6. Group Executive Board: Compensation, loans and stock ownership
6.1 Goals and achievement of goals
For the 2024 financial year, the following goals were defined for the Group Executive Board and assessed by the Compensation Committee:
Quantitative targets | Target | Assessment | ||||
KPIs | – Assets under management | 5-10% Growth | Performance below expectation | |||
– Cost-Income ratio | <75% | Expected Performance | ||||
– Return on equity | >20% | Performance below expectation | ||||
Qualitative targets | ||||||
KPIs | – Performance quality of products | 50% outperform benchmark | Performance below expectation | |||
– Organisation, structure and efficiency | Optimisation of the organisation | Performance above expectation | ||||
– ESG | Further development of the ESG-initiatives | Performance above expectation |
2024 was a challenging year for the company and its employees and was characterised by the persistently very challenging market environment for small and mid-cap growth stocks in the healthcare sector with below-average developments on the capital market, which led to a partial reallocation of client assets. Despite the measures taken to streamline the product portfolio and focus the investment process, Bellevue was unable to counter these developments with the realised investment performance of its products and had to report a reduction in client assets under management. The business results achieved, with a reduced earnings base and consolidated net income, did not match Bellevue’s ambitions and the performance of the Group Executive Board fell short of expectations in the overall evaluation.
In addition to focusing on stabilising business development, the Group Executive Board worked consistently on optimising the product portfolio and organisation as well as on increasing efficiency in 2024. A number of structural goals were achieved, such as the definition of an Asian strategy and the repositioning of fixed income/multi-asset class investment strategies and the German business. In addition, the year was used to concretise new growth initiatives. In addition to some established healthcare strategies such as Bellevue Medtech & Services and Bellevue Digital Health, the newly launched products such as Bellevue Obesity Solutions and Bellevue AI Health also performed well. By further expanding its investment expertise and focusing the organisation, Bellevue aims to further underpin its medium- to long-term growth prospects as a specialist asset manager.
6.2 Compensation
CHF | 01.01.–31.12.2024 | 01.01.–31.12.2023 | ||||||
Gebhard Giselbrecht CEO | Total 1) | André Rüegg CEO | Total 2) | |||||
Fixed compensation – in cash | 350 000 | 1 151 250 | 350 000 | 605 000 | ||||
Fixed compensation as indemnification for valuable claims against the previous employer 3) | 1 135 564 | 1 135 564 | – | 300 000 | ||||
– in cash 3) | 225 000 | 225 000 | – | 300 000 | ||||
– in shares | 910 564 | 910 564 | – | – | ||||
– of which in restricted shares with a vesting period and claw back right provisions 3) 6) 7) | 910 564 | 910 564 | – | – | ||||
Non-monetary benefit from voluntary stock purchase programs 4) | – | – | – | – | ||||
Social insurance contributions 5) | 152 243 | 353 747 | 92 998 | 178 259 | ||||
Total fixed compensation | 1 637 807 | 2 640 561 | 442 998 | 1 083 259 | ||||
Short-term variable compensation (profit-based compensation) | 350 000 | 950 000 | 350 000 | 570 000 | ||||
– in shares | 175 000 | 375 000 | – | – | ||||
– of which in restricted shares 6) | 100 000 | 300 000 | – | – | ||||
– of which in restricted shares with a vesting period and claw back right provisions 6) 7) | 75 000 | 75 000 | – | – | ||||
– in cash | 175 000 | 575 000 | 350 000 | 570 000 | ||||
Social insurance contributions 8) | 26 000 | 71 000 | 25 000 | 41 000 | ||||
Total short-term variable compensation | 376 000 | 1 021 000 | 375 000 | 611 000 | ||||
Long-term variable compensation | 54 000 | 219 000 | 93 900 | 93 900 | ||||
– in shares 9) | 54 000 | 237 750 | 93 900 | 93 900 | ||||
– of which long-term incentive plans, investment companies 10) | 54 000 | 219 000 | 93 900 | 93 900 | ||||
Social insurance contributions 8) | 4 000 | 17 502 | 7 000 | 7 000 | ||||
Total long-term variable compensation | 58 000 | 255 252 | 100 900 | 100 900 | ||||
Total compensation | 2 071 807 | 3 916 813 | 918 898 | 1 795 159 | ||||
1) As of December 31, 2024, the Group Executive Board consists of Gebhard Giselbrecht, CEO, Markus Peter, Head Products & Investments, Patrick Fischli, Head Distribution, Stefano Montalbano, CFO and Fabian Stäbler, COO. André Rüegg (former CEO) stepped down from the Group Executive Board as of December, 31, 2023. Michael Hutter (former CFO) stepped down from the Group Executive Board at the end of February 2024.
