2. Method of setting remuneration

2.1 Responsibilities and processes

In accordance with the provisions of the OaEC, Implenia Ltd.’s Articles of Association give the General Meeting the authority (Art. 15a of the Articles of Association) each year to approve, at the request of the Board of Directors

  • the total remuneration of the Board of Directors for the period up to the next Annual General Meeting and
  • the total remuneration of the executive management, i.e. the Group Executive Board and now the Implenia Executive Committee (IEC), for the next financial year.

These prospective decisions by the General Meeting empower the Board of Directors to pay remuneration within the approved total maximum amounts. In addition, Art. 15a para. 5 of the Articles of Association defines the conditions and the maximum size of the additional sum that can be paid to a member of executive management who is newly appointed during a period for which the General Meeting has already approved the remuneration. According to Art. 15a para. 5 of the Articles of Association, the company is authorised to pay members of executive management who join or take on additional responsibilities during a period for which the executive management’s remuneration has already been approved an additional amount of no more than 50% of the applicable total amount of remuneration paid to the executive management if the overall amount approved for the period in question is insufficient to pay the new members. The additional amount does not have to be approved by the General Meeting and may be used by the company for all types of remuneration. Furthermore, the maximum amount paid to such a member of executive management may not exceed the maximum remuneration paid to the Chief Executive Officer (CEO) in the preceding financial year by more than 25%.

The Board of Directors has, in accordance with the Articles of Association, established a Nomination and Remuneration Committee to assist it with remuneration issues (Art. 21a of the Articles of Association). The duties, tasks and areas of responsibility of the Nomination and Remuneration Committee include:

  • Preparing and recommending succession planning proposals for the Board of Directors and executive management;
  • Recommendations on Implenia Group’s underlying remuneration policy;
  • Recommending remuneration for the Board of Directors (total amount proposed to the General Meeting, individual remuneration the framework of the resolutions of the General Meeting);
  • Recommending the remuneration paid to executive management (total amount proposed to the General Meeting);
  • Recommending individual remuneration for the CEO to the Board of Directors within the framework of the resolutions of the General Meeting;
  • Decision on the individual remuneration paid to other members of executive management upon proposal from the CEO and within the framework of the resolutions of the General Meeting;
  • Regular checks on the evaluation of the CEO’s performance, and checks on the CEO’s evaluation of the other members of executive management, in consultation with the Chairman of the Board of Directors.

The following table provides an overview of the division of responsibilities between the Annual General Meeting (AGM), the Board of Directors (BoD) and the Nomination and Remuneration Committee (NRC):

Issue

NRC

BoD

AGM

Remuneration principles and structure of variable remuneration

Proposal

Approval

Maximum total amount of remuneration for Board of Directors

Proposal

Submission to AGM

Approval

Maximum total amount of remuneration for executive management

Proposal

Submission to AGM

Approval

Individual remuneration for CEO and overall amount for other members of executive management

Proposal

Approval

Aggregate compensation of other members of executive management

Decision

Remuneration paid to individual Members of Board of Directors

Proposal

Approval

Remuneration Report

Proposal

Approval

Consultative vote

2.2 Election, composition and working methods of the Nomination and Remuneration Committee

In accordance with Art. 21a para. 1 of the Articles of Association the Nomination and Remuneration Committee consists of between two and four Members of the Board of Directors, who are elected individually by the General Meeting for a term of one year up to the end of the next Annual General Meeting. Re-election is permitted. The CEO and the Head of Human Resources Group usually attend the meetings of the Nomination and Remuneration Committee as guests and support its work. They do not participate in voting and are not present when their own remuneration is decided or performance appraised.

The primary role of the Nomination and Remuneration Committee is to support and advise. Decision-making authority about proposals submitted to the Annual General Meeting with regard to maximum amounts rests with the Board of Directors.

The Nomination and Remuneration Committee meets as often as the business situation requires but, in accordance with Articles of Association, at least twice a year. At the beginning of the year, the degree to which targets were achieved in the previous year, and the targets for the current year are discussed. The CEO presents a proposal for appraisal and remuneration of members of executive management. The Chairman of the Nomination and Remuneration Committee immediately notifies the Chairman of the Board of Directors about the Committees’ essential discussions and decisions, unless the Chairman of the Board was involved in them, and reports them to the next meeting of the Board of Directors; the she/he is responsible for ensuring that proposals are submitted to the Board of Directors in good time and represents these proposals in the name of the Committee.

The following table shows the members of the Nomination and Remuneration Committee, as well as the number and duration of meetings held in 2018, and the participants:

Nomination and Remuneration Committee

Meetings1

Conference calls2

Total

3

4

Average duration (in hours)

2:25

0:50

Participation

  

Ines Pöschel, Chairman

3

4

Laurent Vulliet, Member

3

4

Martin A. Fischer, Member3

1

3

Chantal Balet Emery, Member4

1

1

1   The Chairman of the Board of Directors and the CEO attended all, the CFO and the Head Human Resources Group attended two meetings.

2   In addition, various supplementary and preparatory meetings and telephone conferences were held, also involving third parties, as well as interviews with candidates.

3   Appointed to the Nomination and Remuneration Committee on 27 March 2018.

4   Resigned from the Board of Directors on 27 March 2018.

It is at the discretion of the Nomination and Remuneration Committee to consult from time to time an external advisor regarding specific remuneration issues. In 2018, the Committee engaged HCM International Ltd. and Korn Ferry / Hay Group with the remuneration review (see section 3.5) and the revision of the remuneration structure in the 2019/20 financial year (see section 3.1).