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3 Remuneration of the Board of Directors

3.1 Remuneration elements for the Board of Directors

In particular, the BKW remuneration system aims to ensure the independence of the Board of Directors in its oversight of the Group Executive Board. For this reason, the main compensation element for the Board of Directors is fixed – performance-based components are not paid to the Board of Directors.

a) Fixed payment (base salary)

The base salary of the Board of Directors comprises a fixed Board member fee. The level of the fee depends on the particular role (Chair or Deputy Chair), and the membership and roles pertaining to Board committees.

b) Attendance allowance

A fixed attendance allowance is paid for each meeting of the Board of Directors or committee in which the Board member participates. The Chairman of the Board of Directors does not receive an allowance for meetings.

c) Share-based remuneration

The members of the Board of Directors have the option once each year to invest in the share capital of BKW on preferential conditions. Unless there is an exceptional situation, the maximum number of shares available at preferential conditions is 600. The discount is equal to 30 % of the average share price over the last quarter of the previous financial year.

Participation in the share purchase programme for the members of the Board of Directors is an incentive to ensure the long-term increase of the value of the company. The shares acquired through this arrangement are subject to a three-year blocking period on their sale. This is taken into account when calculating the remuneration disclosed in this report for the deduction specified in Section 3.3 of Circular no. 37 of the Federal Tax Administration of 22 July 2013 on the taxation of employee shareholdings.

d) Other remuneration

Other remuneration paid to the members of the Board of Directors encompasses payments by BKW to the national social security funds and any withholding taxes.

3.2 Remuneration paid in 2019

The remuneration amounts paid to the Board of Directors are disclosed in the financial year in which they are recognised in the annual financial statements. The details about the remuneration paid to members of the Board of Directors for the financial years 2019 and 2018 are below.

During the 2019 financial year, the fixed remuneration of the members of the Board of Directors and the attendance allowances stayed the same. The attendance fees paid depend on the number of meetings attended by the Board member. No attendance fees are paid to the Chair. For individual members of the Board, payment is made in whole or in part to their employers. Share-based payments comprise the benefit in fair value of the preferential purchase of BKW shares. In 2019, each member of the Board of Directors was offered the opportunity to purchase 600 BKW shares (2018: 600 shares) at a preferential price of CHF 45.45 per share (2018: CHF 40.75). The underlying market value was CHF 68.30 per share (2018: CHF 60.00).

Remuneration of members of the Board of Directors in 2019

CHF thousands

Fixed remuneration

Attendance allowance

Share-based payments 1

Other remuneration

Total

Urs Gasche

Chairman

336

0

2

47

385

Hartmut Geldmacher

Deputy Chair

62

35

7

39

143

Dr. Carole Ackermann

Member

48

24

7

1

80

Roger Baillod

Member

60

24

7

1

92

Rebecca Guntern

Member

48

12

7

10

77

Andreas Rickenbacher

Member

48

35

1

13

97

Kurt Schär

Member

48

24

7

1

80

Total

650

154

38

112

954

1 The share-based remuneration is recognised at its tax value.

Remuneration of members of the Board of Directors in 2018

CHF thousands

Fixed remuneration

Attendance allowance

Share-based payments 1

Other remuneration

Total

Urs Gasche

Chairman

336

0

2

49

387

Hartmut Geldmacher

Deputy Chair

62

17

6

47

132

Dr. Carole Ackermann

Member (from 18.05.2018)

32

19

0

0

51

Marc-Alain Affolter

Member (until 18.05.2018)

20

5

6

3

34

Roger Baillod

Member

60

24

6

1

91

Dr. Georges Bindschedler

Member (until 18.05.2018)

20

5

6

0

31

Barbara Egger-Jenzer 2

Member (until 18.05.2018)

20

5

4

1

30

Rebecca Guntern

Member (from 01.09.2018)

32

7

0

4

43

Andreas Rickenbacher

Member (from 18.05.2018)

32

17

0

5

54

Kurt Schär

Member

48

24

6

1

79

Total

662

123

36

111

932

1 The share-based remuneration is recognised at its tax value.

2 All remuneration, including attendance allowances, was paid to the Canton of Bern.

3.3 Compliance with the maximum overall remuneration ratified by the General Meeting in respect of the 2018 / 2019 term of office

The General Meeting ratifies the maximum overall amount of remuneration of the Board of Directors for its term of office, i. e. from the General Meeting (each May) until the next General Meeting (the following April). By contrast, this Remuneration Report is based on the financial year and, thus, the information published as of 31 December 2019; the amount disclosed in this report has therefore been adjusted to a period of eight months (May to December 2019).

The 2019 General Meeting ratified a proposal for a maximum overall amount of CHF 1,200,000 in respect of remuneration of the Board of Directors for the 2019 / 2020 term of office. Calculated for the period of eight months to 31 December 2019, the payments to members of the Board of Directors amounted to CHF 636,000. The amounts yet to be paid in 2020 (from January to April 2020), which were not yet known when this report was prepared, will comply with the maximum overall amount ratified by the General Meeting. A report on the entire remuneration period (General Meeting 2019 to General Meeting 2020) will be provided at the General Meeting 2020.

In respect of the previous 2018 / 2019 term of office, the General Meeting ratified a maximum overall remuneration of CHF 1,200,000. As reported at the General Meeting 2019, this amount was observed, with total remuneration of CHF 936,000 paid during the term of office.

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