2) As of December 31, 2023, the Group Executive Board consisted of André Rüegg, CEO and CEO Bellevue Asset Management AG, and Michael Hutter, CFO.
3) Gebhard Giselbrecht, CEO, was paid compensation in the 2024 and 2023 financial years for valuable claims against the previous employer that expired due to the change of company. The compensation was paid partly in cash and partly in restricted shares. The compensation for the 2023 financial year in the amount of CHF 300 000 was subsequently approved by the 2024 Annual General Meeting.
4) This is the amount of the monetary benefit which reflects the difference between the discounted purchase price and the 10-day VWAP for the effective share allocation.
5) The social insurance contributions include compulsory employer contributions to social insurance plans, employer contributions to pension plans and employer contributions to health and accident insurance plans.
6) All shares of the Company were or are valued at market value (volume-weighted average prices during the 10-day trading preceding the date of grant). Compulsory employee contributions to social insurance plans on these amounts were settled in cash, not in the form of shares.
7) The shares are subject to a one-year service period and a one-year claw back right clause.
8) The social insurance contributions include compulsory employer contributions to social insurance plans. With respect to variable compensation that has not yet been paid out, a prospective rate of 7.0% is used to calculate prospective employer contributions to social insurance plans and rounded up. The actual amount due (in the subsequent year) may be lower. Pension plan contributions are not levied on any components of variable compensation, which is not included in the respective insurance coverage.
9) This position includes a long-service award in the form of Bellevue Group shares with an equivalent value of CHF 18 750.
10) Entitlement to a maximum of 5 100 shares of BB Biotech (2023: 1 700 shares of BB Biotech), valued at fair value (closing price on 31.12.2023 and 31.12.2022, respectively).
In accordance with Art. 8 para. 1, section 2 of the Articles of Association, fixed compensation for the current financial year is subject to approval by the Annual General Meeting. For the 2024 financial year (the following figures are presented with the total amount of CHF 300 000 in fixed compensation and CHF 18 920 in social insurance contributions, which were subsequently approved by the 2024 Annual General Meeting for the 2023 financial year), fixed compensation (including fixed remuneration as compensation for valuable claims against the previous employer and the monetary benefit from voluntary stock purchase programs) of CHF 3 284 580 (2023: CHF 1 391 320) was approved. These are made up as follows:
- Maximum fixed compensation of CHF 1 170 000 (2023: CHF 620 000);
- Valuable Claims against previous employers in cash CHF 225 000 (2023: CHF 300 000)
- Valuable Claims against previous employer in shares of the Company CHF 911 000 (2023: none)
- Maximum non-monetary benefit from voluntary stock purchase programs of a maximum of CHF 565 000 (2023: CHF 270 000);
- Maximum employer contributions of CHF 413 580 for compulsory social insurance schemes, as well as other insurance schemes and pension plans (2023: CHF 201 320).
The remuneration actually paid (including social insurance contributions) for the financial year mentioned amounted to CHF 2 640 561 (2023: CHF 1 083 259).
The resolutions of the Annual General Meeting regarding the fixed remuneration for the Group Executive Board for the 2024 financial year were therefore complied with.
The increase in the fixed compensation of the Group Executive Board is mainly related to the expansion of the Group Executive Board by three to a total of five members and the compensation of valuable claims against the new CEO’s previous employer.
The reported short-term variable compensation totaling CHF 1 021 000 must be approved by the 2025 Annual General Meeting in compliance with Art. 8 para. 1 section 3 of the Articles of Association.
Subject to approval, the variable remuneration of CHF 1 021 000 will be paid out in the first half of 2025 as described under 4.2.2. For the portion paid out in shares, the market value of the shares is calculated using the weighted prices over ten days prior to the respective allocation date. The shares are blocked for four years from the grant date (three years for the voluntary participation programme).
The Board of Directors approved a voluntary employee stock ownership plans in each of the 2024 and 2023 financial years. In 2024 and 2023, the Group Executive Board did not exercise any rights from this pool to purchase shares in the company at a discounted purchase price.
The short-term variable compensation (profit-sharing) of the Group Executive Board increased in the financial year compared to the previous year, which is mainly due to the expansion of the Group Executive Board by three to a total of five members. At the same time, these increases were partially offset by the company’s lower operating performance, which had a reducing effect on short-term variable remuneration (profit-sharing).
