Remuneration
This Remuneration report was prepared in accordance with the requirements of the Swiss Code of Obligations. The amounts disclosed comprise the overall remuneration granted to the members of the Board of Directors of Alpiq Holding Ltd. and the Executive Board for financial year 2024. Remuneration is recognised in the year of payment. The information in note 5.5 of the consolidated financial statements shows the remuneration in accordance with IFRS.
1 Remuneration governance
As laid down in the Articles of Association, the Annual General Meeting (AGM) approves the overall remuneration amounts for the Board of Directors and the Executive Board annually, separately and with binding effect, for the following financial year. The Board of Directors extends an annual invitation to the AGM to approve the total compensation of the Board of Directors and the Executive Board by means of a separate consultative vote in the reporting year.
Information on remuneration governance can be found in the relevant passages of the Organisational Regulations and is not listed separately here.
Nomination, Remuneration and Strategy Committee (NRSC)
The Nomination, Remuneration and Strategy Committee (NRSC) is a committee of the Company’s Board of Directors formally appointed by the Board of Directors. The committee comprises at least three members of the Board of Directors.
The NRSC focuses on the following three areas:
i) Pre-discussion of the Group strategy before approval by the Board of Directors
ii) Sustainability at Group level, including respective reporting
iii) Employees in general, nominations, remuneration and objectives and rewards
The NRSC meets as often as business requires, at a minimum once a year. In the reporting year, the NRSC held four ordinary meetings and four extraordinary meetings mostly related to corporate strategy and sustainability. The meetings lasted between two and four hours.
The NRSC submits proposals to the Board of Directors for approval and reports verbally on its activities, resolutions, conclusions and recommendations at each meeting of the BoD.
The detailed tasks and duties of the NRSC related to area iii) are:
a) the exercise of its supervisory duty with regard to succession planning for the Executive Board
b) definition and review of remuneration policies, guidelines and performance targets
c) preparation of proposals to the Annual General Meeting on remuneration of the Board of Directors and the Executive Board
d) determination of all further terms and conditions of contract or employment for the Board of Directors
e) approval of other terms and conditions of contract or employment for the CEO (at the Chair’s request) and the Executive Board (at the CEO’s request)
f) assessment and pre-discussion of the corporate strategy for final discussion and approval by the Board of Directors
g) assessment and pre-discussion of all matters related to sustainability, including but not limited to environmental, social and governance aspects, and related reporting for approval by the Board of Directors
The tasks and the duties of the NRSC in the fields of nominations, contracts, terms of employment, objectives and rewards comprise the following in particular:
1. Nominations
Approval of selection criteria and evaluation of the CEO’s proposals to be put to the Board of Directors for nomination of the members of Alpiq Holding Ltd.’s Executive Board.
2. Contracts and terms of employment
Proposal on the remuneration of the individual members of the Board of Directors. Proposal on special conditions and additional remuneration of members serving on the Board of Directors’ committees. Proposal on the general contractual conditions.
Application for total compensation and approval of the other terms and conditions of the CEO’s employment at the Chair and CEO’s request. Proposal on the overall remuneration and approval of further terms of employment for the individual members of the Executive Board.
Approval of the bonus regulations at the CEO’s request.
