Compensation policy
On 18 August 2011, the Board of Directors issued the Group regulation “Compensation policy of the LLB Group” for Liechtensteinische Landesbank AG and its Group companies (revised on 1 February 2025). It is based, among other things, on the provisions of the Banking Law, the Banking Ordinance, the EU CRD Directive, the CRR regulations and other delegated regulations and EBA guidelines. The LLB Group applies these provisions in a manner that is commensurate with its size and organisation and the complexity of its business.
The Group regulation “Compensation policy of the LLB Group” regulates the framework for the Group-wide compensation policy, in particular its alignment to risk management. It defines the basis, values and objectives and sets out the minimum requirements for the design of the compensation systems. In addition, it regulates reporting as well as responsibilities. The regulation applies particularly to persons identified as risk takers on an annual basis. The Group companies issue supplementary compensation guidelines that take into consideration special legal regulations.
As a company exempt from Art. 732 ff. of the Swiss CO, Liechtensteinische Landesbank has not laid down any regulations on compensation, participation or loans. The Board of Directors has also issued the Group regulation “Compensation standards of LLB & LCH & ASM” (revised on 1 February 2025).
The compensation policy is in line with the business strategy and values of the LLB Group. It is based on the following principles:
- Long-term orientation and risk adjustment: Compensation promotes long-term development, sustainable value creation and responsible risk-taking behaviour. It supports long-term client and employee retention. The compensation policy must create incentives that ensure the appropriate risk-taking behaviour by individuals in order to counteract any conflicts of interest. The LLB Group implements these principles also in target agreements.
- Foundation of trust: The compensation regulations are based on mutual trust as performance appraisals involve time differences and subjective elements. Thus, there is discretionary scope in determining variable compensation.
- Performance and success orientation: Compensation rewards individual and company-related performance. The focus on the Group’s success strengthens alignment with long-term interests and fosters the retention of top performers. Acknowledging individual performance fosters motivation.
- Simplicity, clarity and comprehensibility: The compensation models are designed to be understood by both employees and third parties alike.
- Fair compensation in accordance with responsibilities and management level: The value of the functions and the requirements of the management levels are reflected fairly and transparently.
- Group orientation: A share option programme strengthens identification with the Group and alignment with its long-term success.
- Freedom from discrimination: Compensation decisions are based solely on qualifications, performance, conduct and objective corporate considerations.
The compensation policy defines the objectives, processes and requirements as regards compensation design. It also contains rules for the alignment between compensation and risk management. It is designed in such a way that sound and effective risk management with regard to dealing with risks, such as sustainability risks, is taken into account and promoted. This is ensured, among other things, by adequately addressing risks with regard to sustainability aspects and business performance. The LLB Group applies these principles also to the corresponding target agreements with relevant persons. The compensation model specifies the ratio between fixed and variable components as well as the allocation mechanisms.