10 Employee benefits
10.1 Number of employees
| 2014 | 2015 |
FTE (full-time equivalent) |
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Employees – year-end | 1,261 | 1,368 |
Employees – average | 1,265 | 1,368 |
10.2 Personnel expenses
Personnel expenses include the following:
| Notes | 2014 | 2015 |
CHF 1,000 |
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Salaries and wages |
| 116,131 | 121,707 |
Social security |
| 15,468 | 15,450 |
Post-employment benefits |
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Thereof defined contribution plans |
| 1,267 | 1,400 |
Thereof defined benefit plans | 10.3 | 6,451 | (184) |
Share-based payment | 10.4 | 5,288 | 7,515 |
Termination benefits |
| – | 227 |
Other personnel expenses |
| 3,525 | 3,698 |
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Total personnel expenses |
| 148,130 | 149,813 |
10.3 Liability for post-employment benefits: defined benefit plans (IAS 19)
10.3.1 Characteristics of defined benefit plans and risks associated with them
| 2014 | 2015 | ||||
CHF 1,000 | Swiss plans | International plans | Total | Swiss plans | International plans | Total |
Number of plans | 4 | 3 | 7 | 6 | 3 | 9 |
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Actives |
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Number | 427 | 107 | 534 | 580 | 101 | 681 |
Defined benefit obligation (CHF 1,000) | 91,435 | 4,753 | 96,188 | 106,054 | 4,439 | 110,493 |
Weighted average duration in years | 24.2 | 10.9 | 23.7 | 22.4 | 10.9 | 21.9 |
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Retirees |
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Number | 25 | – | 25 | 26 | – | 26 |
Defined benefit obligation (CHF 1,000) | 1,062 | – | 1,062 | – | – | – |
Weighted average duration in years | 16.4 | – | 16.4 | 15.8 | – | 15.8 |
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Total |
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Number | 452 | 107 | 559 | 606 | 101 | 707 |
Defined benefit obligation (CHF 1,000) | 92,497 | 4,753 | 97,250 | 106,054 | 4,439 | 110,493 |
Weighted average duration in years | 23.1 | 10.9 | 22.5 | 21.5 | 10.9 | 21.1 |
The Group expects to contribute CHF 5.3 million to its defined benefit plans in 2016.
Within the Group, various defined benefit plans exist, which differ in their purpose and financing according to local needs:
Country | Benefits | Funded/ Unfunded | Description and risks |
Switzerland (Swiss plans) | Retirement, death-in-service and disability benefits | Funded | Nature of the benefits provided The pension plans of Tecan Group Ltd., Tecan Schweiz AG, Tecan Sales Switzerland AG and Tecan Trading AG are plans with guarantee of a minimum interest credit on the savings and fixed conversion rates at retirement. Disability and death benefits are defined as percentage of the insured salary.
Regulatory framework The plan provides benefits based on the LPP/BVG law, which stipulates the minimum requirements of the mandatory employer-sponsored pension plan in Switzerland. In particular, annual salary up to CHF 84,600 (amount in 2015) must be insured and the financing is age-dependent with contribution rates in per cent of the insured salary ranging from 7 % to 18 %. The conversion rate to calculate the annuity based on the accrued savings capital is 6.8 % at normal retirement age (65 for men and 64 for women).
Under LPP/BVG law, the plan must be fully funded on a static basis at all times. In case of underfunding, recovery measures must be taken, such as additional financing from the employer or from the employer and employees, or reduction of benefits or a combination of both.
Specific plan rules The saving credits for the retirement benefits are defined in percentage of the insured salary. The saving credits for the part of the annual salary between CHF 24,675 and CHF 84,600 are age-dependent and range from 8 % to 19 %. The saving credits for the part of the annual salary above CHF 84,600 amount to 14 % for the employees and to 18 % or 19 % for the members of the management. The conversion rate for the mandatory part of the savings capital is 6.8 % at normal retirement age. For the exceeding part of the savings capital, the conversion rate is defined by the board of trustees.
The annual disability pension amounts to 70 % of the insured salary, the annual partner’s pension to 50 % of the insured salary or to 60 % of the current retirement pension. In case of death before retirement an additional lump-sum of 200 % of the insured salary is paid.
Governance of the plan The companies are affiliated to the collective foundation Swiss Life Collective BVG Foundation. The collective foundation is a separate legal entity. The foundation is responsible for the governance of the plan; the foundation’s board of trustees is composed of an equal number of representatives from the employers and employees chosen from all affiliated companies. The foundation has set up investment guidelines, defining in particular the strategic allocation with margins.
Additionally, there are pension committees for each affiliated company composed of an equal number of representatives from the company and the employees. The pension committee is responsible for the set-up of the plan benefits.
