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Annual Report 2016

Compensation decisions for the Group EC

Compensation mix for Group EC 2016

Compensation mix for Group EC 2016 (pie chart)

2015

Compensation mix for Group EC 2015 (pie chart)

The variable compensation awarded to all members of the Group EC (including the previous and current Group CEO) totalled CHF 32.4 million for 2016, compared to CHF 32.5 million for 2015. The following table covers payments to 14 members for 2016 of whom 12 were employed for the full year. The 2015 payments cover 12 members who were all employed for the full year.

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12 members

14 members1

CHF thousands

2015

2016

1

Represents incumbents and not positions.

2

Benefits or allowances paid in cash. Consisting of housing, schooling, lump sum expenses, relocation expenses/ taxes, child and similar allowances.

3

For 2016, subject to shareholder approval at the AGM 2017. For 2015, as part of the aggregate amount of short-term variable compensation approved by the shareholders at the AGM 2016.

4

Disclosure reflects all awards for a reporting year, ie the 2015 value reflects the fair value of LPP awards granted in April 2015 and the 2016 value reflects the fair value of LPP granted in April 2016.

5

Covers payments reflecting the time in the role as Group EC members.

6

For Group EC members leaving during the reporting period, this covers only legally or contractually required payments for the period when the member was no longer in the role (eg base salary when on garden leave).

7

Amounts are gross and include social security contributions of the employees. Additionally and not included are company contributions to social security systems paid by Swiss Re in line with applicable laws which amounted to CHF 3 755 675 in 2015 and CHF 2 922 518 in 2016.

Base salary

12 502

13 224

Allowances2

403

2 745

Funding of pension benefits

1 913

2 139

Total fixed compensation

14 818

18 108

Cash Annual Performance Incentive3

11 028

9 867

Value Alignment Incentive3

9 314

8 396

Leadership Performance Plan4

12 200

14 150

Total variable compensation

32 542

32 413

Total fixed and variable compensation5

47 360

50 521

Compensation due to members leaving6

 

909

Total compensation7

47 360

51 430

The compensation increase in 2016 compared to the previous fiscal year is mainly caused by the following factors:

  • The 12 members of the Group EC of 2015 received in 2016 total compensation of CHF 45.4 million (including the effects of the Group CEO change from Michel Liès to Christian Mumenthaler as per 1 July 2016 and the promotion of Moses Ojeisekhoba to CEO Reinsurance as per 1 July 2016);
  • Additional total compensation of approximately CHF 6 million was paid to the new members of the Group EC: Thierry Léger (new CEO Life Capital) for the full year 2016 and to Jayne Plunkett (new CEO Reinsurance Asia) for the second half of the year 2016. The CHF 45.4 million and CHF 6 million combine to give a total of CHF 51.4 million for the 14 members in 2016 (shown in the table above);
  • The aggregate amount for fixed compensation, pensions, social security, allowances and other benefits and for long-term variable compensation of the above mentioned 12 members of the Group EC in 2016 was CHF 29.5 million and therefore within the budget of CHF 31.0 million approved by the AGM 2015 for these 12 members of the Group EC. Such amount included a reserve of 10% which was only partially used, primarily to cover foreign taxes in connection with a change of residence in accordance with Swiss Re’s international assignment rules; and
  • The compensation for Thierry Léger and Jayne Plunkett was not originally considered in the CHF 31 million prospective budget for 2016 given their appointments were made post the AGM 2015 (see the explanations on Reconciliation of AGM 2015 resolutions for Group EC compensation).

Compensation decisions for the highest paid member of the Group EC

The table below shows for 2015 the compensation paid to the Group CEO Michel Liès and for 2016 the compensation paid to Christian Mumenthaler, Group CEO since 1 July 2016.

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CHF thousands

2015

2016

1

Benefits or allowances paid in cash. Consisting of housing, schooling, lump sum expenses, relocation expenses/taxes, child and similar allowances.

2

For 2016, subject to shareholders approval at the AGM 2017. For 2015, as part of the aggregate amount of short-term variable compensation approved by the shareholders at the AGM 2016.

3

Disclosure reflects all awards for a reporting year, ie the 2015 value reflects the fair value of the LPP award granted in April 2015 and the 2016 value reflects the fair value of the LPP award granted in April 2016.

4

Amounts are gross and include social security contributions of the employees. Additionally and not included are company contributions to social security systems paid by Swiss Re in line with applicable laws which amounted to CHF 813 446 in 2015 and CHF 308 237 in 2016.