3. Objectives, targets and rewards
The NRSC acknowledges the annual objectives of the members of the Executive Board, which are in principle derived from the implementation measures of the strategy approved by the Board of Directors. At the start of each financial year, the NRSC establishes, upon proposal of the CEO, two sets of performance targets:
- Short-Term Incentive (STI) targets for the current financial year
- Long-Term Incentive (LTI) targets for the new 3-year cycle beginning that year
Concurrently, the NRSC assesses, upon the proposal of the CEO the achievement of:
- STI targets from the previous financial year
- Key Performance Indicators (KPIs) for the LTI cycle that concluded in the previous year
The decision-making processes are summarised in the following table:
CEO | BoD Chair | NRSC | BoD | AGM | |||
1. | Procedural questions (Art. 31 para 1 OrgR) | ||||||
1.1 | Institute investigations and enquiries | A | |||||
1.2 | Requesting for information | (FI) | A | ||||
2. | CEO/EB Nominations and Remunerations (Art. 34 OrgR) | ||||||
2.1 | Approval of selection criteria | A | |||||
2.2 | Proposals to the BoD for nomination of EB members | P | R | A | |||
2.3 | Election of heads of business and functional units | A | |||||
2.4 | Renaming / mergers / transfers of units to other areas | A | FI | ||||
2.5 | Formation / reorganisations / winding down of units | A | FI | ||||
2.6 | Nomination of heads of BD / FD and of BU / FU as members of the BoD of the subsidiaries and associated companies as well as other significant associates held by the holding company | A | FI | FI | |||
2.7 | Total remuneration of members of the BoD, ARC, NRSC and members of the EB | R | P | A | |||
2.8 | Special conditions of the BoD | P | A | ||||
2.9 | Other terms of employment for the CEO | P | A | ||||
2.10 | Other terms of employment for EB members | P | A | ||||
2.11 | Remuneration policy of heads of business and functional units | A | FI | ||||
2.12 | Bonus regulations | P | A | ||||
3. | Objectives and reward (Art. 35 OrgR) | ||||||
3.1 | Annual objectives EB members | R | R | A | |||
3.2 | Reward achievement | R | R | A | |||
4. | Group Strategy (Art. 36 OrgR) | ||||||
4.1 | Elaboration of corporate strategy incl. macro-economic scenarios, basic assumptions | P | R | A | |||
4.2 | Evaluation of strategic directions and variants incl. valuation of scenarios and stress tests | P | R | A | |||
4.3 | Corporate Strategy | P | R | A | |||
4.4 | Monitoring of Strategy Implementation | P | A | ||||
5. | Sustainability (Art. 37 OrgR) | ||||||
5.1 | Proposal of ESG standard | P | R | A | |||
5.2 | Annual ESG Reporting in context of Annual Report | P | A | ||||
5.3 | Elaboration of annual ESG targets and monitoring of target achievements | P | R | A |
A =Approval / decision
R = Recommendation
FI =For information
P = Proposal
2 Market-compliant remuneration
To ensure that the remuneration of members of the Executive Board and the Board of Directors conforms to standard market practice, Alpiq regularly engages independent external consultancy firms to evaluate overall remuneration packages relative to the market environment.
Following the review of Alpiq’s remuneration systems initiated in 2023, an amended remuneration system for the members of the Executive Board was introduced for the financial year 2024.
3 Remuneration principles
Members of the Board of Directors receive fixed basic remuneration, additional expense allowances and statutory pension benefits. These components are not performance related. The amount of fixed remuneration depends on the role on the Board of Directors, such as membership of a committee or chairing function on the BoD or a committee. Apart from statutory social security contributions and pension contributions if they have pensions with the Swiss pension fund ‘Stiftung Pensionskasse Energie’ (PKE), members of the Board of Directors do not receive any other pension benefits.
Under the amended remuneration system members of the Executive Board receive a fixed salary and are eligible for a performance linked short-term (STI) and a long-term incentive (LTI). The STI replaces the previous Rewards, the LTI is a new compensation element intended to set specific incentives linked to the long-term success of Alpiq.
Members are also entitled to a company car allowance, an expense allowance and, if requested, a GA travelcard for first-class travel.
The Short-term incentive (STI) is a variable compensation component based on past year’s performance of the Alpiq Group, the EB member’s Business Division and the EB member themself. The STI Target structure is the same for CEO and CFO which falls into a Group Target (90%) and an individual target (10%). For the other three EB members an additional Business Target (30%) has been defined, reducing the weight of the Group Target to 60% whereas the Individual Target remains at 10%. The Group Target is the same for all members of the EB, whereas Individual and Business is specific for each member. Target setting follows the OKR (objectives and key results)-methodology: targets are quantitative and qualitative objectives, achievement is defined and measured through KPI (key results) and must be substantiated by defined evidence.
