Insights

1. Engage proactively with shareholders and proxy advisors
   Engage early and regularly with key voting representatives at major shareholders or proxy advisors, as appropriate.Use these exchanges to discuss the considerations of the Board of Directors and its Compensation Committee and to understand investor perspectives on compensation matters.
   
   
2. Explain the rationale behind the compensation framework
   Summarize the considerations of the Board of Directors regarding the compensation framework, including thebackground to any adjustments made. Describe how the structure supports the company’s business strategy and values, as well as long-term value creation for shareholders.
   
   
3. Show how executive pay aligns with shareholder interests
   Illustrate how the compensation framework aligns the interests of senior management with those of shareholders.Highlight the link between executive compensation, company performance and shareholder outcomes.
   
   
4. Clarify performance metrics and target disclosure
   Explain any “non-IFRS” or “non-GAAP” metrics and the reasons for their use in compensation. Where performancetargets are not disclosed, explain the rationale for this approach.
   Note that the retrospective disclosure of performance targets and achievement for variable compensation has become a common practice in Switzerland and is generally expected by investors.
   
   
5. Define and explain the use of discretion in pay decisions
   Specify any discretion available to the Board of Directors or its Compensation Committee when determiningcompensation, consistent with the “comply or explain” principle. Where discretion may be exercised, provide examples and transparency to mitigate any perception of arbitrariness.
   
   
6. Anticipate and address investor scepticism
   Unusual or non-market compensation approaches often trigger scepticism among investors. Where suchapproaches are adopted, explain how they relate to the company’s specific business model and corporate strategy and how they support shareholder interests.
   
   
7. Enhance the clarity and accessibility of compensation reporting
   Present the compensation report in a clear and structured way. Where helpful, use graphics or visual elementsto improve readability and guide the narrative. Language and structure should support transparency and overall understanding.

We track current Say-on-Pay practices. Access GETCOMPIA here.