Compensation decisions for the Group EC

Compensation mix for Group EC 2018

Compensation mix for Group EC 2018 (pie chart)

Compensation mix for Group EC 2017

Compensation mix for Group EC 2017 (pie chart)

The following table covers payments to 14 members of the Group EC for 2018, of whom 11 were active for the full year. The 2017 payments also cover 14 members of the Group EC, of whom 12 were active for the full year.

Download

 

14 members

14 members

CHF thousands

2017

2018

1

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

2

For 2018, subject to shareholder approval at the AGM 2019. For 2017, based on shareholders’ approval at the AGM 2018 of the aggregate amount of short-term variable compensation.

3

Disclosure reflects all awards for a reporting year, ie the 2017 value reflects the fair value of LPP awards granted in April 2017 and the 2018 value reflects the fair value of LPP awards granted in April 2018.

4

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

5

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

6

Amounts are gross before deduction of employee social security contributions. Additional and not included are company contributions to social security systems paid by Swiss Re in line with applicable laws which amounted to CHF 2 984 097 (restated) in 2017 and CHF 2 109 031 in 2018.

Base salaries

12 995

12 265

Allowances1

861

1 159

Funding of pension benefits

2 132

1 928

Total fixed compensation

15 988

15 352

Cash Annual Performance Incentive2

7 069

7 781

Value Alignment Incentive2

5 931

6 559

Leadership Performance Plan3

13 450

13 150

Granted in RSU (50%)

6 725

6 575

Granted in PSU (50%)

6 725

6 575

Total variable compensation

26 450

27 490

Total fixed and variable compensation4

42 438

42 842

Compensation due to members leaving5

721

1 411

Total compensation7

43 159

44 253

The proposed total API amount for 2018 for the Group EC (including the Group CEO) is CHF 14.3 million, which represents a 10.0% increase when compared to 2017 (CHF 13.0 million). This increase should be seen in the context of a very substantial API decrease of circa 29% in 2017 for the Group EC (again including the Group CEO) compared to the previous year. The Compensation Committee and the Board of Directors carefully considered the performance of the Group EC in 2018 and concluded that, given the overall business environment context for the Swiss Re Group and the significant qualitative achievements, a modest API increase compared to last year is warranted. Nevertheless, this amount overall still remains below target levels.

Compensation decisions for the highest-paid member of the Group EC

The table below shows the compensation paid to Christian Mumenthaler, Group CEO (in the role since 1 July 2016):

Download

CHF thousands

2017

2018

1

Benefits or allowances paid in cash. Includes health care and accident insurance benefits, lump sum expenses, transportation, and child and similar allowances.

2

For 2018, subject to shareholders approval at the AGM 2019. For 2017, as part of the aggregate amount of short-term variable compensation approved by the shareholders at the AGM 2018.

3

Disclosure reflects all awards for a reporting year, ie the 2017 value reflects the fair value of the LPP award granted in April 2017 and the 2018 value reflects the fair value of the LPP award granted in April 2018.

4

Amounts are gross before deduction of employee social security contributions. Additional and not included are company contributions to social security systems paid by Swiss Re in line with applicable laws, which amounted to CHF 300 767 in 2017 and CHF 230 930 in 2018.

Base salary

1 400

1 475

Allowances1

35

35

Funding of pension benefits

178

178

Total fixed compensation

1 613

1 688

Cash Annual Performance Incentive2

810

1 063

Value Alignment Incentive2

810

1 063

Leadership Performance Plan3

2 000

2 000

Granted in RSU (50%)

1 000

1 000

Granted in PSU (50%)

1 000

1 000

Total variable compensation

3 620

4 126

Total compensation4

5 233

5 814

The performance of the Group CEO is evaluated against both quantitative targets (as defined in the Group Plan approved by the Board of Directors) and qualitative goals agreed between the Board of Directors and the Group CEO, designed to support long-term business strategy and to drive sustainable performance across the Swiss Re Group. The quantitative results of the Group have been discussed in detail in Performance outcomes 2018.

The Board was very satisfied with the achievement of the Group CEO on qualitative goals. These include, amongst several others, a constructive relationship with regulators worldwide, strong credit ratings and stable credit spreads, successfully representing the Group to our global client base, developing long-term initiatives to build a strong franchise far into the future (such as the ESG investment strategies, the Swiss Re Institute and employee engagement/diversity) and, in particular, leading the decision-making process in large possible, but discontinued corporate transactions.

Overall, the Board of Directors is very satisfied with how effectively the Group CEO is steering the Group despite very challenging conditions.

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 2017 and 2018 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 2018, no payments (or waivers of claims) other than those set out in the section “Compensation disclosure and shareholdings in 2018” 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:

Download

Members of the Group EC

2017

2018

1

The number of shares held on 31 March 2018 when David Cole stepped down from the Group EC was 82 982.

2

The number of shared held on 22 August 2018 when Jean-Jacques Henchoz stepped down from the Group EC was 53 168.

Christian Mumenthaler, Group CEO

68 775

71 733

David Cole, former Group Chief Financial Officer1

82 982

n/a

John R. Dacey, Group Chief Financial Officer

23 671

27 124

Guido Fürer, Group Chief Investment Officer

61 077

66 007

Agostino Galvagni, CEO Corporate Solutions

94 591

99 521

Jean-Jacques Henchoz, former CEO Reinsurance EMEA2

49 020

n/a

Russell Higginbotham, CEO Reinsurance EMEA

n/a

3 918

Thierry Léger, CEO Life Capital

49 841

53 785

Moses Ojeisekhoba, CEO Reinsurance

36 194

38 998

Jayne Plunkett, CEO Reinsurance Asia

34 288

36 264

Patrick Raaflaub, Group Chief Risk Officer

3 944

Edouard Schmid, Group Chief Underwriting Officer

29 161

30 936

J. Eric Smith, CEO Reinsurance Americas

21 400

24 004

Thomas Wellauer, Group Chief Operating Officer

105 390

110 520

Total

656 390

566 754

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:

Download

Members of the Group EC

2017

2018

Christian Mumenthaler, Group CEO

108 779

119 029

David Cole, former Group Chief Financial Officer

57 825

n/a

John R. Dacey, Group Chief Financial Officer

57 825

55 178

Guido Fürer, Group Chief Investment Officer

68 394

68 971

Agostino Galvagni, CEO Corporate Solutions

57 825

55 178

Jean-Jacques Henchoz, former CEO Reinsurance EMEA

46 259

n/a

Russell Higginbotham, CEO Reinsurance EMEA

n/a

26 277

Thierry Léger, CEO Life Capital

54 715

55 178

Moses Ojeisekhoba, CEO Reinsurance

54 715

55 178

Jayne Plunkett, CEO Reinsurance Asia

43 149

44 142

Patrick Raaflaub, Group Chief Risk Officer

54 715

55 178

Edouard Schmid, Group Chief Underwriting Officer

39 678

41 962

J. Eric Smith, CEO Reinsurance Americas

46 259

44 142

Thomas Wellauer, Group Chief Operating Officer

57 825

55 178

Total

747 963

675 591

Loans to members of the Group EC

As per Article 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:

Download

CHF thousands

2017

2018

Total mortgages and loans to members of the Group EC

914

900

Highest mortgage and loan to an individual member of the Group EC:

 

 

Edouard Schmid, Group Chief Underwriting Officer

914

900

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

4 300

4 300