The performance is measured according to the achievement of targets set by the NRSC, resulting in a Performance Factor. The possible range of the Performance Factor is 0% to 150%. The Performance Factor is multiplied with the target value for each Member and the STI payout is in the year following the financial year.
The Long-term incentive (LTI) is a variable compensation component based on future oriented performance conditions (KPIs) and is the same for all EB members. The LTI has a life cycle of 3 years and the assessment of the achievement of the KPIs results in a LTI Success Factor with a possible range of 0% to 150%. As for the STI the OKR methodology is applied. The performance period of the first LTI award started last year and lasts for two more years, with a payout in three years. Every financial year a new LTI cycle starts with a performance period of three years and payout in the fourth year.
All members of the Executive Board are covered by statutory social security and the PKE pension fund.
For the role of Head of Trading, there is also the option of allocating a Trading Deferred Incentive (TDI) based on the achieved trading performance. The TDI is regarded as specific remuneration for the duties as Head of Trading, irrespective of whether the role holder is a member of the Executive Board. The TDI remuneration is therefore not considered remuneration for Members of the Executive Board.
4 Key changes to the Board of Directors and the Executive Board in the reporting year
Board of Directors
Aline Isoz and Jean-Yves Pidoux stepped down as members of the Board of Directors as of 31 December 2023. On 19 December 2023, the Extraordinary General Meeting elected Adèle Thorens Goumaz and François Gabella as new members of the Board of Directors as of 1 January 2024.
At the Annual General Meeting on 30 April 2024 Andreas Büttiker was nominated as member of the Board of Directors. He replaced Conrad Ammann, who did not stand for re-election after 12 years on the Board. François Gabella was elected as the new Vice Chairman of the Board of Directors.
In the ARC François Gabella replaced Jean-Yves Pidoux while in the NRSC Adèle Thorens Goumaz replaced Aline Isoz and Andreas Büttiker replaced Conrad Ammann.
Executive Board
As of March 2024, Michael Wider, Deputy CEO and Head of the Business Division Switzerland, retired. In 2023 the Board of Directors has appointed Amédée Murisier, Head of Hydro Power Generation at Alpiq, as a new member of the Executive Board as of 1 March 2024.
5 Members of the Board of Directors’ remuneration in the reporting year
5.1 Remuneration paid to the Board of Directors in 2024
In 2024, members of the Board of Directors received fixed remuneration, additional attendance fees, expense allowances and statutory pension benefits. These components are not performance related. A breakdown of payments made to the members of the Board of Directors is shown in the table below.
Remuneration comprises directors’ fees, attendance fees and payments for serving on the ARC, the NRSC and the Ad hoc or Strategic Committee. In 2024 the following number of meetings were held:
# ordinary meetings | # ad hoc meetings | |
BoD | 6 | 3 |
ARC | 8 | 2 |
NRSC | 4 | 4 |
A breakdown of payments made to members of the Board of Directors is shown in the table below.
CHF thousand | 2024 |
Fixed remuneration | 1,648 |
Expenses allowances | 110 |
Others | 70 |
Total | 1,828 |
5.2 Remuneration paid to the Board of Directors in 2023
In 2023, members of the Board of Directors received fixed remuneration, additional attendance fees, expense allowances and statutory pension benefits. These components are not performance related. A breakdown of payments made to the members of the Board of Directors is shown in the table below.
Remuneration comprises directors’ fees, attendance fees and payments for serving on the ARC, the NRSC and the Ad hoc or Strategic Committee.
CHF thousand | 2023 |
Fixed remuneration | 1,755 |
Expenses allowances | 120 |
Others | 49 |
Total | 1,924 |
6 Remuneration of Executive Board members in the reporting year
The employment contracts, terms and conditions of employment and remuneration for members of the Executive Board were approved by the NRSC for the reporting year.
In the financial year 2024, Executive Board members received fixed base salary for the year 2024 and variable compensation based on the performance of previous years. The compensation paid consisted of the following components:
Fixed base salary 2024:
Monthly cash remuneration, paid in 13 instalments during the financial year (Y+0), not performance-related.
