Date: 7 November 2014 IMPLEMENTATION OF THE MINDER INITIATIVE ANNUAL GENERAL MEETINGS IN 2014 T O P 1 4 1 S P I C O M P A N I E S
COMPANIES INCLUDED IN THE ANALYSIS 141 companies of the SPI including SMI, SLI and SMIM (smaller companies are not analyzed by proxy advisors): Companies analyzed Page 2
COMPANIES INCLUDED IN THE ANALYSIS Company Index Company Index Company Index Company Index Company Index ABB SMI/SLI Swiss Prime Site SLI/SMIM Bell SPI Implenia SPI Romande Energie SPI Actelion SMI/SLI Aryzta SMIM Bellevue SPI Inficon SPI Schaffner SPI Adecco SMI/SLI Barry Callebaut SMIM Berner KB SPI Interroll SPI Schmolz + Bickenbach SPI Credit Suisse SMI/SLI DKSH SMIM BKW SPI Intershop SPI Schweiter Technologies SPI Geberit SMI/SLI EMS Chemie SMIM Bobst SPI Kaba SPI Siegfried SPI Givaudan SMI/SLI Galenica SMIM Bossard SPI Kardex SPI St. Galler KB SPI Holcim SMI/SLI GAM SMIM Bucher SPI Komax SPI Starrag Group SPI Julius Bär SMI/SLI Georg Fischer SMIM Burckhardt Compression SPI Kudelski SPI Swiss Finance & Property Inv. SPI Nestle SMI/SLI Helvetia SMIM Burkhalter SPI Kuoni Reisen SPI Swisslog SPI Novartis SMI/SLI Lindt SMIM Calida SPI LEM SPI Swissquote SPI Richemont SMI/SLI Logitec SMIM Cembra Money Bank SPI Leonteq SPI Tamedia SPI Roche SMI/SLI Nobel Biocare SMIM CFG SPI Looser SPI Tecan SPI SGS SMI/SLI OC Oerlikon SMIM Charles Vögele SPI Luzerner KB SPI Tornos SPI Swatch SMI/SLI Partners Group SMIM Coltene SPI MCH SPI u-blox SPI Swisscom SMI/SLI PSP SMIM Comet SPI Metall Zug SPI Valiant SPI SwissRe SMI/SLI Straumann SMIM Conzzeta SPI Meyer Burger SPI Valora SPI Syngenta SMI/SLI Sulzer SMIM CPH Chemie & Paper SPI Micronas SPI Vaudoise Assurances SPI Transocean SMI/SLI Temenos SMIM Dätwyler SPI mobilezone SPI Vetropak SPI UBS SMI/SLI Advanced Digital Broadcast SPI EFG International SPI Mobimo SPI Von Roll SPI Zurich Financial Services SMI/SLI AFG Arbonia Forster SPI Emmi SPI Nationale Suisse SPI Vontobel SPI Baloise SLI/SMIM Allreal SPI Evolva SPI Orascom SPI VZ Holding SPI Clariant SLI/SMIM ALSO SPI Flughafen Zurich SPI Orell Füssli SPI Walter Meier SPI Dufry SLI/SMIM APG SPI Forbo SPI Orior SPI Zehnder SPI Kühne + Nagel SLI/SMIM Ascom SPI gategroup SPI Panalpina SPI Züblin Immobilien SPI Lonza SLI/SMIM Autoneum SPI Goldbach SPI Pargesa SPI Zug Estates SPI Schindler SLI/SMIM Bachem SPI Gurit SPI Peach Property Group SPI Sika SLI/SMIM Bank Coop SPI Huber & Suhner SPI Phoenix Mecano SPI Sonova SLI/SMIM Basilea SPI Hügli SPI PubliGroupe SPI Swiss Life SLI/SMIM Belimo SPI Hypothekarbank Lenzburg SPI Rieter SPI Page 3
ELEMENTS ANALYZED Changes to the Articles of Association (AoA) submitted to the Annual General Meeting (AGM) in 2014 Structure of the binding Say-on-Pay (SoP) vote as defined in the new AoA SoP vote structure for the 2014 AGM Number of external mandates for Board members and Executives Non-competition agreements Voting recommendations of proxy advisors Voting results at 2014 AGM Page 4
LEVEL OF IMPLEMENTATION OF THE MINDER INITIATIVE AT THE 2014 AGM S: ALL COMPANIES 70% of companies have implemented the provisions of the Ordinance VegüV at their 2014 AGM In the larger companies (SMI, SLI and SMIM), the non-implementation rate is around 20%- 25%. In smaller companies, around 30% have not yet implemented Few companies have not yet published their invitation to the AGM, therefore for them the information is missing ( no info ) Page 5
LEVEL OF IMPLEMENTATION OF THE MINDER INITIATIVE AT THE 2014 AGMS: BY INDEX Page 6
STRUCTURE OF THE S OP FOR BOARD COMPENSATION Two thirds of all companies implemented a prospective vote on compensation for the period from AGM to AGM 94% of companies implement a prospective vote The tendency is the same across the SMI, SLI, SMIM and SPI index The chart does not include companies that have not yet published their invitation to the AGM or that did not implement Minder yet ( n/a companies) Page 7
