Compensation in 2021

For the 2021 business year, the members of the Board of Directors received a fixed compensation of CHF thousands 902. Contributions to benefit plans and other social contributions amounted to CHF thousands 109. The fixed compensation was paid in cash (CHF thousands 743) as well as in the form of an entitlement to acquire LLB shares (CHF thousands 159). 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 decreased by CHF thousands 46 or 4.4 per cent. The lower compensation expense in 2021 was attributable mainly to the fact that from the beginning of November 2020 up to the General Meeting of May 2021 the Board of Directors temporarily consisted of six members. It has since been made up of seven members again.

For the 2021 business year, the members of the Group Executive Board received a fixed compensation of CHF thousands 3’212 and a variable compensation of CHF thousands 1’264. Contributions to benefit plans and other social contributions amounted to CHF thousands 1’071. 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 2021 (CHF 52.47). The variable compensation for the members of the Group Executive Board was, on average, approximately 39.1 per cent of the fixed compensation or 22.7 per cent of total compensation.

The total compensation of the members of the Group Executive Board in 2021 decreased by CHF thousands 676 or 10.9 per cent. The lower compensation expense in 2021 was attributable mainly to the fact that the Group Executive Board was comprised of only five members following the stepping-down of Roland Matt as Group CEO and his definitive departure at the end of May 2021. The variable compensation decreased by CHF thousands 206 or 14.0 per cent. The performance of the LLB share was worse in the 2021 business year than the performance of the comparable group. The total shareholder return (TSR) of LLB was 2.0 per cent and thus below the TSR of the peer group (11.1 %). The relative MAPI was therefore minus 9.1 percentage points (previous year: minus 7.0 percentage points). Consequently, the degree of objective attainment for the variable target compensation is 77.3 per cent (previous year: 82.5 %).

The total compensation of the members of the Board of Directors and the members of the Group Executive Board for the 2021 business year is reported on an accrual basis. The variable compensation was charged to the 2021 income statement. Payment of the STI to the members of the Group Executive Board will be made in the first quarter of 2022. 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 Executive Board holds more than 0.1 per cent of the voting rights.

Loans to key management personnel

All mortgage loans to member of management in key positions and related parties are fully secured.

At 31 December 2021, the maturities of the fixed mortgages for the members of the Board of Directors and related parties ranged between 15 and 51 months (previous year: between 3 and 63 months) at standard market client interest rates of 0.75 to 1.25 per cent per annum (previous year: 0.95 to 1.65 %). Following its expiry, a mortgage was reissued at new market rates.

At 31 December 2021, the maturities of variable mortgages for members of the Board of Directors and related parties extended to a maximum of 1 month (previous year: 1 month) at standard market client interest rates of 0.80 to 0.95 per cent per annum (2020: 0.95 %). Following expiry, these are extended for a further 3 months providing they are not revoked. One variable mortgage was reissued at market conditions.

At 31 December 2021, the maturities of fixed mortgages for members of the Board of Management ranged between 0 and 42 months (previous year: between 1 and 118 months) at interest rates of 1.05 to 1.80 per cent per annum. (2020: 0.46 to 1.80 %).

The fair value of the collateral of the newly issued mortgages amounted to CHF thousands 1'055.

Of the total amount of mortgages for the members of the Board of Management, CHF thousands 500 (previous year: CHF thousands 1'500) was granted at the preferential interest rate for staff, the remainder was subject to the standard market client interest rate. No other loans were issued to the Board of Management (2020: none).

No allowances for loans and other credit lines to management were necessary. LLB granted third party guarantees amounting to CHF thousands CHF 500 (previous year: CHF thousands 168) for management and related parties. In addition, LLB confirmed that it would extend two mortgages.