1  Responsibilities and procedures for determining compensation

1.1  Responsibilities of the annual general meeting

In accordance with the articles of association, the Board of Directors will, on a yearly basis, submit a binding proposal to the annual general meeting for the total remuneration to be paid to the members of the Board of Directors and the total fixed remuneration (basic salary and employer’s contributions to the management pension plan) to be paid to Group Management for the current financial year.

Furthermore, the total variable remuneration to be paid to Group Management and, where applicable, the Board of Directors for the past financial year is subject to the binding approval of the annual general meeting.

Accordingly, the annual general meeting of 21 April 2017 will vote on the total remuneration to be paid to the Board of Directors and the total fixed remuneration to be paid to Group Management for the 2017 financial year and the total variable remuneration to be paid to Group Management for the 2016 financial year.

If the annual general meeting refuses to approve individual components of remuneration, the Board of Directors may submit a new proposal or convene a new general meeting.

1.2  Responsibilities of the Board of Directors

The Board of Directors will submit yearly to the annual general meeting a compensation report detailing the remuneration paid to the Board of Directors and Group Management in the past year.

1.3  Responsibilities of the Nomination and Compensation Committee

The Nomination and Compensation Committee is responsible for designing, implementing and monitoring the compensation system for the members of the Board of Directors and Group Management by means of internal benchmarking, as well as for all employees (salary policy). This was done without calling on the services of any external consultants. Once a year, the Nomination and Compensation Committee will prepare all the background information required by the Board of Directors as a basis for it decisions and will also draft the proposals to be submitted to the annual general meeting.

The annual general meeting of 15 April 2016 appointed Bruno Bettoni (Chairman) and Dr Ralph-Thomas Honegger (member) to the Nomination and Compensation Committee.