Compensation for the members of the Board of Directors

The following two tables illustrate (1) the individual compensation for the members of the Board of Directors for the reported financial years 2015 and 2016 and (2) the individual compensation for the members of the Board of Directors paid or payable for the term of office from AGM 2016 to AGM 2017.

(1) Individual Board compensation for the reported financial years 2015 and 2016 was:

(2) Individual Board compensation for the term of office between the AGM 2016 and the AGM 2017.

The table below provides more detailed information on the compensation paid or payable to each Board member against the maximum aggregate amount of CHF 10 100 000 as approved by the AGM 2016 (figures in CHF thousands):

Shares held by members of the Board of Directors

The number of shares held by members of the Board of Directors as of 31 December were:

Vested options held by members of the Board of Directors

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

Loans to members of the Board of Directors

No loans were granted to current or former members of the Board in 2016 and no loans were outstanding as of 31 December 2016.

Related parties transactions

Disclosure on compensation decisions in 2016 covers members of the Board of Directors and the Group EC as indicated, and for both include related parties to the extent applicable. Such related parties cover spouses, partners, children and other dependents or closely linked persons. In 2016 no compensation was paid to any related party.

Compensation for former members of governing bodies

During 2016, payments to the total amount of CHF 0.1 million were made to five former members of the Group EC. This amount is made up of company contributions payable by Swiss Re to governmental social security systems in line with applicable laws, benefits in the context of the outstanding mortgages and loans not at market rates, risk benefits and company commitments for tax related services.

Shareholder Compensation Resolutions and Awarded Compensation

The following explanations give an overview of the applicable framework in Swiss Re’s Articles of Association based on the Ordinance, the high acceptance by the shareholders in the AGM 2016 of the respective motions by the Board of Directors and the reconciliation of the shareholders’ resolutions with the compensation awarded in the reporting year 2016.

Framework of the Articles of Association

In accordance with Art. 22 of the Articles of Association, the Shareholders’ Meeting shall approve annually and with binding effect the proposals of the Board of Directors in relation to:

a) the maximum aggregate amount of compensation of the Board of Directors for the next term of office;

b) the maximum aggregate amount of (i) fixed compensation and (ii) long-term compensation of the Group EC for the following financial year; and

c) the aggregate amount of short-term compensation of the Group EC for the preceding completed financial year.

AGM 2016 voting results

At the AGM on 22 April 2016, shareholders approved for the second time the maximum aggregate prospective compensation of the members of the Board of Directors (88.3% approval). Shareholders also approved (i) the maximum aggregate prospective fixed compensation and variable long-term compensation and (ii) the aggregate retrospective variable short-term compensation of the Group EC. The outcomes were 89.5% and 90.3% approval respectively. As in previous years, the 2015 Compensation Report was subject to a consultative vote and was approved by 89.5% of the shareholder votes.

Reconciliation of AGM 2015 resolutions for Group EC compensation¹

At the AGM 2015, shareholders approved a prospective maximum aggregate amount of CHF 31.0 million for fixed compensation and variable long-term compensation for the financial year 2016 for the 12 members holding positions in the Group EC at the time of the AGM 2015.

The amount of fixed compensation and variable long-term compensation effectively granted to these 12 members of the Group EC during the financial year 2016 amounted to CHF 29.5 million and also covers adjustments in the compensation of existing members of the Group EC as a result of their promotions as per 1 July 2016 to new Group CEO and new CEO Reinsurance respectively, and the related additional costs. The amount also includes contractual salary payments in 2016 for the former Group CEO (see the comments on Compensation decisions for the Group EC).

The CHF 31.0 million did not account for additional fixed compensation and variable long-term compensation required as a result of the changes in the Group EC in 2016, announced after the AGM 2015. For such compensation for the year 2016 an “additional amount” (Zusatzbetrag) is available pursuant to the Ordinance and Art. 23 of the Articles of Association per person and applicable compensation period amounting to a maximum of 20% of the aggregate amount of compensation for the Group EC last approved by the Shareholders’ Meeting. This additional amount available was therefore CHF 12.4 million in total for the two new members of the Group EC.

Pursuant to applicable rules, the compensation for the two new members of the Group EC, Thierry Léger promoted to CEO Life Capital as from 1 January 2016 and Jayne Plunkett promoted to CEO Reinsurance Asia as from 1 July 2016, was first allocated in the amount of CHF 1.5 million to exhaust the approved compensation amount of CHF 31.0 million and then in the amount of CHF 2.2 million against the additional amount available of CHF 12.4 million of which CHF 1.2 million relates to compensation for Thierry Léger and CHF 1.0 million for Jayne Plunkett. The variable short-term compensation for the financial year 2016 is not part of the additional amount and it will be approved retrospectively by the AGM 2017 as part of the total variable short-term compensation of the Group EC. The compensation granted to the 14 members of the Group EC, which includes the previous CEO Michel Liès, for the financial year 2016 is shown on Compensation decisions for the Group EC.

Reconciliation of AGM 2016 resolution for Board of Director’s compensation¹

At the AGM 2016, shareholders approved the maximum aggregate amount of compensation for the 11 members of the Board of Directors for the term of office from the AGM 2016 to the AGM 2017 of CHF 10.1 million.

As shown above, the compensation paid to the 11 members of the Board of Directors for their term of office from the AGM 2016 to the AGM 2017 was CHF 9.9 million and therefore within the approved amount.

AGM 2017 motion for variable short-term compensation for the Group EC for the financial year 2016

At the AGM 2017, the Board of Directors will propose to the shareholders to approve retrospectively an aggregate amount of variable short-term compensation for the 14 members of the Group EC for the completed financial year 2016 of CHF 18 263 261. This amount has been included in the items “Cash Annual Performance Incentive” and “Value Alignment Incentive” in the table for the Group EC compensation.