Compensation report

The Zug Estate Group's compensation policy provides a suitable basis for the remuneration of employees and managers that is both performance-based and in line with the market.

The Zug Estate Group's compensation policy provides a suitable basis for the remuneration of employees and managers that is both performance-based and in line with the market. The compensation system is structured in such a way that the interests of the key employees are compatible with the interests of the Group. It is built on the following guiding principles:

• The Group's compensation system is straightforward and transparent.
• Members of the board of directors receive fixed compensation only.
• The variable compensation for members of Group Management is set at a moderate level.

On an annual basis, the general meeting of shareholders votes on whether to approve the proposal of the board of directors for the total compensation to be paid to the board of directors for the period until the next ordinary general meeting, as well as for the total compensation to be paid to Group Management for the coming financial year. The general meeting also acknowledges the compensation report by consultative vote.

The following remarks outline the principles of the compensation system and the details of the compensation received by the board of directors and Group Management for the 2015 financial year.

Board of directors

Pursuant to article 18 of the company"s articles of association, members of the board of directors receive a fixed compensation in cash. They will, in principle, also be reimbursed for expenses incurred on behalf of the company, provided that any such reimbursement of further expenses is paid only in exceptional cases, and if evidenced by supporting documentation, within 60 days. No such expenses were paid in the year under review.

Acting on the proposal of the Nomination and Compensation Committee, the entire board of directors determines at its discretion, on an annual basis and within the limits of the total amount, the amount of the fixed cash compensation to be paid to the individual members for the period from the next ordinary general meeting of shareholders to the following ordinary general meeting. The total amount is submitted to the general meeting for approval. When determining said amount, particular consideration is given to the performance of additional functions and to work done on the committees of the board of directors (function bonus). External consultants are not engaged.

The compensation paid to the board of directors in the year under review rose by CHF 59 292 year-on-year and effectively totaled CHF 928 370 in the 2015 business year (see detailed breakdown.) The general meeting of shareholders took a first vote on the compensation on April 14, 2015 and approved a total amount for the board of directors of CHF 950 000 for the period up to the general meeting of shareholders on April 12, 2016. Of this total, the sum of CHF 611 684 was paid out in the reporting year in the period from the 2015 general meeting of shareholders to December 31, 2015.

At the 2016 general meeting of shareholders, the board of directors will propose that compared to the previous financial year, a higher total amount be made available as the fixed cash compensation payable to the members of the board of directors in the period of office until the next ordinary general meeting of shareholders.

Group Management

Pursuant to article 18 of the company's articles of association, the compensation paid to members of Group Management comprises a fixed cash compensation, a performance-based compensation in cash, and a reimbursement of expenses in accordance with the expenses regulations approved by the cantonal tax authorities.

The fixed cash compensation is determined according to the actual area of responsibility, professional profile and expertise of each individual member of Group Management and the amount of work performed.

The performance-based compensation paid to Group Management is intended to ensure that the interests of Group Management, the board of directors and the shareholders correspond as closely as possible. Pursuant to article 18 of the company's articles of association, it may be equivalent to a maximum of half the fixed cash compensation.

When determining this amount, consideration is given mainly to the progress of business, as well as to individual performance, personal initiative and attainment of the agreed targets. The progress of business is evaluated in terms of economic success. This in turn is generally measured on the basis of earnings drivers – specifically, payout potential generated and earnings prospects – and other factors. Accordingly, in the year under review, not only were the factors growth and earnings taken into account, but also the criteria of quality, target conformity and communication. Acting on the proposal of the Nomination and Compensation Committee, the board of directors determines at its discretion on an annual basis the fixed cash compensation and the performance-based compensation within the limits of the total amount approved by the general meeting of shareholders.

Compensation for the Group Management totaled CHF 869 993 in the year under review, 5% less than in the previous year. On April 14, 2015, the general meeting of shareholders approved the total amount of CHF 1.2 million as the compensation payable to the Group Management for the 2016 business year. An initial comparison between approved and paid compensation will be presented in the Annual Report 2016.

At the 2016 general meeting of shareholders, the board of directors will propose that an unchanged amount of CHF 1.2 million be made available as the total compensation payable to the Group Management for the 2017 business year.

Members of Group Management are not present at meetings of the Nomination and Compensation Committee or of the board of directors dealing with employment contracts of members of Group Management and, in particular, compensation received by the latter. External consultants are not engaged.

The employment contracts of the members of Group Management stipulate a period of notice of six months.

Shareholding programs

Zug Estates Holding AG does not have any participation or option programs, and no shares, option rights or conversion rights were assigned to members of the board of directors, Group Management or associated persons.

Loans and credits

No loans or credits were granted to members of the board of directors or Group Management or associated persons, and none are outstanding.

Former members

All compensation paid to former members of the board of directors or Group Management who left the respective bodies in the 2015 financial year are shown in the compensation overview. Moreover, Zug Estates Holding AG has paid no direct or indirect compensation to former members of the board of directors or Group Management or associated persons.

No loans or credit facilities are outstanding in relation to former members or associated persons.

Compensation payable to the board of directors and Group Management

The following compensation was paid to the members of the board of directors and the Group Management in the year under review.

• Letter to shareholders
• Financial year report
• Corporate governance report
  • 1. Group structure and shareholders
  • 2. Capital structure
  • 3. Board of directors
  • 4. Group Management
  • 5. Compensation, shareholdings and loans
  • 6. Shareholders’ participation
  • 7. Changes of control and defense measures
  • 8. Auditing body
  • 9. Information policy
• Compensation report
  • Report of the statutory auditor
• Key Figures