Annual report 2018

Galenica annual report 2018 | 69 Further details on the Remuneration Committee can be found in the Corporate Governance section (see page 52) as well as in the Remuneration Committee Charter, which can be found on the Galenica website (see related links on page 76). Remuneration components In order to attract talented employees, reward performance, promote the loyalty of key talents and ensure their long- term engagement towards Galenica, Galenica offers com- petitive remuneration. The remuneration model is based on three components: a fixed base salary, a short-term bonus and long-term remuneration. Overview of remuneration components Employee remuneration consists of a fixed base salary, which depends on the employee’s position level, and a bonus. The bonus system allows members of the Corporate Executive Committee, Senior Management and Manage- ment to benefit from the profits of the Galenica Group. The achievement of personal targets is assessed after year-end and rewarded accordingly. The CEO, other members of the Corporate Executive Committee and certain members of Senior Management also receive additional long-term remuneration (LTI). The purpose of this variable remuner- ation system is to ensure that all members of Senior Man- agement and Management act and make decisions in such a way as to support the achievement of targets at all levels and thereby contribute to sustained positive results for the Group as a whole, as well as the company to which they belong. This serves to harmonise the interests of sharehold- ers with those of Galenica and its management. Through share participation, identification with the company is fur- ther strengthened. The remuneration of members of the Corporate Executive Committee is strongly linked to the financial performance of the Group and to a lesser part to their individual perfor- mance and the performance of the share price. Exceptional results are recognised and rewarded. The remuneration system rewards short-term success as well as long-term performance and sustainable value crea- tion for customers and shareholders in a balanced way. In order to align the interests of members of the Corporate Executive Committee with the interests of shareholders, a part of the bonus (32%) and the long-term remuneration (LTI) is awarded in shares of Galenica. In addition, after a period of five years, each member of the Corporate Execu- tive Committee is required to hold shares of Galenica equal in value to at least 75% of their fixed annual base salary and target bonus. The weighting of the individual remuneration components depends on an employee’s position level and in particular on their budget responsibility. The greater the employee’s direct influence on the budget, the higher the weighting of the variable component of remuneration. When defining the weighting, setting targets and measuring their achieve- ment, the responsible body (Remuneration Committee or Board of Directors) is always permitted a degree of discre- tion in the application of the criteria mentioned in this report, even if this is not specifically mentioned in individual cases. Overview of remuneration components Fixed base salary Bonus (Short-term Incentive Programme, STI) Long-term remuneration (Long-term Incentive Programme, LTI) Remuneration Report Galenica