Under the «BB Biotech Long-term Incentive Plan 2024», certain members of the Group Executive Board have received entitlements of 5 100 shares (2023: 1 700 shares) in BB Biotech. The following performance criteria apply to the entitlement for the assessment period from January 1, 2024 to December 31, 2026:
KPIs | Weighting in % | Parameter | ||
Absolute Performance | 60 | > 10% p.a. = 100% | ||
(share price incl. dividends) | > 9% p.a. = 90% | |||
> 8% p.a. = 80% | ||||
> 7% p.a. = 70% | ||||
> 6% p.a. = 60% | ||||
≥ 5% p.a. = 50% | ||||
<5% p.a. = 0% | ||||
Performance relative to NBI | 20 | Outperform = 100% | ||
(Nasdaq Biotech Index) | Underperform = 0% | |||
Performance relative to SPI | 20 | Outperform = 100% | ||
(Swiss Performance Index) | Underperform = 0% |
The effective number of shares will be allocated based on the KPIs achieved in January 2027.
The percentage ratio of fixed compensation to variable compensation for the entire Group Executive Board is 67% fixed compensation and 33% variable compensation (2023: 52% fix and 48% variable). For the CEO, the total amount of fixed compensation amounts to 79% and the variable compensation is 21% (2023: 48% fix and 52% variable). The increase in the fixed remuneration component in the 2024 financial year is due to the compensation paid to the CEO for valuable claims against the previous employer.
The values in the table above differ in certain respects from the remuneration report in note 9 «Transactions with related companies and persons» of the consolidated financial statements 2024 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 on conditions other than the customary market conditions.
The company had concluded a one-year non-competition and non-solicitation agreement with André Rüegg, former CEO of Bellevue Group AG and Bellevue Asset Management AG and member of the Group Executive Board, which the company considers to be commercially justified and subject to compensation in accordance with Art. 31 para. 4 of the Articles of Association. In this context, compensation of CHF 396 000 was paid for the months of January to December 2024. This compensation was regulated in a termination agreement. André Rüegg left Bellevue Group on December 31, 2023. In addition, CHF 108 000 was paid to André Rüegg for consulting services for various Group projects.
The company had concluded a one-year non-competition and non-solicitation agreement with Michael Hutter, former CFO of Bellevue Group AG and member of the Group Executive Board, which in the company’s view was commercially justified and subject to compensation in accordance with Art. 31 para. 4 of the Articles of Association. In this context, compensation of CHF 135 000 was paid for the months of April to December 2024. Additional costs of CHF 8 514 were incurred on this amount for employer contributions to statutory social insurance. This compensation was regulated in a termination agreement. Michael Hutter left Bellevue Group on March 31, 2024.
6.3 Loans and credits
At the end of 2024 and 2023, no loans and no credits had been granted either to the members of the Group Executive Board or former members of the Group Executive Board or any related parties.
6.4 Holdings of shares in the Company
The members of the Group Executive Board owned the following Company shares at the end of 2024 and 2023:
Number of shares | 31.12.2024 | 31.12.2023 | ||
Gebhard Giselbrecht, CEO 1) | 44 403 | n/a | ||
Markus Peter, Head Products & Investments 2) | 174 832 | n/a | ||
Patrick Fischli, Head Distribution 2) | 55 452 | n/a | ||
Stefano Montalbano, CFO 2) | 16 861 | n/a | ||
Fabian Stäbler, COO 3) | – | n/a | ||
André Rüegg, CEO 4) | n/a | 93 009 | ||
Michael Hutter, CFO 5) | n/a | 38 125 |
1) Gebhard Giselbrecht was appointed as a member of the Group Executive Board with effect from January 1, 2024.
2) Markus Peter, Patrick Fischli and Stefano Montalbano were appointed as members of the Group Executive Board with effect from March 1, 2024.
3) Fabian Stäbler was appointed as a member of the Group Executive Management with effect from July 1, 2024.
4) André Rüegg stepped down from the Group Executive Board with effect from December 31, 2023.
5) Michael Hutter stepped down from the Group Executive Board with effect from February 29, 2024.
6.5 Activities in other companies
Gebhard Giselbrecht, CEO
Bellevue Funds (Lux) SICAV | Luxembourg | Member of the Board of Directors | Private |
Markus Peter, Head Products & Investments
Personalvorsorgestiftung der Bellevue Group | Switzerland | Chairman of the Board of Trustees | Private |
Patrick Fischli, Head Distribution
Bellevue Funds (Lux) SICAV | Luxembourg | Member of the Board of Directors | Private |