Reward 2023:
Result and performance-related variable salary component. Vesting in two tranches (May and December) in the year following the financial year (Y+1) and awarded in cash. The possible range of the payout is 0% to 133% or 0% to 200% for selected Executive Board members.
Long-term incentive (LTI) or strategic award:
Long-term remuneration component based on the achievement of certain strategic corporate targets during the performance period of three years. The possible range of payout is 0% to 100%. Vesting in May following the end of the financial year in which the performance period ends. Selected Executive Board members only.
Other payments:
For example, car allowances and lump-sum expenses in line with the valid regulations.
Social security contributions and pension plan payments:
Statutory or regulatory contributions and payments. Along with all Alpiq employees, Executive Board members belong to the Swiss pension fund ‘PKE Vorsorgestiftung Energie’ (defined contribution plan).
Navin Parasram was appointed as member of the Executive Board and Head Trading as of 1 June 2022. From April 2020 to 31 May 2022, he had the role of Head Merchant Trading at Alpiq. In 2024, he also received deferred remuneration related to his previous role.
6.1 Determination of variable remuneration in the financial year
After the end of the financial year 2023, the CEO, together with the Executive Board, presented the most important areas in which value has been created for various stakeholders based on a value creation report and, on this basis, submitted a proposal to the NRSC for a target achievement level between 0% (floor), 100% (target) to 133% or 200% for over-achievement with a clear cap. The NRSC discussed the report with the CEO as representative of the Executive Board and then submitted its assessment of the degree of target achievement to the Board of Directors for approval.
Additionally, the NRSC submitted its assessment of the degree of target achievement on the LTI awarded to selected members of the Executive Board to the Board of Directors for approval.
It is entirely at the discretion of the NRSC and the Board of Directors where the level of target achievement is set.
6.2 Remuneration paid to members of the Executive Board in 2024
In the reporting year, the ratio of fixed salary components (totalling CHF 3.2 million) to variable components (totalling CHF 1.9 million) was 63% to 37%.
CHF thousand | 2024 |
Fixed remuneration | 3,151 |
Variable remuneration | 1,889 |
Others (incl. social security) | 1,089 |
Total | 6,129 |
1)Does not include deferred remuneration received by Navin Parasram in relation to his previous role as head of Merchant Trading.
2)Includes remuneration for Michael Wider until his contractual exit on 31.06.2024.
3)Other remuneration includes allowances (e.g. car, child, family, GA).
4)For selected Executive Board members LTI tranches vested during 2024.
5)Employer social security contributions were paid in accordance with statutory requirements.
Each member of the Executive Board was paid an additional annual expense lump sum of CHF 24 thousand; the CEO received CHF 30 thousand. Expense allowances for the Executive Board totalled CHF 132 thousand. Each member of the Executive Board was paid a car lump sum of CHF 6 thousand, which totalled CHF 32 thousand.
6.3 Remuneration paid to members of the Executive Board in 2023
In the previous year, the ratio of fixed salary components (totalling CHF 3.1 million) to variable components (totalling CHF 1.3 million) was 70% to 30%.
CHF thousand | 2023 |
Fixed remuneration | 3,065 |
Variable remuneration | 1,328 |
Others (incl. social security) | 1,013 |
Total | 5,406 |
1)Does not include deferred remuneration received by Navin Parasram in relation to his previous role as head of Merchant Trading.
2)Includes remuneration for Alexandra Machnik who left the Executive Board in 2022.
3)Other remuneration includes allowances (e.g. car, child, family, GA).
4)No Executive Board LTI tranches vested during 2023.
5) Employer social security contributions were paid in accordance with statutory requirements.
Each member of the Executive Board was paid an additional annual expense lump sum of CHF 24 thousand; the CEO received CHF 30 thousand. Expense allowances for the Executive Board totalled CHF 126 thousand. Each member of the Executive Board was paid a car lump sum of CHF 6 thousand, which totalled CHF 30 thousand.