2. Foreword by the Chair of the Nomination & Compensation Committee
Dear shareholders,
On behalf of the Nomination and Compensation Committee (NCC), I am pleased to present the 2021 Remuneration Report.
Following the election of the members of the Nomination and Compensation Committee during the Annual General Meeting for 2021, Thomas Bachmann was welcomed as a new member of the Committee.
We look back on an extremely successful, but from an operational point of view very challenging financial year. The situation in the construction industry was positive in most regions. COVID‑19-related catch-up effects largely led to pleasing growth figures. In the last six quarters, net sales for the Geberit Group grew around three times faster than the long-term average. At the same time, this sudden strong growth represented an extremely challenging situation for our entire organisation, particularly in Purchasing, Production, Logistics and Sales. The further increase in results compared to the previous year was based on our structural and financial strength as well as our prudent crisis management right from the start of the COVID‑19 pandemic. This enabled us to further consolidate our position as leading supplier of sanitary products and gain market share.
The Nomination and Compensation Committee performed its regular activities on remuneration matters throughout the year, such as the annual review of the remuneration programmes, the performance goal setting of the Group Executive Board at the beginning of the year and their performance assessment at year end, the determination of the remuneration of the members of the Board of Directors and the Group Executive Board, as well as the preparation of the Remuneration Report and of the say-on-pay votes at the Annual General Meeting.
In particular, the Nomination and Compensation Committee revised the group of companies for remuneration benchmarking in order to reflect the size and complexity of the company and conducted a review of the remuneration levels of the Group Executive Board. The Nomination and Compensation Committee established that the remuneration design is well aligned with the business strategy and shareholders’ interests. There were no other changes to the remuneration programmes for the Group Executive Board for 2021.
There were no changes to the remuneration system of the Board of Directors in the reporting year. The remuneration system and the amount of remuneration for Geberit’s Board of Directors conform to standard market practice and the Board of Directors confirmed that no changes were necessary.
At the 2022 Annual General Meeting, we will request your approval of the total remuneration amount to be awarded to the Board of Directors for the period until the following Annual General Meeting, and the maximum aggregate remuneration awarded to the Group Executive Board for the 2023 business year. Additionally, you will have the opportunity to express your opinion on this Remuneration Report in a consultative vote. You will see in the report that the remuneration awarded to the Board of Directors for the remuneration period ending with the 2022 Annual General Meeting and the remuneration awarded to the Group Executive Board in 2021 are within the limits approved at the 2021 Annual General Meeting and 2020 Annual General Meeting, respectively.
Looking ahead, we will continue to assess and review our remuneration programmes to ensure that they continue to fulfil their purpose in the evolving context in which the company operates. We will pursue an open and regular dialogue with our shareholders as we continue to enhance the remuneration system. Environmental protection, social responsibility and good corporate governance, also known as ESG topics (Environmental, Social and Governance), are growing in relevance. ESG topics and their measurability have been an integral part of Geberit’s corporate strategy and operational implementation since the 1990s. As announced in the 2020 Compensation Report, the Board of Directors approved integrating an ESG target in the remuneration of the Group Executive Board. Starting in 2022, the short-term incentive plan will include a sustainability objective. The additional objective will be based on the company’s sustainability strategy and will include a CO2 emission reduction target.
This report contains all relevant information on the remuneration paid to the Board of Directors and to the Group Executive Board in 2021. Our remuneration system rewards performance in a balanced and sustainable manner and aligns well with shareholders’ interests.
The NCC appreciates your ongoing input and feedback on our executive remuneration programmes and we hope you find this report to be informative. We look forward to your support and feedback at the AGM in April 2022.
Yours sincerely,
Eunice Zehnder-Lai
Chair of the Nomination & Compensation Committee