Compensation in 2020

For the 2020 business year, the members of the Board of Directors received a fixed compensation of CHF thousands 952. Contributions to benefit plans and other social contributions amounted to CHF thousands 105. The fixed compensation was paid in cash (CHF thousands 783) as well as in the form of an entitlement to acquire LLB shares (CHF thousands 169). The entitlement to acquire LLB shares is subject to a blocked period of three years.

In comparison with the previous year, the total compensation of the members of the Board of Directors increased by CHF thousands 32 or 3.1 per cent. The higher compensation expense in 2020 was attributable mainly to the fact that up to the General Meeting of May 2019 the Board of Directors was composed of six members. Up until the resignation of Georg Wohlwend as the Chairman of the Board of Directors at the beginning of November 2020, the Board consisted of seven members. Since then, it has had six members.

For the 2020 business year, the members of the Group Executive Board received a fixed compensation of CHF thousands 3'570 and a variable compensation of CHF thousands 1'470. Contributions to benefit plans and other social contributions amounted to CHF thousands 1'183. The fixed compensation was paid in cash. The variable compensation was paid in cash (50 %) as well as in the form of an entitlement to acquire LLB shares (50 %), which is subject to a blocked period of three years. The number of shares for the share-based compensation is calculated from the average share price of the last quarter of 2020 (CHF 53.80). The variable compensation for the members of the Group Executive Board was, on average, approximately 41.2 per cent of the fixed compensation or 23.6 per cent of total compensation.

The total compensation of the members of the Group Executive Board in 2020 increased by CHF thousands 90 or 1.5 per cent. This increase (plus CHF thousands 186) was primarily the result of the salary adjustments effective as of 1 January 2020. There was also an increase in contributions to benefit plans and other social contributions of CHF thousands 49. The variable compensation, on the other hand, decreased by CHF thousands 144 or 8.9 per cent. The performance of the LLB share was worse in the 2020 business year than the performance of the comparable group. The total shareholder return (TSR) of LLB was minus 12.3 per cent and thus below the TSR of the peer group (minus 5.3 %). The relative MAPI was therefore minus 7.0 per cent (previous year: minus 2.5 %). Consequently, the degree of objective attainment for the variable target compensation is 82.5 per cent (previous year: 93.7 %).

The total compensation of the members of the Board of Directors and the members of the Group Executive Board for the 2020 business year is reported on an accrual basis. The variable compensation was charged to the 2020 income statement. Payment of the STI to the members of the Group Executive Board will be made in the first quarter of 2021. The entitlement to acquire LLB shares by the Group Executive Board (LTI) and the Board of Directors is subject to a blocked period of three years.

Details of the compensation and the participations of the members of the Board of Directors and the Group Executive Board, as well as loans to them are shown in the following table.

Compensation of key management personnel

Shareholdings of related parties

No member of the Board of Directors or the Board of Management owns more than 0.1 per cent of the voting rights.

Loans to key management personnel

At 31 December 2020, the maturities of the fixed mortgages for the members of the Board of Directors and related parties ranged between 3 and 63 months (previous year: between 15 and 63 months) at standard market client interest rates of 0.95 to 1.65 per cent per annum (previous year: 0.95 to 1.65 %). One variable mortgage was granted at standard market conditions. The remaining term is 1 month with an interest rate of 0.95 per cent (previous year: remaining term of 1 month with an interest rate of 0.95 per cent).

At 31 December 2020, the maturities of the fixed mortgages for the members of the Board of Management ranged between 1 and 118 months (previous year: between 0 and 73 months) at interest rates of 0.46 to 1.80 per cent per annum (previous year: 0.60 to 1.80 %). This includes two newly granted fixed mortgages. Two variable mortgages were also granted at standard market conditions. The remaining term is 1 month with an interest rate of 0.65 per cent (previous year: none).

The fair value of the collateral for the newly issued mortgages amounted to CHF thousands 3'142.

Of the total amount for mortgages for the members of the Board of Management, CHF thousands 1'500 (previous year: CHF thousands 1'000) are granted at the preferential interest rate for staff, the remainder is subject to the standard market client interest rate. Other loans to the Board of Management were not granted (previous year: none).

No allowances for loans and other credits to management were necessary. LLB issued guarantees to third parties on behalf of management or related parties totalling CHF thousands 168 (previous year: CHF thousands 168).