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Compensation

Givaudan aims to attract, motivate and retain the highest calibre of professional and executive talent to sustain its leadership position within the flavour and fragrance industry. The Company’s compensation policies are an essential component of this strategy, as well as key drivers of organisational performance.

Our compensation programmes reflect the performance of the business and of individuals, and we have put in place rigorous governance, processes and policies to ensure that our compensation practices are aligned with our principles.

Compensation governance and rules

The Compensation Committee of the Board of Directors (Board) consists of three members of the Board, all of whom are independent, and is currently chaired by Prof. Dr-Ing. Werner Bauer. The Chief Executive Officer is regularly invited to Compensation Committee meetings, but does not participate in discussions regarding his own compensation. Our Head of Global Human Resources acts as secretary of the Committee.

The Compensation Committee supports the Board in establishing and reviewing compensation policies. It regularly reviews Company-wide programmes in regard to base salary, pension and benefit plans. The Compensation Committee also regularly reviews and approves annual incentives and share- based long-term incentives, while the applicable performance criteria and targets are set by the Board. The Compensation Committee is also responsible for reviewing and approving individual compensation and benefits of each Executive Committee member as well as recommending compensation for the Board.

The Articles of Incorporation of Givaudan include rules on the principles applicable to performance-related pay and to the allocation of equity securities, convertible rights and options (Arts. 23-25), additional amounts for payments to Executive Committee members appointed after the vote on pay at the shareholders’ meeting (Art. 27), loans, credit facilities and post-employment benefits for the Executive Committee and Board (Arts. 30 and 31) and the vote on pay at the shareholders’ meeting (Art. 26).
> Articles of Incorporation

Key changes implemented during 2016

No changes in respect of Board of Director or Executive Committee compensation system were made in the reporting year.

Overall reported Executive Committee compensation increased due to the reporting of full year compensation for the three Executive Committee members who joined during 2015 and the appointment of a new member in August 2016.

Overall reported Board of Directors’ compensation decreased, which is explained by the reduction of the number of members by one, to eight members. With the establishment of a new Science and Innovation Committee at the beginning of 2016 additional Committee fees according to the Givaudan policy are now applicable.

Compensation of the Executive Committee

In 2016, total compensation reported increased due to the reporting of full year compensation for the three Executive Committee members who joined during 2015 and the appointment of Anne Tayac as Head of Givaudan Business Solutions in August 2016.

No other compensation or fees were accrued for or paid to any member or former member of the Executive Committee during the reporting period. No member or former member of the Executive Committee or related parties had any loan outstanding as of 31 December 2016

Adrien Gonckel retired from his role as Chief Information Officer on 1 August 2016. He did not receive any special compensation as a result of his retirement

The fixed and long term variable compensation approved for 2016 was CHF 19,800,000
(2015: CHF 15,500,000).

The annual incentive, short term variable compensation for 2016 was CHF 3,287,520 and will be submitted for approval at the 2017 Annual General Meeting (2015: CHF 2,392,716).

in Swiss francs

Gilles Andrier
CEO 2016

Gilles Andrier
CEO 2015

Executive Committee members (excluding CEO) 1 2016

Executive Committee members (excluding CEO) 2 2015

Total
2016

Total
2015

- Base salary

 1,035,599

 1,027,689

 3,819,306

 2,662,741

 4,854,905

 3,690,430

- Pension benefits 3

 442,705

 459,199

 1,558,506

 1,119,563

 2,001,211

 1,578,762

- Other benefits 4

 111,061

 100,616

 792,134

 591,992

 903,195

 692,608

Total fixed compensation

 1,589,365

 1,587,504

 6,169,946

 4,374,296

 7,759,311

 5,961,800

- Annual incentive 5

 944,804

 854,544

 2,342,717

 1,538,172

 3,287,521

 2,392,716

- No. of performance shares granted 6

 1,686

 1,446

 5,441

 4,396

 7,127

 5,842

- Value at grant 7

 2,882,048

 2,307,671

 9,300,845

 7,015,576

 12,182,893

 9,323,247

Total variable compensation

 3,826,852

 3,162,215

 11,643,562

 8,553,748

 15,470,414

 11,715,963

Total compensation

 5,416,217

 4,749,719

 17,813,508

 12,928,044

 23,229,725

 17,677,763

 

 

 

 

 

 

 