STRUCTURE OF THE SOP FOR EXECUTIVE COMPENSATION 76% of all companies implemented a prospective vote Prospective vote is the most prevalent choice: 60% SMI 63% SLI 70% SMIM 81% SPI Compensation period is typically the next fiscal year Does not include n/a companies Page 8
SOP VOTE AT THE 2014 AGM: ALL COMPANIES 36% of companies do not hold any SoP vote at their 2014 AGM, while 35% hold a consultative vote on the compensation report Bigger companies hold an SoP vote in 2014: 95% in the SMI 90% in the SLI 72% in the SMIM 55% in other companies Does not include n/a companies Page 9
SOP VOTE AT THE 2014 AGM: BY INDEX Page 10
NON COMPETITION CLAUSES IN THE AoA 42% of companies included a provision on non-compete agreements, with a time limit of typically 1 year Non-competition clauses which are not limited in time are criticized by the proxy advisors (potential hidden severance payments) 58% of the companies did not provide a provision for noncompetition agreement in their AoA Does not include n/a companies Page 11
NON COMPETITION CLAUSES IN THE AoA: ALL COMPANIES The amount of compensation provided during the period of non-competition varies from 50% to 100% of annual total compensation The most prevalent limit is 100% of annual fixed compensation for each year of the noncompete, which is in line with the guideline of most proxy advisors However, companies of the SMI and SLI tend to go for 100% of annual total compensation Does not include n/a companies Page 12
NON COMPETITION CLAUSES IN THE AoA: BY INDEX Page 13
NUMBER OF EXTERNAL MANDATES BOARD MEMBERS Most companies limit the number of additional external mandates in other listed companies to 4 or 5 SMI and SLI companies are stricter, with a typical limit at 4 additional mandates in listed companies (clear separation between listed, non-listed and charitable org.) Smaller companies may not have defined any split for external mandates Does not include n/a companies Page 14
NUMBER OF EXTERNAL MANDATES EXECUTIVES Most companies limit the number of additional external mandates in other listed companies to 1 Same trend in the SMI, SLI, SMIM and SPI Smaller companies may not have defined any split for external mandates Does not include n/a companies Page 15
PROXY ADVISORS VOTING RECOMMENDATION Level of positive voting recommendations by proxy advisor: ISS Ethos zcapital SWIPRA SMI SLI SMIM SPI Total AoA (provisions on compensation) 60% SoP 72% AoA (provisions on compensation) 33% 33% 28% 30% 30% SoP 21% 33% 35% 61% 47% AoA (provisions on compensation) 87% 79% 58% 50% 57% SoP 42% 44% 59% 80% 68% AoA (provisions on compensation) 80% 83% 72% 76% SoP 63% 67% 71% 67% AoA: more rejections for smaller companies (SMIM, SPI): Likely to have invested less time in developing their AoA (less detailed) SoP: more rejections for bigger companies (SMI, SLI) Levels of compensation are higher in those companies If one element of the SoP vote was rejected, it is counted as a no Only includes companies for which the proxy advisors have published their recommendations Page 16
VOTING RESULTS AT AGM All companies but three have gotten their Articles of Association approved by the AGM All companies have gotten approval on the compensation report All companies have gotten approval for the compensation amount for the Board and Executives Average in SMI Average in SLI Average in SMIM Voting results AoA Voting result Comp Report Voting result Comp Board Voting result Comp Executives 86% 85% 86% 92% 85% 87% 90% 93% 81% 90% 86% 91% Average in SPI 84% 91% 92% 91% Page 17
ADDITIONAL INFORMATION AND DISCLAIMER Detailed overview by company can be found at www.agnesblustconsulting.com/news.html This analysis has been developed by Agnès Blust Consulting on the basis of the published invitations to the Annual General Meetings in 2014. Agnes Blust Consulting makes this overview available to clients and other third parties on a complimentary basis. In no event shall Agnès Blust Consulting be liable to any party for the accuracy, completeness or usefulness of the data presented here or for any cost or damages arising out of or in connection with the use of this information Page 18