Remuneration paid to the Board of Directors and the Group Executive Board is tied to the generation of sustainable returns and therefore creates an incentive to achieve long-term corporate success as well as added value for shareholders.
This Remuneration Report provides a summary of the remuneration system and compensation paid to members of the Board of Directors and Group Executive Board (Executive Board as defined in Article 4 of the Articles of Incorporation) of Swisscom Ltd and will be put to a consultative vote at the Annual General Meeting on 4 April 2013.
The Remuneration Report is based on Article 5 of the Corporate Governance Directive issued by the SIX Swiss Exchange. Swisscom also complies with the recommendations of the Swiss Code of Best Practice for Corporate Governance issued by economiesuisse, the umbrella organisation representing Swiss business. Information and comments on remuneration and shareholdings pursuant to Article 663bbis and Article 663c Para. 3 of the Swiss Code of Obligations can also be found in the financial statements of Swisscom Ltd.
The remuneration principles applicable to the Board of Directors and the Group Executive Board are systematic, transparent and geared to the long term. Salaries of all Swisscom Group employees are determined by four factors: position, individual performance, company performance and the labour market. This approach takes into consideration the interests of employees, investors and the company.
Swisscom offers competitive salaries in order to attract and retain on a long-term basis highly skilled and motivated specialist staff and managers. The variable performance-related component is an additional management instrument aimed at achieving overarching goals. It serves to motivate employees, including management, to contribute to the companys long-term success. The Management Incentive Plan, which is binding on all members of the Board of Directors and the Group Executive Board, also ensures direct financial participation in the medium-term performance of Swisscoms shares. In addition to the details provided in this section, further information on the Management Incentive Plan can be found in Note 11 to the consolidated financial statements.
Division of tasks between the Board of Directors and the Compensation Committee
The Board of Directors approves the personnel and remuneration policy for the entire Group, as well as the general terms and conditions of employment for members of the Group Executive Board. It also defines the remuneration for each member of the Board of Directors and the CEO as well as the total remuneration for the Group Executive Board. The Compensation Committee handles business matters of the Board of Directors concerning remuneration, submits proposals to the Board of Directors in this context, and decides on the business which falls within its remit. While for the members of the Board of Directors no abstention obligation exists concerning the setting of their remuneration, the CEO and the other members of the Group Executive Board are not entitled to attend meetings at which discussions take place or decisions are made with regard to their remuneration. The decision-making powers are defined in the Organisational Regulations of the Board of Directors and the regulations for the Compensation Committee. The latest versions of these documents can be accessed on the Swisscom website. Revised or superseded documents can also be viewed there in the Download Archive.