On behalf of the Board of Directors and as Chairman of the Compensation & Nomination Committee (CNC), I am pleased to present you with the Compensation Report for the financial year 2022.
Since the General Meeting 2015, the General Meeting has approved in separate votes the proposals of the Board of Directors for the maximum aggregate compensation for the members of the Board of Directors until the next Annual General Meeting, and for the maximum aggregate compensation for Group Management for the respective forthcoming financial year. The Compensation Report for the previous financial year is also submitted to the shareholders for approval by means of a non-binding advisory vote. At the General Meeting 2022, you expressed your support for the Board of Directors and the CNC’s activities, as well as all compensation-related resolutions proposed. In this regard, I would like to thank you on behalf of the entire Board of Directors for your continued trust.
In the course of 2022, the CNC on behalf of the Board of Directors carefully reviewed the compensation framework, including its elements, structure, and processes, with the aim of matching the opted compensation approach to Lindt & Sprüngli’s internal values and priorities. For example, the Board of Directors, on the recommendation of the CNC, has made it a priority in the upcoming year to further strengthen Lindt & Sprüngli’s performance culture and to further align the pay-for-performance philosophy inherent in our variable compensation elements and the compensation of the Group Management to the strategy and shareholder interests of the Lindt & Sprüngli Group.
As a result of this review, the Board of Directors, on the recommendation of the CNC, has decided on certain advancements to the compensation framework of the Lindt & Sprüngli Group. In this Compensation Report, the Board of Directors provides further explanations of the general compensation framework and a more transparent disclosure related to the Group Management compensation. Changes have in particular been made within the following topic areas:
- Key performance indicators (KPIs) for allocations under the short-term performance-based compensation (Cash Bonus) and grants under the long-term performance-based compensation (Option Plan)
- Ex-post disclosure regarding the achievements of performance targets for the Cash Bonus
- Possible grant levels and payout opportunities with respect to the Cash Bonus and under the Option Plan
- Performance considerations under the Option Plan
While certain disclosure-related enhancements have been implemented already in this Compensation Report, more fundamental changes to the underlying compensation framework will become applicable as of 2023. More details on these changes and the underlying motivation are provided in the chapter “Summary of advancements to the compensation framework for 2022 & 2023” and the chapter “Outlook to the compensation framework 2023”.
Moreover, the Board of Directors and the CNC have reviewed their own internal governance processes. The Board of Directors will propose to the General Meeting that as of the Annual General Meeting 2023, the CNC will be composed of at least three members of which the chairperson and one additional member should fulfill Lindt & Sprüngli’s independence criteria. For more details regarding the CNC, please also refer to the updated charter of the CNC (CNC Charter) which is in effect since December 1, 2022.
The Board of Directors is convinced that this Compensation Report 2022 gives you, our valued shareholders, a comprehensive and integral overview of the compensation of the Group Management and the Board of Directors. We are looking forward to engaging with you and receiving your feedback at the upcoming AGM. On behalf of the entire CNC and the Board of Directors, I would also like to thank each member of our global team for their commitment and achievements.
Compensation Report 2022
The Compensation Report describes the underlying basics, governing principles, and elements of the compensation of the Group Management and the Board of Directors of the Lindt & Sprüngli Group (Lindt & Sprüngli) and also contains information on the actual compensation paid to the members of the Board of Directors and Group Management. The information provided refers in each case to the financial year ending on December 31, 2022 (where required with comparative figures for the previous financial year). The Compensation Report incorporates the disclosure obligations set out in Article 734 et seqq. OR (formerly Article 14 et seqq. VegüV and Article 663c para 2 OR), which entered into force on January 1, 2023 (in each case if and as applicable), the requirements of Section 5 of the Annex to the Directive on Information relating to Corporate Governance (Corporate Governance Directive) of SIX Swiss Exchange, and the recommendations of the “Swiss Code of Best Practice for Corporate Governance” issued by economiesuisse in the version published on February 6, 2023.
This Compensation Report is structured as follows:
I. Summary of advancements to the compensation framework for 2022 & 2023
II. Compensation Governance 2022
III. Compensation of the Board of Directors 2022
IV. Compensation of the Group Management 2022
i. Compensation goals and principles
ii. Compensation framework
iii. Compensation elements
VI. Other compensation-related aspects
i. Supplementary amount
ii. Employment contracts
iii. Additional fees, compensation, and loans to governing bodies
iv. Compensation to former members of corporate bodies
VII. External mandates of the members of the Board of Directors and Group Management
VIII. Outlook to the compensation framework 2023