2 »Other benefits« include pension contributions for current EC members (43 %), social security contributions for current and former EC members (29 %), and other benefits for current and former EC members (28 %)
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2020 ANNUAL COMPENSATION TO MEMBERS OF THE EXECUTIVE COMMITTEEExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members. (FAIR MARKET VALUE = FMV) in CHF
| Hans Bohnen 1 | Other EC members | Totals 2020 | ||||
|---|---|---|---|---|---|---|
| Base salary | 900 000 | 3 075 000 2,3 | 3 975 000 | |||
| Cash bonus | 604 800 | 1 259 174 2 | 1 863 974 | |||
| Share-based incentive (FMV) 4 | 750 012 | 1 500 024 2 | 2 250 036 | |||
| Other benefits 5 | 300 992 | 823 655 2,3 | 1 124 647 | |||
| Total | 2 555 804 | 6 657 853 | 9 213 657 | |||
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1 As Hariolf Kottmann acted as Executive Chairman in 2020, he was not entitled to the cash bonus and the share-based incentive and, hence, was not the highest paid EC member.
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2 Including Bernd Hoegemann and Stephan Lynen; Patrick Jany considered pro rata based on active role as EC member in 2020
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3 Including additional compensation for Hariolf Kottmann as Executive Chairman (total 2020: CHF 1 284 673)
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4 Fair Market Value of a PSU under CLIP 2020 grant: CHF 12.87. The conversion from PSUs into shares is done after a 3-year vesting period, depending on the achievement factor.
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5 »Other benefits« include pension contributions (48 %), social security contributions (41 %), and other benefits (11 %); including other benefits for former EC members.
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In 2020 and 2021, no loans or credits were outstanding and/or granted to the CEO or EC members. According to Art. 30 of Clariant’s Articles of Association (www.clariant.com/en/Company/Corporate-Governance/Articles-of-Association), no loans may be granted to EC members.
The total compensation of the EC for 2021 amounts to CHF 11.3 million and is within the approved budget of CHF 16.0 million granted for the year 2021 at the Annual General Meeting in 2020.
According to Art. 28 of Clariant’s Articles of Association (www.clariant.com/en/Company/Corporate-Governance/Articles-of-Association), an additional amount of 50 % of the respective total remuneration approved by the Annual General Meeting can be spent in the event that new EC members are appointed after the Annual General Meeting. This flexibility was not needed in 2021.
The actual share ownership of the members of the EC is shown below. No options were held at 31 December 2020/2021.
2021 Number of Shares Granted
| Conrad Keijzer | Hans Bohnen | Bernd Hoegemann | Stephan Lynen | Total | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Number of performance share units 1 | 109 971 | 51 320 | 51 320 | 51 320 | 263 931 | |||||
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1 Performance Share Units represent contingency rights that will be converted into shares, depending on the performance achievement after the 3-year vesting period.
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SHARES HELD BY THE MEMBERS OF THE EXECUTIVE COMMITTEEExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.
| Number of PSUs granted in 2021 | Number of PSUs granted in 2020 | Number of unvested PSUs/RSUs at 31 Dec. 2021 | Number of unvested PSUs/RSUs at 31 Dec. 2020 | Number of privately held shares at 31 Dec. 2021 | Number of privately held shares at 31 Dec. 2020 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Conrad Keijzer 1 | 109 971 | 0 | 109 971 | 0 | 0 | 0 | ||||||
| Hans Bohnen | 51 320 | 58 276 | 156 737 | 112 381 | 131 013 | 124 049 | ||||||
| Bernd Hoegemann | 51 320 | 58 276 | 125 058 | 79 299 | 65 056 | 59 495 | ||||||
| Stephan Lynen | 51 320 | 58 276 | 123 801 | 78 799 | 95 913 | 89 595 | ||||||
| Total | 263 931 | 174 828 | 515 567 | 270 479 | 291 982 | 273 139 | ||||||
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1 No grant in 2020; CEO as of 1 January 2021
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