Remuneration report and disclosure of payment to the Board of Directors and the Group Executive Committee in terms of Art. 663b bis, Swiss Code of Obligations
Remuneration report 2009 (English/PDF/1'116KB)Content and process for specifying remuneration and equity participation programs
The basic features of salary policy are elaborated by the personnel committee and adopted by the Board of Directors as a whole, which also approves the bonus program, the share purchase plan and the option plan.The Board of Directors approves the remuneration of the members of the Board of Directors and the Group Executive Committee on the basis of proposals submitted by the personnel committee. The Board of Directors anually reviews the main features of the salary policy. It rules on the adjustment of the basic salary of the members of the Group Executive Committee annually and stipulates the targets for performance related payments and the key data for the share purchase plan and the option plan. The Board of Directors has not engaged independent consultants for elaborating the salary policy or the compensation programs.
Remuneration of the Board of Directors
Until April 30, 2009 remuneration of the Board of Directors consisted of a payment in cash and a further
fixed sum which is disbursed in the form of shares. Since May 1, 2009 members of the Board of Directors
can chose whether to receive remuneration as cash or to take up shares. In case remuneration is settled in
shares, the number of shares is calculated on the basis of the average price of Rieter shares 20 trading
days prior to the meeting of the Board of Directors, at which the annual accounts are approved. Shares
will be allocated at tax value and are blocked for three years as of allocation date (28.4.2010). All entitled
members of the Board of Directors have opted for remuneration in the form of shares. Erwin Stoller is
Executive Chairman since 4.8.2009. His remuneration comprises a fixed component, a share component,
and a performance-related component based on the operational and strategic targets set by the Board
of Directors.
Remuneration of former members of the Board of Directors
No remuneration was disbursed to former directors and officers.
Remuneration of the Group Executive Committee
The Group Executive Committee is remunerated according to the principle of flexible, performance related compensation. This remuneration consists of a basic salary, a performance related component in the context of the bonus plan, the opportunity to participate in the share purchase plan and the allocation of options. The basic salary is derived from salaries paid for comparable positions in the market relevant for Rieter (machine manufacturing and automotive component suppliers). The performance related component for the CFO is based on consolidated net profit in absolute and percentage terms. For the heads of the divisions the operating profit (EBIT) achieved by their division is applicable in absolute and percentageterms instead of consolidated net profit. The performance related component amounts to no more than 80% of the basic salary.In the context of the share purchase plan the members of the Group Executive Committee can purchase Rietershares at a variable discount. The number of shares is calculated on the basisof the average price of Rieter shares 20 trading days prior to the meeting of the Board of Directors, at which the annual accountsare approved, less a discount. The level of discount depends upon the extent to which predefined targets for consolidated net profit, return on net assets (RONA) and growth have been achieved. In order to foster long-term ties between management and the company, at least two-thirds of the shares acquired in this way cannot be sold for three years.The members of the Group Executive Committee receive an option to purchase one Rieter registered share for each share purchased under the share purchase plan and subject to the three-year restriction on sale. The options have a duration of five years and can be exercised for the first time after the end of the second year following their allocation. The exercise price is calculated on the basis of the average price on the ten trading days immediately preceding the allocation of the option.
Additional fees and payments
No additional fees or other payments were disbursed to the members of the Board of Directors or the Group Executive Committee in 2009, nor were severance payments disbursed to any member of the Board of Directors or the Group Executive Committee in 2009.
Directorships with other companies
The Board of Directors rules on whether members of the Group Executive Committee or senior management may hold directorships with other companies. As a general rule, only one directorship may be held in order to limit demandson time. If the directorship is exercised outside contractually agreed working hours, there is no obligationto surrender to Rieter the director’s fees received.
Loans to directors and officers
No loans have been made to members of the Board of Directors or the Group Executive Committee.
