Compensation 2022 and Share Ownership

Board of Directors

In order to fulfill the reporting needs outlined in the Ordinance against Excessive Compensation (OaEC), the relevant Fair Market Value (FMV) figures as earned by the BoD members for the calendar year are disclosed in the following audited table. All amounts are stated in gross amounts.

2022 ANNUAL COMPENSATION – EMOLUMENTS TO MEMBERS OF THE BOARD OF DIRECTORS (Fair Market Value = FMV) in CHF
    Günter von Au   Ahmed Mohammed Al Umar 1   Roberto Gualdoni 1   Thilo Mannhardt   Geoffery Merszei   Eveline Saupper   Naveena Shastri 1   Peter Steiner   Claudia Suessmuth Dyckerhoff   Susanne Wamsler   Konstantin Winterstein   Abdullah Mohammed Alissa 2   Nader Alwehibi 2   Calum MacLean 2   Totals 2022
Cash compensation                                                            
Honorarium   450 000   135 000   112 500   150 000   150 000   150 000   112 500   150 000   150 000   150 000   150 000   45 000   37 500   37 500   1 980 000
Committee fee     22 500   22 500   50 000   40 000   60 000   22 500   110 000   60 000   60 000   70 000   7 500   7 500   7 500   540 000
Social security contribution                                                            
Relevant amount   52 562   11 629     12 105 3     25 329       24 425   25 454     13 006   12 764     177 274
Shares                                                            
Fair Market Value (FMV)   300 000   120 000   100 000   100 000   100 000   100 000   100 000   100 000   100 000   100 000   100 000         1 320 000
Total 2022 (Fair Market Value 2022)   802 562   289 129   235 000   312 105   290 000   335 329   235 000   360 000   334 425   335 454   320 000   65 506   57 764   45 000   4 017 274
1 New Member of the Board since AGM 2022
2 Member of the Board up to AGM 2022
3 Incl. additional social security contributions due to inexistent agreement between countries
2021 ANNUAL COMPENSATION – EMOLUMENTS TO MEMBERS OF THE BOARD OF DIRECTORS (Fair Market Value = FMV) in CHF
    Günter von Au 1   Abdullah Mohammed Alissa   Hariolf Kottmann 2   Calum MacLean   Geoffery Merszei   Eveline Saupper   Peter Steiner   Claudia Suessmuth Dyckerhoff   Susanne Wamsler   Konstantin Winterstein   Nader Alwehibi   Thilo Mannhardt   Totals 2021
Cash compensation                                                    
Honorarium   375 000   180 000   112 500   150 000   150 000   150 000   150 000   150 000   150 000   150 000   150 000   150 000   2 017 500
Additional compensation                       24 224 3                           24 224
Committee fee   7 500   30 000   4   30 000   40 000   90 000   110 000   30 000   52 500   62 500   22 500   37 500   512 500
Social security contribution                                                    
Relevant amount   25 185   20 391   31 151   38 382   13 601   27 171     19 605   20 668     17 053   168 463 5   381 670
Shares                                                    
Fair Market Value (FMV)   300 015   120 010   75 000   100 011   100 011   100 011   100 011   100 011   100 011   100 011   100 011   100 011   1 395 124
Total 2021 (Fair Market Value 2021)   707 700   350 401   218 651   318 393   303 612   391 406   360 011   299 616   323 179   312 511   289 564   455 974   4 331 018
1 Regular Member of the Board until AGM April 2021; Chairman of the Board from AGM April 2021
2 Chairman of the Board until 7 April 2021
3 Extra compensation for temporary additional role as independent Lead Director since 24 July 2019 until 7 April 2021
4 Not a committee member for the period January-April 2021
5 Incl. regular social security contributions and tax gross-up due to inexistent tax agreement between the countries

The compensation disclosed in the tables reflects the respective calendar year (January to December), while at the AGM, stakeholders approve the total compensation to the BoD for a mandate year, i.e., for the period between two AGMs (in general April to March). The total compensation amount paid to BoD members for the mandate year 2021/2022 was CHF 4.2 million and, thus, below the amount approved by stakeholders of CHF 5.0 million. For the mandate year 2022/2023, a total compensation amount of CHF 4.0 million is expected, which would be within the limits of the approved amount of CHF 5.0 million for this mandate year. The final total compensation amounts for the mandate year 2022/2023 will be provided in the Compensation Report 2023.

