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2 Setting remuneration: organisation and responsibilities

The broad outlines of the remuneration system as well as the corporate bodies involved in setting the compensation are defined in Arts. 24 to 29 of the articles of incorporation. These can be found (in German) on the BKW website under www.bkw.ch/statutes and include:

The table below shows how the responsibilities and competences are divided between the General Meeting (GM), the Board of Directors (BD) and the Remuneration and Nomination Committee (RNC).

Overview of responsibilities and competences

RNC Activity in the 2020 reporting year

Issue

RNC

BD

GM

February

September

November

Maximum total amount of remuneration of the Board of Directors and the Group Executive Board

PS 1

2

3

Additional amount for the remuneration of newly appointed members of the Group Executive Board 4

4, 5

BKW remuneration policy and system

PS

R

Remuneration system and principles for Board of Directors and Group Executive Board

PS

R

Performance criteria for remuneration of the CEO and the Members of the Group Executive Board

5

Individual remuneration of the Board of Directors

PS

6

Performance assessment and individual remuneration of the CEO

5, 6

Performance assessment and individual remuneration of the Members of the Group Executive Board (excl. CEO)

4, 5, 6

Remuneration Report

PS

R

CV 7

Principles governing the selection of candidates for election or re-election to the Board of Directors

PS

R

Election, dismissal and succession planning for members of the Group Executive Board

PS

R

1 PS means preparation and submission to Board of Directors

2 S means submission to the General Meeting

3 R means ratification

4 CEO’s proposal

5 Within the scope of the articles of incorporation

6 Within the scope of the maximum total amount approved by the General Meeting

7 CV means consultative vote

At the committee’s three regular meetings held in 2020, it dealt with matters including the recurring agenda items listed above. It also held 21 extraordinary meetings and video conferences in which it dealt in particular with succession planning for the Board of Directors and the Group Executive Board, appointment of the new Group Executive Board member and revision of the remuneration system. All members of the committee attended all of its meetings.

Remuneration and Nomination Committee

According to Art. 25 of the articles of incorporation, the Remuneration and Nomination Committee is concerned at senior company management level with the remuneration strategy and with the company’s objectives and performance criteria in relation to the remuneration of the Group Executive Board. In addition, it is authorised to develop criteria for the selection of candidates to the Board of Directors and the Group Executive Board. The committee has three members, and is comprised as follows:

Urs Gasche

Chairman of the Board of Directors, Chairman

Hartmut Geldmacher

Deputy Chair of the Board of Directors, Member

Andreas Rickenbacher

Member of the Board of Directors, Member

The attendance of the Chair at the meetings of the Remuneration and Nomination Committee is in the interest of the company and its shareholders. The Chair works most closely with the CEO and the Group Executive Board and is therefore in the best possible position to make an in-depth assessment of the work they perform. In addition, the Remuneration and Nomination Committee is responsible for personnel planning for the Board of Directors and the Group Executive Board, which is a strategic element of corporate management. The risk of a conflict of interests – in particular when defining remuneration – is also excluded as the Chair withdraws when these matters are discussed in the Remuneration and Nomination Committee and by the Board of Directors.

When required, managers may be invited to attend meetings of the Remuneration and Nomination Committee. However, no members of the company’s management are present when their own performance or remuneration is discussed or decided.

At meetings of the Board of Directors, the Chair of the Remuneration and Nomination Committee reports to the Board of Directors on the committee’s activities and decisions; urgent updates are also provided between meetings. All members of the Board of Directors have access to the minutes of the Remuneration and Nomination Committee’s meetings.

In addition, an ad hoc nomination committee, temporarily constituted by the Board of Directors in 2020, met on three occasions to evaluate the choice of a new Chair of the Board of Directors following the announcement of the current Chair of the Board of Directors that he would retire. The temporary committee was formed to ensure that no potential candidate would be involved in the preparatory work. This committee was composed of the following Members of the Board of Directors: Carole Ackermann, Hartmut Geldmacher, Rebecca Guntern and Kurt Schär.

Shareholder involvement

At the General Meetings of 24 May 2019 and 15 May 2020, binding votes were taken on the maximum amounts of remuneration for the Board of Directors and the Group Executive Board, as well as a consultative vote on the remuneration report. The overall amount for the remuneration of the Board of Directors relates to the period from the current General Meeting until the next General Meeting. By contrast, the overall amount of remuneration of the Group Executive Board relates to the full financial year that follows the General Meeting.

At the 2020 General Meeting, the shareholders voted by around 95 % in favour of the overall remuneration of the Group Executive Board and by around 99 % in favour of the overall remuneration of the Board of Directors (2019 GM: GEB 96 % and BD 98 %). The vote to adopt the Remuneration Report 2019 held at the 2020 General Meeting was slightly lower at 84 % (Remuneration Report 2018 at 2019 GM: 86 % in favour). BKW interpreted this result as a reason to engage in dialogue with the shareholders in order to understand their concerns in relation to the remuneration policy and plans. The findings of this consultation have been included in the Outlook section of this report.

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