Employer social security 8

 438,000

 382,000

 1,427,000

 1,064,000

 1,865,000

 1,446,000

1. Represents full year compensation of eight Executive Committee members and partial year compensation of the new Executive Committee member in 2016. Adrien Gonckel retired from his role as Chief Information Officer on 1 August 2016. Part of his total compensation for 2016 relates to the period from the time he ceased to be an EC member until 31 December 2016.
2. Represents full year compensation of five Executive Committee members and partial year compensation of the three new Executive Committee members in 2015.
3. Company contributions to broad-based pension and retirement savings plans and annualised expenses accrued for supplementary executive retirement benefit.
4. Represents annual value of health and welfare plans, international assignment benefits and other benefits in kind.
5. Annual incentive accrued in reporting period based on 2016 performance.
6. 2016 Performance shares vest on 15 April 2019, 2015 Performance shares vest on 31 March 2018.
7. Value at grant calculated according to IFRS methodology and based on 100% achievement of performance targets.
8. 2016 estimated social security charges based on 2016 compensation; 2015 estimated social security charges based on 2015 compensation.

 

Compensation of the Board of Directors

Compensation of Board members consists of Director fees, Committee fees and restricted share units (RSUs). Fees are paid at the end of each year in office completed. RSUs give participants the right to receive Givaudan shares (or a cash equivalent in countries where securities laws prevent the offering of Givaudan securities) at the end of a three-year vesting period.

With the exception of the Chairman and outgoing Board members, each Board member receives an additional amount of CHF 10,000 to cover out-of-pocket expenses. This amount is paid for the coming year in office. The equity awards are also granted for the same period.

No additional compensation or fees were paid to any member of the Board. No Board member or related parties had any loan outstanding as of 31 December 2016. No special compensation of members of the Board who left the Company during the reporting period was incurred during the reporting period.

The compensation paid to the Board members for the period between the 2015 and 2016 Annual General Meetings is within the amount approved by shareholders at the 2015 Annual General Meeting (CHF 3,300,000). Amounts approved at the 2016 Annual General Meeting (CHF 3,300,000) will be paid by the end of the year in office and validated in the 2016 Compensation Report. Such approved and paid amounts will differ from those shown in the Board of Directors compensation summary table which, according to the OaEC, must include compensation paid in the reporting year.

 

2016

in Swiss francs

Dr Jürg Witmer Chairman
7

André Hoffmann
6,7

Victor
Balli
5,7

Prof. Dr-Ing. Werner Bauer
7

Lilian
Biner
7

Michael Carlos
7

Ingrid Deltenre
7

Calvin Grieder
7

Peter Kappeler
6,7

Thomas Rufer
7

Total
2016
1

Director fees 2

 400,000

 25,000

 75,000

 100,000

 100,000

 100,000

 100,000

 100,000

 25,000

 100,000

 1,125,000

Committee fees 2

 40,000

 10,000

 18,750

 65,000

 50,000

 40,000

 50,000

 50,000

 6,250

 55,000

 385,000

Total fixed (cash)

 440,000

 35,000

 93,750

 165,000

 150,000

 140,000

 150,000

 150,000

 31,250

 155,000

 1,510,000

Number of RSUs granted 3

 340

 

 85

 85

 85

 85

 85

 85

 

 85

 935

Value at grant 4

 581,196

 

 145,299

 145,299

 145,299

 145,299

 145,299

 145,299

 

 145,299

 1,598,289

Total compensation

 1,021,196

 35,000

 239,049

 310,299

 295,299

 285,299

 295,299

 295,299

 31,250

 300,299

 3,108,289

1. Represents total compensation for the Board of Director paid in respect of the reporting year, reported in accordance with the accrual principle.
2. Represents Director and Committee fees paid in respect of the reporting year, reported in accordance with the accrual principle.
3. RSUs vest on 15 April 2019.
4. Economic value at grant according to IFRS methodology, with no discount applied for the vesting period.
5. Elected at the Annual General Meeting in March 2016.
6. Retired at the Annual General Meeting in March 2016.
7. The function of each member of the Board of Directors are indicated on pages 80-84 in the Corporate Governance section of the 2016 Annual Report.

 

Estimated social security charges based on 2016 compensation amounted to CHF 221,000 (2015: CHF 232,000).
In addition to the above, payments to Board members for out-of-pocket expenses amounted to CHF 70,000 (2015: CHF 80,000).

