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
| Download |
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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 |
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|
Grant |
Units awarded1 |
6 037 420 |
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|
Value awarded2 |
286 |
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|
Weighted average value per unit at grant |
47.17 |
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Vesting |
Units vested1,3 |
5 519 740 |
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Value vested of which: |
271 |
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Vesting related to performance factor |
155 |
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Vesting related to share price growth |
116 |
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Weighted average value per unit at vesting |
49.16 |
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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:
| Download |
|
|
|
Performance Year 2012 |
Performance Year 2013 |
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|
Category |
Type of plan |
Number of participants |
Values (in CHF millions) |
Number of participants |
Values (in CHF millions) |
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Fixed compensation |
Base salaries |
11 193 |
1 082 |
11 574 |
1 122 |
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|
Pensions, social security and benefits1 |
11 193 |
424 |
11 574 |
457 |
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Annual Performance Incentive |
Cash Annual Performance Incentive2 |
10 015 |
379 |
10 318 |
357 |
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|
Value Alignment Incentive |
1 081 |
72 |
959 |
63 |
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Long-term variable compensation |
Leadership Performance Plan |
243 |
43 |
278 |
45 |
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Other payments |
Severance payments3 |
393 |
28 |
355 |
19 |
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Sign-on payments |
94 |
4 |
83 |
4 |
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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:
| Download |
|
|
|
Performance Year 2012 |
Performance Year 2013 |
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|
Category |
Type of plan |
Number of participants |
Values (in CHF millions) |
Number of participants |
Values (in CHF millions) |
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Fixed compensation |
Base salaries |
125 |
53 |
140 |
55 |
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|
Pensions, social security and benefits |
125 |
22 |
140 |
28 |
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Annual Performance Incentive |
Cash Annual Performance Incentive1 |
125 |
51 |
137 |
45 |
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Value Alignment Incentive |
124 |
33 |
136 |
30 |
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Long-term variable compensation |
Leadership |
114 |
32 |
126 |
32 |
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Other payments |
Severance payments2 |
4 |
6 |
0 |
0 |
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|
Sign-on payments |
7 |
2 |
2 |
2 |
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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:
| Download |
|
|
|
US GAAP accounting year 2013 |
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|
CHF millions |
Economic value at grant |
Accrued grant value |
Fair value mark-up |
Total expense |
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Cash API 2013 |
357 |
357 |
|
357 |
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VAI 2013 (granted in April 2014) |
63 |
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LPP 2014 (granted in April 2014) |
45 |
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Cash API 20121 |
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|
–25 |
–25 |
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VAI 2009–2012 (granted between 2010 and 2013)2 |
|
64 |
–2 |
62 |
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LPP 2012–2013 (granted between 2012 and 2013)2 |
|
24 |
–1 |
23 |
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LTI 2009–2011 (granted between 2009 and 2011)2 |
|
14 |
15 |
29 |
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Total |
|
459 |
–13 |
446 |
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