This Remuneration Report 2020 explains the principles, programmes and governance framework for remuneration of the Board of Directors and the Group Executive Board members at BKW. It contains detailed information about the remuneration paid to the Board of Directors and the Group Executive Board during the 2020 financial year.
BKW concluded a difficult 2020 very successfully. The EBIT target was once again significantly exceeded, despite the coronavirus crisis. The pandemic had a negative impact on both the Energy business and the Services business. Energy spot prices came under pressure due to the Covid-19 pandemic and demand collapsed, especially during the months of lockdown. The Services business too suffered from tougher conditions, and it was the second half of the year before it started to recover. Nevertheless, both of these negative effects were more than offset by the excellently positioned and functioning trading business. In addition, the Energy business pursued the consistent aim of adapting to new market conditions in 2020, while BKW’s Services business now has a stronger, cemented position in the corresponding parts of the market. The Remuneration Report explains the impact of these results on the variable remuneration of members of the Group Executive Board in the reporting year.
Following the contentious discussions relating to remuneration in 2019, and as already communicated in the Remuneration Report 2019, the Board of Directors commissioned a thorough review of the Group Executive Board’s remuneration system from a well-regarded firm of consultants during the reporting year. As an outcome from that review, the Board of Directors decided to update and modernise the remuneration system. The aim of the system continues to be to secure long-term success of the business and to unify the interests of the management with those of BKW and its shareholders. In particular, the short-term variable cash proportion (bonus) has been given greater weighting and BKW’s relative earnings per share has been included as an additional KPI. In addition in future, blocked shares will no longer be allocated on the basis of the average share price in 2014 – 2015, but instead on the basis of the average share price during the two years prior to the allocation. This new rule will apply from the 2021 financial year, although transition rules will still be required in some cases.
In recent years, the Group Executive Board remuneration has been gradually brought into line with the market. This comes against the backdrop of BKW’s very strong growth in that period and the fact that at the end of 2020 the business has achieved revenue of CHF 3,129 million with more than 10,000 employees and a market value of more than CHF 5.2 billion.
Further details of the changes to the Group Executive Board’s remuneration system for 2021 are provided in the Outlook section of this report.
At the 2021 General Meeting, we will present this Remuneration Report for approval within the scope of a consultative vote. You will note that the remuneration paid to the Board of Directors and Group Executive Board are within the maximum remuneration amounts approved by the General Meeting.
You, the shareholders, will also reach a binding decision by voting on the maximum total amount of remuneration of the Board of Directors for the coming period of office until the next ordinary General Meeting and on the maximum total remuneration to be paid to the Group Executive Board for the 2022 financial year.
On behalf of the Board of Directors I would like to thank you for your feedback on the topic of remuneration, and for your support. The modifications that we have adopted will improve our remuneration structure in the interests of BKW and its shareholders. We hope that you will support us again at the upcoming General Meeting.
Chairman of the Board of Directors