6. Group Executive Board: Compensation, loans and stock ownership

6.1 Goals and achievement of goals

For the 2022 financial year, the following goals were defined for the Group Executive Board and assessed by the Compensation Committee:

After an extraordinarily successful 2021, 2022 was a very challenging year for the company and its employees, marked by market upheavals as a result of geopolitical crises, inflation and significant interest rate increases. Bellevue was exposed to the ongoing market turmoil in almost all areas and could not escape the trend in the capital markets. In addition, investment performance against benchmarks decreased in 2022. In the overall evaluation, the performance of the Group Executive Board falls short of expectations against the backdrop of a significantly reduced revenue base and net profit. It should be emphasized, however, that despite the challenging environment, the broad-based customer base has proved stable and it has also succeeded in cushioning the impact of the lower revenue base by significantly reducing the cost base, among other things by means of the entrepreneurial compensation model. In addition, the Executive Board used the year 2022 to further concretize important strategies for the future and implement organizational changes. The development of activities in the Private Markets area was encouraging. The establishment of a private equity secondaries team and the launch of the first secondaries fund in particular open up new growth prospects. In addition, the focus was primarily on the further development of existing products. For example, with the addition of further experts to the investment team of the «flagship product» BB Biotech AG, additional competencies were built up, for example in the field of neurology. In addition, various new product ideas were positioned and will be further developed in 2023. The integration of the German Subsidiaries into the business unit Bellevue Asset Management was successfully completed and the strengthening of the team also created the basis for more intensive market development in Germany. The focus on sustainable, value-oriented and responsible further development of the Group and its investment solutions, taking into account sustainability and ESG criteria, was intensified and will be driven forward in 2023, particularly in the recruitment of new investment experts with a view to diversity and inclusion.

6.2 Compensation

In compliance with Art. 8 para. 1, section 1 of the Articles of Association, fixed compensation for the current financial year is subject to approval by the Annual General Meeting. Fixed compensation of CHF 1 175 000 (2021: CHF 1 166 500) was approved for the 2022 financial year. The actual payout for the aforementioned financial year (including compulsory employer contributions to social insurance plans) was CHF 1 017 634 (2021: CHF 1 124 190). 

The reported short-term variable compensation totaling CHF 1 322 955 must be approved by the 2023 Annual General Meeting in compliance with Art. 8 para. 1 section 4 of the Articles of Association.

Subject to approval, the variable compensation of CHF 1 322 955 will be paid out in the first half of 2023 in accordance with the explanations under 4.2.2. For the portion paid out in shares, 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 (voluntary employee stock ownership plan three years) from the date of transfer.

In 2022 and 2021, the Board of Directors authorized a voluntary employee stock ownership plan. The members of the Group Executive Board were allocated to purchase 8 200 shares (2021: 16 755 shares) of the Company from the given pool at a discounted price of CHF 23.75 per share (2021: 31.75 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 benefit is subject to the approval of shareholders at the pending Annual General Meeting. The shares were blocked for three years from the date of transfer.

The short-term variable compensation (profit-sharing) of the Group Executive Board decreased by approximately 60% in the financial year compared to the previous year due to the reduced operating performance of the company.

The percentage ratio of fixed compensation to variable compensation for the entire Group Executive Board is 41% fixed compensation and 59% variable compensation (2021: 25% fix and 75% variable). For the CEO, the total amount of fixed compensation amounts to 33% and the variable compensation is 67% (2021: 19% fix and 81% variable).

The values in the table above differ in certain respects from the Remuneration Reported in note 9 «Transactions with related companies and persons» of the consolidated financial statements 2022 of Bellevue Group AG , which were prepared in accordance with the International Financial Reporting Standards (IFRS). The differences relate to the valuation date of stock awards in connection with the bonus and the individual long-term incentive plans, which are subject to service period conditions. Under IFRS, their value is spread over the future vesting period («service period»), but for the purposes of this report, the amount granted is fully recognized on the date of grant.

During the reporting year, no compensation was paid to related parties of members of the Group Executive Board.

6.3 Loans

At the end of 2022 and 2021, no loans had been granted either to the members of the Group Executive Board or former members of the Group Executive Board.

6.4 Holdings of shares in the Company

The members of the Group Executive Board owned the following Company shares at the end of 2022 and 2021:

6.5 Activities in other companies

André Rüegg, CEO

Michael Hutter, CFO