We place emphasis on fair compensation that explicitly rewards skills and performance. Women and men in the same position and at the same performance level are in the same pay scale and wage model. This is valid for all our business locations. We are aware that the ratio of female to male salaries in our company is of importance to our stakeholder groups and our business success. It is nevertheless omitted from this report, on the one hand, for confidentiality reasons and, on the other, because functions are not strictly comparable and certain aspects of the compensation system are not included.
We also endeavour to pay competitive compensation so that we retain and recruit qualified employees for our Group. Our salaries are gender neutral. Our compensation structure is aligned with customary market values in the banking sector. Salaries within the LLB Group amounted to a total of CHF 102.4 million in 2015 (2014: CHF 109.7 million). 2015 saw not only a performance-related pay award of 0.95 percent but also Group Human Resources had salaries across the board reviewed externally. The results of the review will be evaluated in spring 2016.
The LLB Group’s modern variable compensation system, which was introduced in 2013, is exemplary for the banking sector. Compensation consists of the fixed salary and the variable target compensation with bonus provisions.
Clearly defined target compensation ensures that employees know the amount of both their fixed and variable compensation, both in those cases where they achieve 100 percent of the annual objectives agreed upon and also in cases of increased performance or failure to achieve the annual objectives. The LLB Group’s transparent variable compensation system is attractive to employees who are high achievers. Concomitantly, the bonus / malus provisions add to an increase in quality through more self-management and more self-responsibility.
Besides individual performance, group performance is also crucial for determining a manager’s variable compensation. Key management performance figures are assessed in relation to those of a peer group of comparable banks using the Market Adjusted Performance Indicator (MAPI). Once a year, the target compensation is reviewed. Our employment contracts are individually negotiated in meetings between employees and their supervisors and are not based on collective pay negotiations.