IMPLEMENTATION OF THE MINDER INITIATIVE ANNUAL … · Minder Implementation at the AGMs 2014 Page 4...

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

Date: 7 November 2014

Minder Implementation at the AGMs 2014

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


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


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


LEVEL OF IMPLEMENTATION OF THE MINDER INITIATIVE

AT THE 2014 AGMS: 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”)


LEVEL OF IMPLEMENTATION OF THE MINDER INITIATIVE

AT THE 2014 AGMS: BY INDEX


STRUCTURE OF THE SOP 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)


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


• 36% of companies do not hold any SoP vote at their 2014 AGM, while 35% hold a consultative vote on the compensation report

SOP VOTE AT THE 2014 AGM: ALL COMPANIES

• Bigger companies hold an SoP vote in 2014:• 95% in the SMI• 90% in the SLI• 72% in the SMIM• 55% in other companies



SOP VOTE AT THE 2014 AGM: BY INDEX


• 42% of companies included a provision on non-compete agreements, with a time limit of typically 1 year

NON COMPETITION CLAUSES IN THE AoA

• 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 non-competition agreement in their AoA



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 non-compete, 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



NON COMPETITION CLAUSES IN THE AoA: BY INDEX


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



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



PROXY ADVISORS VOTING RECOMMENDATION

• Level of positive voting recommendations by proxy advisor:

• 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

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%

ISS

Ethos

zCapital

SWIPRA


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

Voting results

AoA

Voting result

Comp Report

Voting result

Comp Board

Voting result

Comp Executives

Average in SMI 86% 85% 86% 92%

Average in SLI 85% 87% 90% 93%

Average in SMIM 81% 90% 86% 91%

Average in SPI 84% 91% 92% 91%


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

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