In 2021 and 2022, there were no payments to former BoD members after the mandate year. In both years, no loans or credits were outstanding and/or granted to BoD members, former BoD members or their related parties. No compensation for special duties beyond their regular duties was paid to any BoD member in 2022.

The information about the actual share ownership of the Board of Directors is displayed in the next table.

SHARES HELD BY MEMBERS OF THE BOARD OF DIRECTORS
    Number of shares granted for 2022 1   Number of shares granted for 2021 2   Number of privately held shares as of 31 Dec. 2022   Number of privately held shares as of 31 Dec. 2021
Günter von Au   16 667   16 817   90 798   73 981
Ahmed Mohammed Al Umar   6 667      
Roberto Gualdoni   5 556     8 200  
Thilo Mannhardt   5 556   5 606   9 445   3 839
Geoffery Merszei   5 556   5 606   17 249   11 643
Eveline Saupper   5 556   5 606   35 112   29 506
Naveena Shastri   5 556      
Peter Steiner   5 556   5 606   32 612   27 006
Claudia Suessmuth Dyckerhoff   5 556   5 606   30 212   24 606
Susanne Wamsler   5 556   5 606   1 195 904 3   1 190 298
Konstantin Winterstein   5 556   5 606   6 097 627   6 092 021
Abdullah Mohammed Alissa     6 727     12 667
Nader Alwehibi     5 606     3 839
Calum MacLean     5 606     11 643
Total   73 333   73 998   7 517 159   7 481 049
1 The BoD mandate year runs from one AGM to the next AGM, which typically takes place in April. The final number of shares for the mandate year that began in 2022 will be defined prior to grant in 2023. The underlying assumption here is a share price of CHF 18.00.
2 Correction needed due to adjustments of final share price at grant: Underlying assumption was CHF 18.00; Final allocation of shares with CHF 17.84; Total amount of shares granted for 2021 based on the assumed share price of CHF 18.00 as shown in the Compensation Report 2021 was 69,473
3 Thereof 240 271 held by »The Honoré T. Wamsler Trust«

Executive Steering Committee

In 2022 several personnel changes occurred to the Executive Steering CommitteeExecutive Steering CommitteeThe Executive Steering Committee (ESC) is authorized by the Board of Directors to steer the company. It has overall strategic and financial responsibility, including for our profit and loss statement. The ESC consists of the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), and the three Business Presidents.View entire glossary (previously the Executive CommitteeExecutive CommitteeUntil 30 June 2022, the Executive Committee was mainly responsible for implementing and monitoring the Group strategy, for the financial and operational management of the Group, and for the efficiency of the Group’s structure and organization. Effective 1 July 2022, the Executive Committee was replaced by the Executive Steering Committee (ESC).View entire glossary ):

    Conrad Keijzer   Hans Bohnen   Bernd Högemann   Stephan Lynen   Bill Collins   Angela Cackovich   Jens Cuntze   Christian Vang
Function   Chief Executive Officer   Chief Operational Officer   Chief Transformational Officer   Chief Financial Officer   Chief Financial Officer   Business President AdsorbentsAdsorbentsUsually solid substances which are able to selectively accumulate certain substances from adjacent gaseous or liquid phases.View entire glossary & Additives   Business President Catalysts   Business President Care Chemicals
EC member until       30 June 2022   30 June 2022   30 June 2022                
Contract expires       30 June 2023   30 June 2023   30 June 2023                
ESC member from   1 January 2021               1 July 2022   1 July 2022   1 July 2022   1 July 2022

The contract expiration of the three EC members whose term ended in 2022 follows the contractually agreed 12-month notice period. No severance payments were or will be paid out to them. The handling of STI and LTI entitlements will follow the defined procedures under the respective plan rules and contractual obligations.