Risks to which the plan exposes the Group The plan provider Swiss Life Collective BVG Foundation has reinsured the risks disability, death, longevity and the investment risk with Swiss Life Ltd. Therefore, the only risks for the Group are that the Swiss Life Collective BVG Foundation terminates the affiliation contract or increases the premiums.
Plan amendments, settlements or curtailments In 2015, the board of trustees has decided to gradually reduce the conversion rate for calculating the annuity relating to the exceeding part of the savings capital, starting from January 1, 2017. This alteration is considered as a plan amendment. The resulting past service costs amounting to CHF 7.7 million were recognized immediately in profit or loss.
Acquisition through business combination in 2015 Sias AG and Xiril AG are affiliated to the collective foundation Nest Sammelstiftung. The benefits provided as well as the plan rules and the governance of the plans are highly comparable to the plans described above. |
Austria (International plans) | Long-service leave benefits | Unfunded | Nature of the benefits provided The severance-payments plan of Tecan Austria GmbH and Tecan Sales Austria GmbH guarantees a one-time lump sum payment, once the employee leaves the company. The plan was closed for new members at December 31, 2002. Plan participants are all employees with at least 3 years of service and an entry-date before January 1, 2003. The membership to this plan is mandatory.
Regulatory framework The plan provides benefits according to Austrian law (AngG 23 and 23a) which stipulates benefits in case of retirement, death (50 %), disability or termination of employment. Vesting is after 3 years of service, whereas all rights forfeit in the case of voluntary termination.
The level of the benefits depends on the period of service in the company and amounts to a lump-sum payment of 2 monthly salaries after 3 years of service up to 12 monthly salaries after 25 years of service. The monthly salary is defined as twelfth part of the total annual salary of the last 12 months.
Governance of the plan Only the company (employer) is responsible for the governance of the plan.
Risks to which the plan exposes the Group The plan is exposed to an inflation risk as well as to the risk of salary increases. There is no longevity risk because the payments are due at retirement the latest.
Plan amendments, settlements or curtailments There were no plan amendments, settlements or curtailments during the financial years 2014 and 2015. |
Other (International plans) | Retirement benefits | Unfunded | There are two minor retirement benefit plans in Tecan Japan Co., Ltd. and Tecan Italia S.r.l. for only a limited number of participants. |
10.3.2 Amounts recognized in the financial statements
The amounts recognized in the balance sheet are as follows:
| 2014 | 2015 |
CHF 1,000 |
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Swiss plans |
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Present value of obligations arising from retirement benefit plans | 92,497 | 106,054 |
Fair value of plan assets | (65,860) | (84,031) |
Deficit Swiss plans (funded) | 26,637 | 22,023 |
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International plans |
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Present value of obligations arising from long-service leave benefit plans | 3,851 | 3,480 |
Present value of obligations arising from retirement benefit plans | 902 | 959 |
Deficit International plans (unfunded) | 4,753 | 4,439 |
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Net liability at December 31 | 31,390 | 26,462 |
The components of defined benefit cost are as follows:
| 2014 | 2015 | ||||
CHF 1,000 | Swiss plans | International plans | Total | Swiss plans | International plans | Total |
Current service cost | 6,132 | 319 | 6,451 | 7,225 | 275 | 7,500 |
Past service cost | – | – | – | (7,684) | – | (7,684) |
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Defined benefit cost included in operating profit | 6,132 | 319 | 6,451 | (459) | 275 | (184) |
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Net interest cost on liability for post-employment benefits | 209 | 127 | 336 | 258 | 77 | 335 |
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Defined benefit cost included in finance cost | 209 | 127 | 336 | 258 | 77 | 335 |
Total defined benefit cost included in profit or loss | 6,341 | 446 | 6,787 | (201) | 352 | 151 |
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Actuarial (gains)/losses on obligations |
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Changes in demographic assumptions | – | (11) | (11) | (1,694) | – | (1,694) |
Changes in financial assumptions | 17,811 | 419 | 18,230 | (1,956) | 43 | (1,913) |
Experience adjustments | (5,655) | (160) | (5,815) | (739) | (70) | (809) |
