Compensation framework for the Board of Directors
The objective in compensating members of the Board of Directors is to attract and retain experienced individuals who are highly motivated to perform a critical role in the strategic oversight of Swiss Re and to contribute their individual business experience and expertise. The structure of compensation for members of the Board of Directors must, however, take account of the way their contribution to the success of Swiss Re differs from that of the members of the Group EC.
It is important that the compensation components are structured to achieve a strong alignment with the interests of the shareholders of Swiss Re. In line with best practice, a significant portion (40%) of the compensation for the Board members consists of shares.
The maximum aggregate amount of compensation for the members of the Board of Directors is approved by the AGM in advance of the term of office for which the Board members are elected. The Board members receive no variable or performance-based compensation. The fee level for each Board member, subject to their re-election, is reviewed annually.
Fees for the members of the Board of Directors are delivered 60% in cash and 40% in shares. The shares have a four-year blocking period.
Roles and time commitment
The requirements for memberships of boards of directors of complex, international, listed financial institutions, in terms of qualifications and skills, are constantly increasing. Swiss Re Ltd’s Board of Directors has a special skill set including experience in key sectors such as insurance and reinsurance, finance, accounting, capital markets, risk management and regulatory matters as well as leadership and decision-making experience in large, complex financial institutions. The mandate also demands significant commitment, integrity and intercultural communication competence. The prevalence of these qualifications and skills ensures that Swiss Re Ltd has the relevant expertise required for active involvement and supervision of an international listed company. The fees for the members of the Board of Directors reflect different responsibilities and committee memberships. The individual levels of pay therefore vary.
Certain committees, such as the Audit Committee and the Finance and Risk Committee, meet more frequently or hold longer meetings, and hence have higher workloads. The table in the Work methods section of the Financial Report provides an overview of the meetings of the Board of Directors and its committees held in 2018.
The Chairman of the Board of Directors devotes himself full-time to his role. In defining the position of Chairman as a full-time role, Swiss Re applies best practice for regulated, complex financial institutions. In particular, he leads the Board of Directors, coordinates the work of the Board of Directors and its committees, convenes the Board and committee meetings, establishes the agendas and presides over Board meetings. The Chairman also leads the Chairman’s and Governance Committee, which develops and continually adapts Swiss Re’s governance to regulatory and corporate requirements. The Chairman presides over General Meetings of Shareholders and represents the Swiss Re Group towards its shareholders in industry associations and in the interaction with other stakeholders such as the media, political and regulatory authorities, government officials and the general public. The Chairman keeps regular contact with our Group regulator FINMA.
The Vice Chairman, who is also the Lead Independent Director, acts as a deputy of the Chairman, if the Chairman is prevented from performing his duties or in potential conflict of interest situations. The Board of Directors may assign further tasks to the Vice Chairman.
In line with Swiss law, and as outlined in the Articles of Association, the aggregate compensation for the members of the Board of Directors, for the next term of office, is subject to shareholder approval at the AGM.
Subsidiary boards of directors
The majority of the board members at subsidiary level are Swiss Re executives. They do not receive any additional fee for their services in these roles. The non-executive members of the subsidiary boards receive their fees 100% in cash. When a member of the Board of Directors of Swiss Re Ltd also serves on the board of a subsidiary, the aggregate compensation of the Board of Directors proposed to the AGM for approval also includes any subsidiary board fees.