engage your senses

Compensation

Attract, motivate and retain

Givaudan aims to attract, motivate and retain a diverse pool of highly talented people to sustain its leadership position within the flavour and fragrance industry. 

The Compensation Committee supports the Board of Directors (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 annually reviews and approves the performance targets and related payouts under the annual incentives and share-based long-term incentives, while the applicable performance criteria 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 Compensation Committee consists of three independent members of the Board and is currently chaired by Prof. Dr-Ing. Werner Bauer. The Chief Executive Officer is regularly invited to Compensation Committee meetings. The Head of Global Human Resources acts as secretary of the Compensation Committee. The Chairman of the Compensation Committee may invite other executives as appropriate. However, executives do not participate in discussions regarding their own compensation.

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).

Specific activities in 2018

As previously reported, the Compensation Committee undertook a comprehensive review of the Performance Share Plan in 2017. Accordingly, changes to the PSP payout matrix were introduced in 2018. Further details are provided in section 3.7 in the 2018 Compensation Report.

In 2018 as part of the regular annual process outlined above, the Compensation Committee reviewed the compensation levels and decided to implement some changes to the compensation mix from 2019. The changes have been decided upon with due consideration of our compensation principles outlined in section 2. Further information on the rationale for the changes is detailed in section 3.3 in the 2018 Compensation Report.

Finally and as indicated in section 3.8 in the 2018 Compensation Report, in 2018 Givaudan benefit plans for all employees were reviewed and changes implemented to reflect market practice and better ensure future pension entitlements.

Compensation of the Executive Committee

In 2018, total compensation reported remained stable compared to 2017 on a per Executive Committee member basis. In 2018, the overall total Executive Committee compensation reduced due to the smaller Executive Committee size, i.e. 9.5 full time equivalent members in 2017 versus 7.9 full time equivalent members in 2018 (including the CEO and taking into consideration partial year compensation for those members who left and joined the Executive Committee).

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 2018.

Members of the Executive Committee that stepped down during 2018 did not receive any special compensation as a result of their departure from the Company.  

Executive Committee compensation summary
 

in Swiss francs

Gilles Andrier
CEO 2018

Gilles Andrier
CEO 2017

Executive Committee members (excluding CEO) 1 2018

Executive Committee members (excluding CEO) 2 2017

Total
2018

Total
2017

Base salary

1,058,023

1,045,952

3,194,282

3,970,375

4,252,305

5,016,327

Pension benefits 3

571,766

445,076

947,880

1,048,011

1,519,646

1,493,087

Other benefits 4

139,048

114,688

819,837

800,451

958,885

915,139

Total fixed compensation

1,768,837

1,605,716

4,961,999

5,818,837

6,730,836

7,424,553

Annual incentive 5

954,070

977,142

1,824,033

2,513,556

2,778,103

3,490,698

Number of performance shares granted 6

1,446

1,777

3,263

5,549

4,709

7,326

Value at grant 7

2,882,312

2,881,583

6,504,138

8,998,258

9,386,450

11,879,841

Total variable compensation

3,836,382

3,858,725

8,328,171

11,511,814

12,164,553

15,370,539

Total compensation

5,605,219

5,464,441

13,290,170

17,330,651

18,895,389

22,795,092

 

 

 

 

 

 

 

Employer social security 8

453,000

442,000

988,000

1,413,000

1,441,000

1,855,000

1
 
Represents (a) full year compensation of five Executive Committee members, (b) partial year compensation of two outgoing members  and c) partial year compensation of the new Flavour Division President.
2
 
Represents full year compensation of eight Executive Committee members and partial year compensation of one outgoing Executive Committee member.
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 performance in the reporting period.
6 2018 Performance shares vest on 15 April 2021, 2017 Performance shares vest on 15 April 2020.
7 Value at grant calculated according to IFRS methodology and based on 100% achievement of performance targets.
8
 
2018 estimated social security charges based on 2018 compensation; 2017 estimated social security charges based on 2017 compensation.

 

The fixed and long term variable compensation approved for 2018 was CHF 17,000,000 (2017: CHF 19,800,000).

