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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 remuneration elements for the Board of Directors are fixed – performance or profits-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 memberships and roles pertaining to Board committees.

Role

Gross remuneration (per annum)

Chair of the Board of Directors

CHF 336,000

Deputy Chair of the Board of Directors

CHF  62,400

Member of the Board of Directors

CHF  48,000

Chair of a committee

CHF  12,000

If there is a significant but temporary increase in workload in comparison with previous years, the Board of Directors may agree an additional payment of no more than 20 % of the fee.

b) Attendance allowance

A fixed attendance allowance of CHF 2,400 is paid for each meeting of the Board of Directors or committee in which the Board member participates. The Chair 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 terms. 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 and to align their interests more closely with those of the shareholders. The shares acquired through this arrangement are subject to a three-year blocking period on their sale.

d) Social security contributions (other remuneration)

This remuneration encompasses payments by BKW to the social security funds and any withholding taxes. Members of the Board of Directors are not insured by the BKW pension fund.

e) Contracts

Fixed-term or permanent mandate agreements may be concluded with members of the Board of Directors (Art.29 of the articles of incorporation); however, the effectiveness of the mandate is subject solely to the annual election to the Board of Directors by the General Meeting. No employment contracts exist between BKW and members of the Board of Directors. The members of the Board of Directors are independent and their rights and obligations are based on the norms of company law and the provisions of the articles of incorporation, regulations and mandate agreements.

3.2 Remuneration paid in 2020

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 2020 and 2019 are given below.

During the 2020 financial year, the fixed remuneration of the members of the Board of Directors and the attendance fees stayed the same. The attendance fees paid depend on the number of meetings attended by the Board member. As previously mentioned, many additional meetings were held in 2020 due to the revision of the remuneration system and succession planning for the Chair of the Board of Directors. 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 2020, each member of the Board of Directors was offered the opportunity to purchase 600 BKW shares (2019: 600 shares) at a preferential price of CHF 50.45 per share (2019: CHF 45.45). The underlying market value at the closing price on the first day of the reference period (that is, 19 March 2020) was CHF 73.50 (2019: CHF 68.30). Owing to the greater number of meetings that took place during the current year, the remuneration of members of the Board of Directors in 2020 increased by around 15 %.

Remuneration of members of the Board of Directors in 2020

CHF thousands

Fixed remuneration

Attendance allowance

Share-based payments 1

Total remuneration

Social insurance contributions

Total

Urs Gasche

Chairman

336

0

7

343

44

387

Hartmut Geldmacher

Deputy Chair

62

79

7

148

73 2

221

Dr. Carole Ackermann

Member

48

31

7

86

1

87

Roger Baillod

Member

60

29

7

96

1

97

Rebecca Guntern

Member

48

22

7

77

12

89

Andreas Rickenbacher

Member

48

72

1

121

19

140

Kurt Schär

Member

48

36

7

91

1

92

Total

650

269

43

962

151

1,113

1 The share-based payments correspond to the difference between the taxable market value (closing price on the first day of the reference period) and the purchase price under the share purchase programme.

2 Includes withholding tax in addition to social security contributions.

Remuneration of members of the Board of Directors in 2019

CHF thousands

Fixed remuneration

Attendance allowance

Share-based payments 1

Total remuneration

Social insurance contributions

Total

Urs Gasche

Chairman

336

0

2

338

47

385

Hartmut Geldmacher

Deputy Chair

62

35

7

104

39 2

143

Dr. Carole Ackermann

Member

48

24

7

79

1

80

Roger Baillod

Member

60

24

7

91

1

92

Rebecca Guntern

Member

48

12

7

67

10

77

Andreas Rickenbacher

Member

48

35

1

84

13

97

Kurt Schär

Member

48

24

7

79

1

80

Total

650

154

38

842

112

954

1 The share-based payments correspond to the difference between the taxable market value (closing price on the first day of the reference period) and the purchase price under the share purchase programme.

2 Includes withholding tax in addition to social security contributions.

3.3 Compliance with the maximum overall remuneration approved by the General Meeting for the term of office 2019/2020

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; the amount disclosed in this report has therefore been adjusted to a period of eight months (May to December 2020).

The 2020 General Meeting ratified a proposal for a maximum overall amount of CHF 1,200 thousand in respect of remuneration of the Board of Directors for the 2020/2021 term of office. Calculated for the period of eight months to 31 December 2020, the payments to members of the Board of Directors amounted to CHF 747 thousand. The amounts yet to be paid in 2021 (from January to April 2021), 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 2020 to General Meeting 2021) will be provided at the General Meeting 2021.

In respect of the previous 2019/2020 term of office, the General Meeting ratified a maximum overall remuneration of CHF 1,200 thousand. As reported at the General Meeting 2020, this amount was observed, with total remuneration of CHF 1,010 thousand paid during the term of office.

3.4 Payments to former members of the Board of Directors and their related parties

No payments were made to former members of the Board of Directors during the reporting year. There were also no payments to related parties of members of the Board of Directors.

3.5 Loans and credit to members of the Board of Directors

No loans or credit were granted to members of the Board of Directors during the financial year No loans or credit were owed at the end of the reporting year.

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