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General compensation

Payouts of deferred compensation plans

Value Alignment Incentive

The VAI performance is measured for the Group and each underlying business area. Participants receive the performance factor relating to the business area that they were in at the time of award. In March 2013, the Group VAI 2009 (awarded in 2010) vested with an average performance factor of 104%.

The VAI 2009 performance factor resulted from favourable claims development in 2011 and 2012, and a positive investment result. However, compared to the VAI 2008 performance factor, the positive developments were lower.

Status of Value Alignment Incentive awards

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VAI plan year

Performance measurement period as of 31 December 2013

Performance factor

2006

3 years (closed)

124.2%

2007

3 years (closed)

123.4%

2008

3 years (closed)

135.7%

2009

3 years (closed)

104.0%

2010

3 years

to be determined

2011

2 years

to be determined

2012

1 year

to be determined

Long Term Incentive

The performance hurdles for the LTI award defined in 2011 were centred on an average return on equity (RoE) target of 10.2% and average earnings per share (EPS) target of USD 6.60. Considerations which led to the respective targets were the market outlook, the level of uncertainty and the clear priority set by the Board to de-risk the balance sheet.

The LTI plan has been discontinued and the last award of LTI was granted in March 2011. The last grant of LTI was disclosed in the 2010 Compensation Report. The table below reflects the units awarded and subsequently vested across all LTI plan years.

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in CHF millions

Total

1

Number of units

2

“Value awarded” includes awards to all employees

3

Vesting of LTI 2011 is on 31 March 2014. Number of units is as of 28 February 2014. An indicative share price of CHF 82.20 as of 28 February 2014 has been used for the calculations

Grant

Units awarded1

6 037 420

 

Value awarded2

286

 

Weighted average value per unit at grant

47.17

Vesting

Units vested1,3

5 519 740

 

Value vested of which:

271

 

Vesting related to performance factor

155

 

Vesting related to share price growth

116

 

Weighted average value per unit at vesting

49.16

Of the plans that have expired or are due to expire in 2014, the LT I represented about 29% of the total compensation for the Group EC members over that period. These LTI plans have resulted or will result in a settlement value of approximately 84% of the award value. Consequently, the total compensation awarded for the Group EC members over that period was approximately 5% higher than the value realised upon vesting.

Aggregate compensation of the Swiss Re Group

The aggregate compensation for the performance years 2012 and 2013 for all employees was as follows:

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Performance Year 2012

Performance Year 2013

Category

Type of plan

Number of participants

Values (in CHF millions)

Number of participants

Values (in CHF millions)

1

In 2012 various cash allowances (eg service awards, car and meal allowances) in the amount of CHF 11.6 million were not included.

2

A post-award adjustment was made in 2013 in respect of two employees for the 2012 performance year. The incremental amount was CHF 280 000 which is not included in the table above.

3

Severance payments in the table above include (i) payments under standard severance packages, (ii) other payments that are over and above what is contractually or legally required, and (iii) voluntary supplementary departure payments, but exclude similar legally permitted payments or garden leave which are aligned with local market practice for comparable positions in respect of amount, nature or duration.

Fixed compensation

Base salaries

11 193

1 082

11 574

1 122

 

Pensions, social security and benefits1

11 193

424

11 574

457

Annual Performance Incentive

Cash Annual Performance Incentive2

10 015

379

10 318

357

 

Value Alignment Incentive

1 081

72

959

63

Long-term variable compensation

 Leadership Performance Plan

243

43

278

45

Other payments

Severance payments3

393

28

355

19

 

Sign-on payments

94

4

83

4

As of 31 December 2013, Swiss Re Group employed 11 574 regular staff worldwide, compared to 11 193 employees at the end of 2012.

Aggregate compensation for Key Risk Takers

The aggregate compensation of the individuals that held a key risk-taking position during the performance years 2012 and 2013 was:

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Performance Year 2012

Performance Year 2013

Category

Type of plan

Number of participants

Values (in CHF millions)

Number of participants

Values (in CHF millions)

1

A post-award adjustment was made in 2013 in respect of two employees for the 2012 performance year. The incremental amount was CHF 280 000 which is not included in the table above.

2

Severance payments in the table above include (i) payments under standard severance packages, (ii) other payments that are over and above what is contractually or legally required, and (iii) voluntary supplementary departure payments, but exclude similar legally permitted payments or garden leave which are aligned with local market practice for comparable positions in respect of amount, nature or duration.

Fixed compensation

Base salaries

125

53

140

55

 

Pensions, social security and benefits

125

22

140

28

Annual Performance Incentive

Cash Annual Performance Incentive1

125

51

137

45

 

Value Alignment Incentive

124

33

136

30

Long-term variable compensation

Leadership
Performance Plan

114

32

126

32

Other payments

Severance payments2

4

6

0

0

 

Sign-on payments

7

2

2

2

Aggregate variable compensation expense

The Compensation Committee takes its decisions to award variable compensation on an economic value basis at the time of grant. In the financial statements the recognition of deferred compensation follows the accrual principles as defined under US GAAP. The financial statements reflect the aggregate value of variable compensation for the year under review as follows:

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US GAAP accounting year 2013

CHF millions

Economic value at grant

Accrued grant value

Fair value mark-up

Total expense

1

Accrual related to prior performance year.

2

Plans were granted in prior years.

Cash API 2013

357

357

 

357

VAI 2013 (granted in April 2014)

63

 

 

 

LPP 2014 (granted in April 2014)

45

 

 

 

Cash API 20121

 

 

–25

–25

VAI 2009–2012 (granted between 2010 and 2013)2

 

64

–2

62

LPP 2012–2013 (granted between 2012 and 2013)2

 

24

–1

23

LTI 2009–2011 (granted between 2009 and 2011)2

 

14

15

29

Total

 

459

–13

446