Compensation principles

The Group CEO and the other members of the Group EC are remunerated under the same compensation framework and guiding principles as all other Swiss Re employees. The Group CEO and the other members of the Group EC are paid a fixed base salary and are eligible to receive variable compensation in the form of API, VAI as well as LPP.

In 2013 for the members of the Group EC including the Group CEO, the total of the aggregate Target APIs was CHF 15.8 million (capped at 3x annual base salary) and the aggregate LPP awarded was CHF 11.4 million.

The Compensation Committee assesses the performance of the Group CEO and the Group EC members against a set of quantitative and qualitative objectives. The main financial performance indicators are based on US GAAP, EVM results, economic net worth and return on equity. The qualitative criteria include client and service quality, franchise building, leadership and talent management as well as risk and control related behaviour objectives. These objectives are agreed at the beginning of the year and are aligned with the Group’s financial plan.

Benchmarking

The external adviser, Mercer, conducts an annual review of the total compensation for the Group EC relative to a group of reference companies in the financial services industry to ensure that market competitiveness is maintained. This peer group consists of the following globally active primary insurance and reinsurance firms: Ace Ltd, Allianz SE, American International Group Inc, Aviva PLC, AXA SA, Generali, Hannover Rueck SE, Metlife Inc, Muenchener Rueckversicherungs-Gesellschaft AG, PartnerRe Ltd, QBE Insurance Group Ltd, Reinsurance Group of America Inc, SCOR SE, XL Group PLC and Zurich Insurance Group AG.

Employment conditions

The Group CEO and the other Group EC members have employment contracts with maximum notice periods of 12 months and without severance payment agreements. Information on “change of control” clauses is covered in the Corporate Governance section. Executives are covered by the Group’s standard defined-contribution pension plan.

Stock Ownership Guidelines

With effect from 1 January 2010, Swiss Re established stock ownership guidelines which articulate the levels of stock ownership expected of the members of the Group EC and the GMB. The guidelines are designed to increase the alignment of individual members of senior management with shareholders and demonstrate that Swiss Re executives bear the same risks as other shareholders.

The guidelines define target ownership by role and the ownership levels required are outlined below:

• Group CEO — 3x annual base salary
• Group EC members — 2x annual base salary
• GMB members — 1x annual base salary

Members have a five-year timeframe to achieve these targets. In addition, because Swiss Re believes that a meaningful stock ownership position is essential, restrictions on the cash portion of API delivered will apply if these levels are not met within the specified timeframe.

The determination for whether a Group EC or GMB member has met the guidelines will include all vested shares that are owned directly or indirectly by the relevant members and related parties.