A competitive compensation package

The compensation policies are a key driver of the Company’s organisational performance and are thus aligned to our strategy and reflect the performance of the business and of individuals.

We have rigorous governance policies and processes to ensure that our compensation practices are aligned with our principles of integrity, fairness and transparency. Benchmarking studies are conducted regularly and salaries are reviewed taking into account macroeconomic data such as cost of living and market evolution.

For executives and all employees, our competitive remuneration policy is based on the following principles:

Pay
for performance

Alignment
of interests

External
competitiveness

Internal
consistency and fairness

Through our variable pay plans, employees participate in the Company’s overall success and are rewarded for their contribution to business results. Givaudan seeks to align management and shareholders’ interests by rewarding long-term value creation through share-based programmes. Overall compensation positioning should enable Givaudan to attract and retain highly talented individuals critical to its success. Internal consistency and fairness: internal pay scales reflect job level, function and geographic market.

 

Givaudan’s total compensation in 2019 is composed of the following elements:

  • Base salary: base salaries are regularly benchmarked in each location and pay scales are reviewed annually according to local market evolution. As a general rule, pay scales are built around market median.
     
  • Profit Sharing Plan: non-management employees participate in the global Profit Sharing Plan. Payouts are based on yearly evolution of Group EBITDA.
     
  • Annual Incentive Plan: this plan covers all managers and executives globally. It rewards participants for the achievement of financial targets and other organisational and individual objectives. Depending on the achievement of performance criteria, payouts can vary between 0% and 200% of target payout.
     
  • Performance Share Plan (PSP): this plan links executives and selected manager compensation to the evolution of the Givaudan share price and long-term business objectives through the award of Performance Shares. Depending on the achievement of performance criteria, participants may receive between zero and two Givaudan shares per performance share at the end of the three-year vesting period.
     
  • Benefits (indirect compensation): benefit plans seek to address current and future security needs of employees. These generally include retirement, health, death and disability benefits. Benefits-in-kind such as Company vehicles are offered to certain employees according to local market practice.  

Compensation of the Executive committee

Total Executive Committee compensation reported in 2019 remained stable compared to 2018, representing full year compensation for seven members (including the CEO). 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 2019.

The compensation paid is within the amounts approved by shareholders in the respective Annual General Meeting. The fixed and long term variable compensation approved for 2019 was CHF 15,000,000 (2018: CHF 17,000,000).

The annual incentive, short term variable compensation amount for 2019 was CHF 4,269,632 and will be submitted for approval at the 2020 Annual General Meeting (2018: CHF 2,778,103).

Executive Committee compensation summary
 

in Swiss francs
Gilles
Andrier
CEO 2019
Gilles
Andrier
CEO 2018
Executive Committee members (excluding CEO) 1 2019 Executive Committee members (excluding CEO) 2 2018

Total
2019

Total
2018

Base salary 1,167,910 1,058,023 3,191,433 3,194,282 4,359,343 4,252,305
Pension benefits 3 577,527 571,766 1,005,412 947,880 1,582,939 1,519,646
Other benefits 4 141,730 139,048 562,795 819,837 704,525 958,885

Total fixed compensation

1,887,167

1,768,837

4,759,640

4,961,999

6,646,807

6,730,836

Annual incentive 5 1,438,925 954,070 2,830,707 1,824,033 4,269,632 2,778,103
Number of performance shares granted 6 1,092 1,446 2,448 3,263 3,540 4,709
Value at grant 7 2,500,243 2,882,312 5,604,941 6,504,138 8,105,184 9,386,450

Total variable compensation

3,939,168

3,836,382

8,435,648

8,328,171

12,374,816

12,164,553

 

 

 

 

 

 

 

Total compensation

5,826,335

5,605,219

13,195,288

13,290,170

19,021,623

18,895,389

             
Employer social security 8 471,214 453,000 989,482 988,000 1,460,696 1,441,000

 

1 Represents full year compensation of six Executive Committee members.
2 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. 
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 2019 Performance shares vest on 15 April 2022, 2018 Performance Shares vest on 15 April 2021. 
7 Value at grant calculated according to IFRS methodology and based on 100% achievement of performance targets. 
8 2019 estimated social security charges based on 2019 compensation; 2018 estimated social security charges based on 2018 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 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.

The compensation paid to the Board members for the period between the 2018 and 2019 Annual General Meetings (CHF 2,830,139) is again within the amount approved by shareholders at the 2018 Annual General Meeting (CHF 2,950,000). Amounts approved at the 2019 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
 

2019

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
2019
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

252

63

  63

  63

  63

 63

63

      630

Value at grant 4

576,980

144,245

144,245

144,245

144,245

144,245

144,245

1,442,450

Total compensation

1,041,980

294,245

309,245

269,245

309,245

294,245

299,245

 2,817,450

 

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 2022. 
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 is indicated on pages 5-6 in the 2019 Governance report. 
Estimated social security charges based on 2019 compensation amounted to CHF 233,000 (2018: CHF 203,000). 

 

Ownership of Givaudan securities

Executive Committee

The Chief Executive Officer and other members of the Executive Committee, including persons closely connected to them, held 5,265 Givaudan shares.

No member of the Executive Committee held any share options or option rights as at 31 December 2019 (31 December 2018: 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 256 unvested Performance Shares as at 31 December 2019.

The Company is not aware of any other ownership of shares, share options/option rights, RSUs or Performance Shares as per 31 December 2019 by persons closely connected to members of the Executive Committee.

2019

in numbers

Shares

Unvested
Performance Shares

Gilles Andrier, CEO

3,100

4,315

Tom Hallam

328

1,541

Louie D'Amico

275

1,258

Maurizio Volpi

634

2,156

Simon Halle-Smith

452

1,278

Willem Mutsaerts

351

1,278

Anne Tayac

125

1,247

Total 2019

5,265

13,073

Total 2018

5,097

13,776

 

Board of Directors

As per 31 December 2019, the Chairman and other Board members, including persons closely connected to them held Givaudan shares in total 4,501 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 2019 by persons closely connected to members of the Board.

2019

in numbers

Shares

Unvested RSUs

Calvin Grieder, Chairman 295 904
Victor Balli 85 226
Prof. Dr-Ing. Werner Bauer 1,265 226
Lilian Biner 672 226
Michael Carlos 1,097 226
Ingrid Deltenre 202 226
Thomas Rufer 885 226

Total 2019

4,501

2,260

Total 2018 3,906 2,225