Compensation decisions for the Group EC

The 2019 figures in the following table cover payments to 16 individuals who held a Group EC position at one point in 2019 (of whom nine were active on the Group EC for the full year) and legally or contractually required payments made in 2019 to an individual who stepped down from the Group EC in 2018. The 2018 figures cover payments to 14 individuals who held a Group EC position at one point in 2018 (of whom 11 were active on the Group EC for the full year). The number of Group EC positions was increased from 12 to 14 in 2019: the existing positions of Group Chief Human Resources Officer and Group Chief Legal Officer were added to the Group EC.

Overall, total variable compensation for individual members of the Group EC (including the Group CEO) who were active on the Group EC for the full year 2019 ranged from 137% to 238% of total fixed compensation.

The proposed total API (including VAI) amount for 2019 for the Group EC (including the Group CEO) is CHF 14.1 million. This includes pro-rata payments in relation to the active period on the Group EC for individuals who joined or left the Group EC in 2019. For comparison purposes, the total API (including VAI) amount for 2018 includes full-year payments for all individuals who held a Group EC position at one point during the year 2018 (ie no pro-rata approach has been applied). If a pro-rata approach had been applied on the 2018 disclosure, this would have resulted in API (including VAI) payments of CHF 13.7 million.

The Compensation Committee and the Board of Directors carefully considered the performance of the Group EC in 2019 and concluded that, given the overall business environment for the Swiss Re Group and the 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):

Realised compensation for the highest-paid member of the Group EC

The chart below shows the compensation granted to and realised by Christian Mumenthaler, Group CEO (in the role since 1 July 2016) during 2019.

CHF thousands

¹ For 2019, subject to shareholder approval at the AGM 2020.

² The LPP 2017 grant took place on 1 April 2017 and was based on a share price of CHF 90.70 (at the grant valuation date of 24 February 2017). Since vesting of the LPP 2017 will occur after the publication of this report, the closing share price at year-end 2019 of CHF 108.70 was used to estimate the realised value.

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 drive sustainable performance across the Swiss Re Group.

While the Group’s financial performance in 2019 was below target, the Board of Directors recognised that an outstanding investment result was achieved based on decisive action on asset allocation strategy, very disciplined continuation of significant improvements on the cost side without cutting too deep into the knowledge base of the Group and a strong delivery on the agreement to sell ReAssure (subject to regulatory and anti-trust approvals).

In particular, the Board of Directors was satisfied with how decisively the turn around at Corporate Solutions was initiated under the strong and very close guidance of the Group CEO: the underwriting portfolio was pruned, new talent was brought in, costs were cut and at the same time morale and fighting spirit in the Business Unit were maintained. The Board of Directors also appreciated the Group’s efforts in the areas of technology, digitalisation and particularly in developing successful new business models.

Overall, the Board of Directors was pleased with the Group CEO’s effective management of the Group despite 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 2018 and 2019, 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 2019, no payments (or waivers of claims) other than those set out in the section “Compensation disclosure and shareholdings in 2019” 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:

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:

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 (currently CHF 3 million per member of the Group EC). In 2019, all existing loans and mortgates have been transferred to an external party. No new loans and mortgages were offered as of 1 July 2019.

For loans and mortgages offered up until the transfer, in general, credit was secured against real estate or pledged shares. The terms and conditions of loans and mortgages were 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 had no agreed maturity dates. The basic preferential interest rates equaled the corresponding interest rates applied by the Zurich Cantonal Bank (“Zürcher Kantonalbank”) minus one percentage point. Where fixed or floating interest rates were preferential, the value of this benefit for the period from 1 January 2019 until the transfer has been included under “allowances” in the tables covering compensation decisions for Group EC members.

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