In parallel to the personnel changes, the overall compensation levels as well as the compensation mix was adjusted for the newly appointed ESC members. Based on the scope, size, and complexity of the role, each role was benchmarked against market data based on the Mercer Executive Compensation Guide Switzerland and additionally validated against the Mercer Executive Compensation Guide Western Europe. To be able to provide competitive compensation packages and to attract the right candidates for each role, the targeted pay position was defined at around the 75th percentile.

In order to compensate for lost entitlements with previous employers, two ESC members received a cash payment as well as relocation support in 2022. In addition, one ESC member received restricted share units subject to a three year vesting period to compensate for lost LTI entitlements with a previous employer. These amounts are included in the total compensation as shown below.

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. All figures are stated in gross amounts.

2022 ANNUAL COMPENSATION TO MEMBERS OF the Executive STEERING Committee (Fair Market Value = FMV) in CHF
    Conrad Keijzer   Other ESC members 1   EC members whose term ended in 2022   Totals 2022
Base salary   1 200 000   1 115 000   1 950 000   4 265 000
Cash bonus   1 224 600   864 280   1 648 500 5   3 737 380
Share-based incentive (FMV) 2   1 500 000   3   574 000 6   2 074 000
Restricted share units (FMV) 4     262 000     262 000
Other benefits 7   388 458   661 549   848 895   1 898 902
TOTAL   4 313 058   2 902 829   5 021 395   12 237 282
1 Amounts reflect the compensation for the time served as ESC member
2 Allocation of PSUs based on an 30-day average share price prior to grant on 8 April 2022: CHF 15.95
The conversion from PSU into shares is done after a 3-year vesting period, depending on the achievement factor.
3 No grant in 2022 for B. Collins and A. Cakovich due to joining only after the grant date; J. Cuntze and C. Vang only became ESC members after the grant date
4 B. Collins received 14,862 restrcited share units subject to a vesting period of three years as compensation for lost entitlements with previous employer.
5 The amount includes a pro-rated bonus payout for a departed EC member.
6 The amount reflects pro-rated entitlements due to the departure of EC members.
7 »Other benefits« include pension contributions, social security contributions, cash payments to selected ESC members for lost entitlements with previous employers, and other benefits.
2021 ANNUAL COMPENSATION TO MEMBERS OF THE EXECUTIVE COMMITTEE (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
1 Fair Market Value of a PSU under CLIP 2021 grant on 12 April 2021: CHF 13.64
The conversion from PSUs into shares is done after a 3-year vesting period, depending on the achievement factor.
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 %).

