5. Board of Directors: Compensation, loans and stock ownership

5.1 Compensation

In compliance with Art. 8 para. 1, section 1 of the Articles of Association, fixed compensation must be approved by the Annual General Meeting for the term of office extending to the next scheduled Annual General Meeting. Fixed compensation of CHF 796 000 (2018/2019: CHF 1 367 500) was approved for the period from the 2019 AGM to the 2020 AGM. The actual amount paid (including compulsory employer contributions to social insurance plans) for the aforementioned period was CHF 782 719 (2018/2019: CHF 1 332 541). For the period from 2020 AGM to the 2021 AGM an amount of CHF 661 000 was approved.

The reported variable compensation for the business year 2020 totaling CHF 197 271 must be approved by the 2021 Annual General Meeting in compliance with Art. 8 para. 1 section 2 of the Articles of Association.

Subject to approval, the payment of the variable compensation in restricted shares of CHF 144 000 (plus compulsory employer contributions to social insurance plans in the amount of CHF 3 000) will be made in the form of Company shares at fair value in the first half-year 2021. The fair value of the shares is calculated based on the volume-weighted average prices paid during a 10-day period preceding the respective date of transfer. The shares are blocked for a period of four years from the date of transfer.

In 2020, the Board of Directors authorized a voluntary employee stock ownership plan. The members of the Board of Directors were entitled to purchase 8 010 shares of the Company from the given pool at a discounted price of CHF 17.65 per share. This represented a discount of approximately 25% on the quarterly VWAP prior to the date the purchase right was granted. The difference between the 10-day VWAP on the date the shares are actually transferred and the purchase price corresponds to the monetary benefit. This cash compensation is subject to the approval of shareholders at the AGM. The shares were blocked for 3 years from the date of transfer.

In the 2020 financial year one member of the Board of Directors of an associated company invoiced the amount of CHF 0.1 million (2019: CHF 0.1 million) for advisory services.

No compensation was paid to former members of the Board of Directors after their resignation in the 2020 financial year, nor in the preceding year.

The percentage ratio of fixed compensation to variable compensation for the entire Board of Directors is 77% fixed compensation and 23% variable compensation (2019: 79% fixed and 21% variable).

In previous years, the compensation of the Board of Directors was presented in the Remuneration Report based on cash flow data. As a result of the advance payment in the preceding quarter, the period depicted in the Remuneration Report was from AGM to AGM. In the Remuneration Report for 2020 the compensation of the Board of Directors is depicted based on the actual performance periods. The corresponding figures for the previous year were restated to match the current method of presentation. The restatement of the previous year's figures resulted in only marginal changes.

5.2 Loans

In the past, loans granted to members of the Board of Directors were arranged through Bank am Bellevue AG. Following the divestment of Bank am Bellevue AG, there are no longer any outstanding loans with members of the Company’s governing or management bodies. The interest rate for Lombard loans was fixed at 1.0% in October 2018.

There were no outstanding loans to former members of the Board of Directors that had been granted at market terms.

5.3 Holdings of shares in the Company

The number of shares in the Company held by the members of the Board of Directors at the end of 2020 and 2019 were as follows: