Votes on compensation at the 2018 AGM

As illustrated in Exhibit 18, the Board’s proposals to shareholders at the 2018 AGM will relate to Board compensation for the 2018–2019 term of office and EC compensation for the calendar year 2019. There will also be a non-binding vote on the 2017 Compensation report.

Exhibit 18: Shareholders will have three separate votes on compensation at the 2018 AGM
Shareholders will have three separate votes on compensation at the 2018 AGM (graphic)

In determining the proposed maximum aggregate EC compensation, the Board takes into consideration the criteria illustrated in Exhibit 19. Given the variable nature of a major portion of the compensation components, the proposed maximum aggregate EC compensation will almost always be higher than the actual payout, as it must cover the potential maximum value of each component of compensation.

Exhibit 19: Overview of key factors affecting the determination of maximum aggregate EC compensation
Overview of key factors affecting the determination of maximum aggregate EC compensation (graphic)

(1) Numbers will be provided in the AGM invitation.

(2) For full description, see section “Executive Committee compensation” and section “Outlook: changes to compensation system for 2018.”

(3) Excluding one-time share grant for incoming CFO as replacement of benefits foregone from his previous employer.

(4) This 12.5 percent applied on the entire LTIP is equivalent to 25 percent applied to the P1 component in the design of the 2017 LTIP.

The Board’s proposal for maximum aggregate EC compensation for 2019 will incorporate assumptions for a normal increase in compensation.