Comments on the 2022 Compensation

  • The total compensation amount of CHF 12.2 million received by the members of the Executive Steering CommitteeExecutive Steering CommitteeThe Executive Steering Committee (ESC) is authorized by the Board of Directors to steer the company. It has overall strategic and financial responsibility, including for our profit and loss statement. The ESC consists of the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), and the three Business Presidents.View entire glossary for 2022 is below the limits of the total compensation amount of CHF 16.0 million for 2022 as approved by the stakeholders at the 2021 AGM.
  • The newly appointed ESC members did not receive a grant under the CLIP 2022 in their capacity as ESC members. They will only receive PSUs under the next CLIP grant in April 2023.
  • The 2022 CLIP grants of the EC members whose term ended in 2022 were prorated up to their contractual end date. The Fair Market Value shown for these three members already considers the pro-rated amount.
  • The total compensation of CHF 12.2 million reflects an increase of CHF 0.9 million compared to the total compensation of CHF 11.3 million paid to EC members for the 2021 financial year. The increase is mainly driven by an increased amount of fixed compensation and other benefits due to the additional members of the Executive Steering CommitteeExecutive Steering CommitteeThe Executive Steering Committee (ESC) is authorized by the Board of Directors to steer the company. It has overall strategic and financial responsibility, including for our profit and loss statement. The ESC consists of the Chief Executive Officer (CEO), the Chief Financial Officer (CFO), and the three Business Presidents.View entire glossary , as well as higher payouts under the company’s short-term incentive plan.
  • In line with the strong financial performance in 2022, STI target achievements for BU EBITDAEBITDAEarnings before interest, taxes, depreciation, and amortization.View entire glossary , BU Cash Flow, and LC Growth increased for all business units, resulting in an increased average BU achievement of 90.3 % in 2022, compared to 87.9 % in 2021. The target achievement for Top Priorities increased to 100 % in 2022 (88 % in 2021).
  • Target achievements for the two Group financial KPIs ROIC and Operating Cash Flow were determined at 100 % (100 % in 2021). In accordance with Article 33 of the Articles of Association, the Board has the authority to adapt performance targets in extraordinary cases. In 2022, the BoD decided to adjust the achievements under the incentive plans by excluding impairment charges of CHF 453 million for North American Land Oil divestment and the Podari plant as well as the restructuring charge of CHF 39 million for implementation of new operating model.
  • Overall, the payout percentage under the short-term incentive plan for the CEO, CFO, and the EC members whose term ended in 2022 increased to 94.2 % for 2022 compared to 90.3 % in 2021. Payout percentages for the Business Presidents under the 2022 short-term incentive plan range from 94.2 % to 100 %.
  • The actual 2022 compensation for the CEO represents a paymix of 28 % base salary, 28 % cash bonus, 35 % share-based incentive (FMV) and 9 % other benefits. As none of the other ESC members/EC members served a full period, the disclosure of the actual paymix would not be comparable.
  • In 2021 and 2022, no loans or credits were outstanding and/or granted to the CEO, other EC members, former EC members or their related parties, as stipulated in the Articles of Association.

The chart below shows additional details for the Group KPIs used in the short-term incentive plan for the CEO. For each KPI, the chart includes the target performance, achieved performance, and the resulting payout percentage.

0132022 STI PERFORMANCE SUMMARY
comments2022Compensation

The actual share ownership of the members of the ESC is shown below. No options were held on 31 December 2021 or on 31 December 2022.

2022 Number of Shares Held by the Members of the Executive STEERING Committee
    Number of PSUs/RSUs granted in   Number of PSUs granted in   Number of unvested PSUs/RSUs as of   Number of unvested PSUs/RSUs as of   Number of privately held shares as of   Number of privately held shares as of
    2022 1   2021   31 Dec. 2022   31 Dec. 2021   31 Dec. 2022   31 Dec. 2021
Conrad Keijzer   94 044   109 971   204 015   109 971    
Bill Collins 2, 3   14 862     14 862      
Angela Cackovich 2            
Jens Cuntze 2           55 940  
Christian Vang 2           65 799  
Hans Bohnen 4   17 964   51 320   114 134   156 737   147 984   131 013
Bernd Hoegemann 4   17 964   51 320   114 134   125 058   70 623   65 056
Stephan Lynen 4     51 320     123 801   101 027   95 913
Total   144 834   263 931   447 145   515 567   441 373   291 982
1 Performance Share Units represent contingency rights that will be converted into shares, depending on the performance achievement after the 3-year vesting period. Unvested PSUs do not count toward the share ownership requirements.
2 No grant in 2021 and 2022; only became members of the ESC as of 1 July 2022 after the CLIP grant 2022
3 B. Collins received 14,862 restrcited share units subject to a vesting period of three years as compensation for lost entitlements with previous employer.
4 Amounts reflect pro-rated entitlements or forfeitures due to the departure of EC members.