2015

in Swiss francs

Dr Jürg Witmer Chairman
7

André Hoffmann
7

Prof. Dr-Ing. Werner Bauer
7

Lilian
Biner
7

Michael Carlos
5,7

Ingrid Deltenre
5,7

Calvin Grieder
7

Peter Kappeler
7

Thomas Rufer
7

Nabil
Sakkab 
6,7

Total
2015
1

Director fees 2

 400,000

 100,000

 100,000

 100,000

 75,000

 75,000

 100,000

 100,000

 100,000

 25,000

 1,175,000

Committee fees 2

 40,000

 40,000

 25,000

 31,250

 18,750

 18,750

 25,000

 25,000

 55,000

 6,250

 285,000

Total fixed (cash)

 440,000

 140,000

 125,000

 131,250

 93,750

 93,750

 125,000

 125,000

 155,000

 31,250

 1,460,000

Number of RSUs granted 3

 364

 91

 91

 91

 91

 91

 91

 91

 91

 

 1,092

Value at grant 4

 580,908

 145,227

 145,227

 145,227

 145,227

 145,227

 145,227

 145,227

 145,227

 

 1,742,724

Total compensation

 1,020,908

 285,227

 270,227

 276,477

 238,977

 238,977

 270,227

 270,227

 300,227

 31,250

 3,202,724

1. Represents total compensation for the Board of Director paid in respect of the reporting year, reported in accordance with the accrual principle.
2. Represents Director and Committee fees paid in respect of the reporting year, reported in accordance with the accrual principle.
3. RSUs vest on 31 March 2018.
4. Economic value at grant according to IFRS methodology, with no discount applied for the vesting period.
5. Elected at the Annual General Meeting in March 2015.
6. Retired at the Annual General Meeting in March 2015.
7. The function of each member of the Board of Directors are indicated on pages 74-78 in the Corporate Governance section of the 2015 Annual Report.

 

Ownership of Givaudan securities

Executive Committee

The Chief Executive Officer and other members of the Executive Committee, including persons closely connected to them, held 4,460 Givaudan shares. For further details, please refer to table below showing:

  • The shares held individually by each member of the Executive Committee as per 31 December 2016.
  • The unvested performance shares that were granted in 2014–2016 and were still owned by members of the Executive Committee as per 31 December 2016.

No member of the Executive Committee held any share options or option rights as at 31 December 2016 (31 December 2015: no member of the Executive Committee held any share options or option rights).

Two people closely connected to members of the Executive Committee owned Givaudan securities as at 31 December 2016: one person owned 859 shares; one person owned 264 unvested performance shares.

The Company is not aware of any other ownership of shares, share options/option rights, RSUs or performance shares as per 31 December 2016 by persons closely connected to members of the Executive Committee.

Executive Committee: ownership of Givaudan securities

 

2016

in numbers

Shares

Unvested
performance shares

Gilles Andrier, CEO

2,400

5,032

Matthias Währen

300

3,293

Mauricio Graber

550

2,929

Maurizio Volpi

486

1,710

Joe Fabbri

100

2,287

Simon Halle-Smith

 

943

Willem Mutsaerts

56

1,312

Anne Tayac

104

529

Chris Thoen

464

1,243

Total 2016

4,460

19,278

Total 2015

3,575

21,845

 

Board of Directors

As per 31 December 2016, the Chairman and other Board members, including persons closely connected to them held 5,546 Givaudan shares in total. For further details, please refer to table below showing:

  • The shares held individually by each Board member as per 31 December 2016
  • The RSUs that were granted in 2014-2016 and were still owned by members of the Board as per 31 December 2016

The Company is not aware of any other ownership of shares, share options/option rights, RSUs or performance shares as per 31 December 2016 by persons closely connected to members of the Board.

Board of Directors: ownership of Givaudan securities

 

2016

in numbers

Shares

Unvested RSUs

Dr Jürg Witmer, Chairman

1,500

1,180

Victor Balli

 

85

Prof. Dr-Ing. Werner Bauer

970

295

Lilian Biner

377

295

Michael Carlos 1

2,083

176

Ingrid Deltenre

26

176

Calvin Grieder

 

295

Thomas Rufer

590

295

Total 2016

5,546

2,797

Total 2015

93,901

3,526

1. Mr Carlos also held 1,750 unvested performance shares as per 31 December 2016 granted to him during his tenure as an Executive Committee member.