3. Shareholder feedback: our responses
At our 2024 Annual General Meeting, our Remuneration Report for the reporting year 2023 was supported by 61% of the votes. The Board of Directors and the NCC took this outcome seriously and engaged in a dialogue with institutional shareholders and proxy advisors to understand and address their concerns. The concerns raised were about the transparency of our reporting on remuneration items and about some elements of the remuneration system for our Group Executive Board (GEB).
The table below summarises the main concerns raised by shareholders and proxy advisors and the actions Geberit has taken to address them.
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Concern raised |
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Geberit’s answer |
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Disclosure |
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Insufficient ex-post disclosure of STP targets and achievement levels. |
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The disclosure of the Group financial and ESG KPIs was enhanced by defining each KPI and its weighting (section 7.2). The achievement of each KPI and related payout level is newly disclosed in section 9.2. |
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Insufficient ex-post disclosure of the LTP target, achievement and vesting level. |
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The achievement level and the vesting level of the LTP allocation granted in 2022 (performance period 2022–2024) is newly disclosed in section 9.2. |
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In 2023, the weight of individual performance in the STP was increased from 14% to 20% without further explanation. |
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Management levels reporting to the Group Executive Board have 20% of their STP measured on individual performance. The aim of this adjustment was to align the Group Executive Board and their teams. |
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20% of the STP is based on individual performance criteria that lack clear definition or disclosure, making this portion of the STP appear discretionary and lacking transparency in assessment. |
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The disclosure has been enhanced. The individual performance mechanism is described in section 7.2 and its assessment is described in section 9.2. |
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GEB remuneration system |
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The LTP performance corridor was reduced in 2023 from |
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The adjustment of the performance corridor in our LTP from +/-6 percentage points to +/-4 percentage points is a refinement designed to increase the rigour of the plan. In addition, this narrower corridor creates a more challenging payout structure. The target level and maximum payout potential remain unchanged. It raises the bar for achieving the minimum threshold and strengthens the pay-for-performance link. |
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The LTP has one absolute metric only (ROIC) and it is also used in the STP. |
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The Board reflects on the addition of a second metric to the LTP starting in 2026. The Board however considers ROIC to be the most appropriate metric for driving Geberit’s value creation. It is highly effective at measuring capital allocation efficiency, which aligns management incentives with sustainable, strategic decision-making. ROIC is an operational KPI with a proven correlation to long-term shareholder value creation. As we aim to see returns as soon as possible and enforce disciplined capital investment, its objective measurability makes it an ideal metric for inclusion in both Geberit’s STP and LTP plans. |