The annual incentive, short term variable compensation amount for 2018 was CHF 2,778,103 and will be submitted for approval at the 2019 Annual General Meeting (2017: CHF 3,490,698).

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 blocking period. During this period Board members must hold RSUs (accordingly are restricted from trading RSUs or the underlying Givaudan shares), thereby aligning with shareholder interests over the longer term. Board members are entitled to receive Givaudan shares regardless of membership status so that, for example, if re-election does not occur during the restriction period, awarded RSUs are retained by the respective Board member. Such practice has been implemented in line with best practice in support of Givaudan’s commitment to ensuring Board independence.

The Chairman of the Board does not receive any additional Board Membership fees. Similarly, a Committee Chairman does not receive any additional Committee Membership fees. 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 RSUs 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 2018.

During the reporting period, no special compensation of members of the Board who left the Company during the reporting period was incurred.

The compensation paid to the Board members for the period between the 2017 and 2018 Annual General Meetings (CHF 2,834,440) is again within the amount approved by shareholders at the 2017 Annual General Meeting (CHF 2,950,000). Amounts approved at the 2018 Annual General Meeting (CHF 2,950,000) will be paid by the end of the year in office and validated in the 2019 Compensation Report. Such approved and paid amounts will differ from those shown in the Board compensation summary table which, according to the OaEC, must include compensation paid in the reporting year.  

Board of Directors compensation summary
 

2018
in Swiss francs

Calvin Grieder Chairman
5

Victor
Balli
5

Prof. Dr-Ing. Werner Bauer
5

Lilian
Biner
5

Michael Carlos
5

Ingrid Deltenre
5

Thomas Rufer
5

Total
2018
 1

Director fees 2

400,000

100,000

100,000

100,000

100,000

100,000

100,000

1,000,000

Committee fees 2

65,000

50,000

65,000

25,000

65,000

50,000

55,000

375,000

Total fixed (cash)

465,000

150,000

165,000

125,000

165,000

150,000

155,000

1,375,000

Number of RSUs granted 3

292

73

73

73

73

73

73

730

Value at grant 4

582,044

145,511

145,511

145,511

145,511

145,511

145,511

1,455,110

Total compensation

1,047,044

295,511

310,511

270,511

310,511

295,511

300,511

2,830,110

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 blocking period ends on 15 April 2021.
4 Economic value at grant according to IFRS methodology, with no discount applied for the blocking period.
5 The function of each member of the Board of Directors are indicated on pages 104-105 in the Corporate Governance section of the 2018 Integrated 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 5,097 Givaudan shares.
No member of the Executive Committee held any share options or option rights as at 31 December 2018 (31 December 2017: no member of the Executive Committee held any share options or option rights).

One person closely connected to a member of the Executive Committee owned 279 unvested Performance Shares as at 31 December 2018.

The Company is not aware of any other ownership of shares, share options/option rights, RSUs or Performance Shares as per 31 December 2018 by persons closely connected to members of the Executive Committee.

Executive committee: ownership of Givaudan securities
 

2018
in numbers

Shares

Unvested
performance shares

Gilles Andrier, CEO 2,400 4,909
Tom Hallam 438 1,304
Louie D'Amico 193 1,131
Maurizio Volpi 1,257 2,350
Simon Halle-Smith 260 1,403
Willem Mutsaerts 440 1,418
Anne Tayac 109 1,261

Total 2018

5,097

13,776

Total 2017 6,154 15,945

 

Board of Directors

As per 31 December 2018, the Chairman and other Board members, including persons closely connected to them held 3,906 Givaudan shares in total.

The Company is not aware of any other ownership of shares, share options/option rights, RSUs or Performance Shares as per 31 December 2018 by persons closely connected to members of the Board.

Board of Directors:ownership of Givaudan Securities
 

2018
in numbers

Shares

Unvested
RSUs

Calvin Grieder, Chairman 210 737
Victor Balli   248
Prof. Dr-Ing. Werner Bauer 1,180 248
Lilian Biner 587 248
Michael Carlos 1,012 248
Ingrid Deltenre 117 248
Thomas Rufer 800 248

Total 2018

3,906

2,225

Total 2017 3,360 2,041

 

Full version: Compensation Report – 2018 Integrated Annual Report