Base salary

1 600

1 300

Allowances1

38

43

Funding of pension benefits

178

178

Total fixed compensation

1 816

1 521

Cash Annual Performance Incentive2

1 600

1 113

Value Alignment Incentive2

1 600

1 113

Leadership Performance Plan3

2 000

2 500

Total variable compensation

5 200

4 726

Total compensation4

7 016

6 247

Additional information on compensation decisions

For US GAAP and statutory reporting purposes, VAI and LPP awards are accrued over the period during which they are earned. For the purpose of the disclosure required in this Compensation Report, the value of awards granted is included as compensation in the year of performance for the years 2015 and 2016 respectively.

Each member of the Group EC including the Group CEO participates in a defined contribution pension scheme. The funding of pension benefits shown in the previous two tables reflects the actual employer contributions.

Other payments to members of the Group EC

During 2016, no payments (or waivers of claims) other than those set out in the section compensation disclosure and shareholdings in 2016 were made to current members of the Group EC or persons closely related.

Shares held by members of the Group EC

The following table reflects Swiss Re share ownership by members of the Group EC as of 31 December:

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Members of the Group EC

2015

2016

1

The number of shares held on 30 June 2016 when Michel Liès stepped down from the Group EC was 290 692.

2

The figure shown in the 2015 Compensation Report did not reflect the sale of 10 000 shares in May 2015, which was appropriately reported as a management transaction in May 2015 according to the listing rules of the SIX Swiss Exchange.

Christian Mumenthaler, Group CEO

50 000

63 854

Michel Liès, previous Group CEO1

262 808

n/a

David Cole, Group Chief Financial Officer

54 207

68 061

John R. Dacey, Group Chief Strategy Officer

171

7 526

Guido Fürer, Group Chief Investment Officer

42 302

56 156

Agostino Galvagni, CEO Corporate Solutions

65 816

79 670

Jean-Jacques Henchoz, CEO Reinsurance EMEA

35 476

46 817

Thierry Léger, CEO Life Capital

n/a

57 610

Moses Ojeisekhoba, CEO Reinsurance

26 404

27 895

Jayne Plunkett, CEO Reinsurance Asia

n/a

29 095

J. Eric Smith, CEO Reinsurance Americas2

6 990

13 984

Matthias Weber, Group Chief Underwriting Officer

25 410

25 750

Thomas Wellauer, Group Chief Operating Officer

116 111

130 224

Total

685 695

606 642

Vested options held by members of the Group EC

For the years ended 31 December 2015 and 2016, no member of the Group EC held any vested options.

Leadership Performance Plan units held by members of the Group EC

The following table reflects total unvested LPP units (RSUs and PSUs) held by members of the Group EC as of 31 December:

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2015

2016

Christian Mumenthaler, Group CEO

49 755

75 458

Michel Liès, previous Group CEO

99 490

64 125

David Cole, Group Chief Financial Officer

49 755

49 426

John R. Dacey, Group Chief Strategy Officer

49 755

49 426

Guido Fürer, Group Chief Investment Officer

49 755

53 765

Agostino Galvagni, CEO Corporate Solutions

49 755

49 426

Jean-Jacques Henchoz, CEO Reinsurance EMEA

39 805

39 540

Moses Ojeisekhoba, CEO Reinsurance

39 805

43 011

Jayne Plunkett, CEO Reinsurance Asia

n/a

33 130

J. Eric Smith, CEO Reinsurance Americas

39 805

39 540

Thierry Léger, CEO Life Capital

n/a

43 011

Matthias Weber, Group Chief Underwriting Officer

49 755

49 426

Thomas Wellauer, Group Chief Operating Officer

49 755

49 426

Patrick Raaflaub, Group Chief Risk Officer

12 435

29 791

Total

579 625

668 501

Loans to members of the Group EC

As per Art. 27 of the Articles of Association, credits and loans to members of the Group EC may be granted at employee conditions applicable for the Swiss Re Group, with a cap on the total amount of such credits and loans outstanding per member.

In general, credit is secured against real estate or pledged shares. The terms and conditions of loans and mortgages are typically the same as those available to all employees of the Swiss Re Group in their particular locations to the extent possible.

Swiss-based variable-rate mortgages have no agreed maturity dates. The basic preferential interest rates equal the corresponding interest rates applied by the Zurich Cantonal Bank minus one percentage point. Where fixed or floating interest rates are preferential, the value of this benefit has been included under “allowances” in the tables covering compensation decisions for Group EC members.

The following table reflects total mortgages and loans for members of the Group EC as of 31 December:

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CHF thousands

2015

2016

1

The member of the Group EC having the highest mortgage in 2015 transferred the mortgage to a bank in 2015.

Total mortgages and loans to members of the Group EC

420

0

Highest mortgages and loans to an individual member of the Group EC1:

 

 

J. Eric Smith, CEO Reinsurance Americas

420

n/a

Total mortgages and loans not at market conditions to former members of the Group EC

4 300

4 300