Return on plan assets (excluding interest income) | 432 | – | 432 | 63 | – | 63 |
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Remeasurement loss/(gain), included in other comprehensive income | 12,588 | 248 | 12,836 | (4,326) | (27) | (4,353) |
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Translation differences, included in other comprehensive income | – | (89) | (89) | – | (329) | (329) |
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Total defined benefit cost recognized | 18,929 | 605 | 19,534 | (4,527) | (4) | (4,531) |
Changes in the present value of the defined benefit obligation are as follows:
| 2014 | 2015 | ||||
CHF 1,000 | Swiss plans | International plans | Total | Swiss plans | International plans | Total |
Balance at January 1 | 78,818 | 4,346 | 83,164 | 92,497 | 4,753 | 97,250 |
Acquisition through business combination | – | – | – | 16,278 | – | 16,278 |
Current service cost | 6,132 | 319 | 6,451 | 7,225 | 275 | 7,500 |
Past service cost | – | – | – | (7,684) | – | (7,684) |
Employee contributions | 3,163 | – | 3,163 | 3,190 | – | 3,190 |
Insurance premiums | (1,534) | – | (1,534) | (1,478) | – | (1,478) |
Benefits paid | (8,041) | (198) | (8,239) | (601) | (243) | (844) |
Interest expense | 1,803 | 127 | 1,930 | 1,016 | 77 | 1,093 |
Actuarial losses/(gains) | 12,156 | 248 | 12,404 | (4,389) | (27) | (4,416) |
Translation differences | – | (89) | (89) | – | (396) | (396) |
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Balance at December 31 | 92,497 | 4,753 | 97,250 | 106,054 | 4,439 | 110,493 |
Changes in the fair value of plan assets are as follows:
| 2014 | 2015 | ||||
CHF 1,000 | Swiss plans | International plans | Total | Swiss plans | International plans | Total |
Balance at January 1 | 66,391 | – | 66,391 | 65,860 | – | 65,860 |
Acquisition through business combination | – | – | – | 11,542 | – | 11,542 |
Employer contributions | 4,719 | – | 4,719 | 4,823 | – | 4,823 |
Employee contributions | 3,163 | – | 3,163 | 3,190 | – | 3,190 |
Insurance premiums | (1,534) | – | (1,534) | (1,478) | – | (1,478) |
Benefits paid | (8,041) | – | (8,041) | (601) | – | (601) |
Interest income | 1,594 | – | 1,594 | 758 | – | 758 |
Return on plan assets (excluding interest income) | (432) | – | (432) | (63) | – | (63) |
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Balance at December 31 | 65,860 | – | 65,860 | 84,031 | – | 84,031 |
The investment risk is reinsured. Therefore the plan assets represent a receivable from the life insurance company.
10.3.3 Actuarial assumptions and sensitivity analysis
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):
| 2014 | 2015 | ||
| Swiss plans | International plans | Swiss plans | International plans |
Discount rates | 1.10 % | 1.85 % | 0.90 % | 0.94 % |
Rate of future salary increases | 1.75 % | 2.84 % | 1.75 % | 1.79 % |
Rate of future pension increases | 0.25 % | 0.00 % | 0.00 % | 0.00 % |
Rates for the projection of savings capital | 1.75 % | n/a | 1.25 % | n/a |
Mortality tables | BVG2010GT | various | BVG2010GT | various |
Sensitivities of significant actuarial assumptions
The discount rate, the rate of future salary increase and the life expectancy were identified as significant actuarial assumptions. The following impacts on the defined benefit obligation are to be expected:
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| 2014 | 2015 | ||||
CHF 1,000 | Change in actuarial assumptions | Swiss plans | International plans | Total | Swiss plans | International plans | Total |
Discount rates | - 25 basis points | 5,108 | 132 | 5,240 | 4,495 | 107 | 4,602 |
| + 25 basis points | (4,667) | (124) | (4,791) | (4,077) | (105) | (4,182) |
Rate of future salary increases | - 25 basis points | (883) | (118) | (1,001) | (755) | (99) | (854) |
| + 25 basis points | 866 | 127 | 993 | 766 | 102 | 868 |
Life expectancy | - 1 year | (2,130) | (14) | (2,144) | (2,417) | (12) | (2,429) |
| + 1 year | 2,107 | 15 | 2,122 | 2,377 | 11 | 2,388 |
(positive = increase in obligation/negative = decrease in obligation)
The sensitivity analysis is based on realistically possible changes at the end of the reporting period. Each change in significant assumption was analyzed separately as part of the test. Interdependencies were not taken into account.
10.4 Employee participation plans – share-based payment (IFRS 2)
10.4.1 Employee share option plans
The terms and conditions of the outstanding grants are as follows, whereby all options are settled by physical delivery of shares:
Arrangement | Employees entitled/ | Number of options | Vesting conditions | Contractual life | Expiry date |
Plan 2010 Equity-settled | Options granted to members of | 63,492 options CHF 70.00 | Vesting period completed | 7 years | November 23, 2016 |
Plan 2011 Equity-settled | Options granted to members of Board of Directors and management level 3 and 4 on November 2, 2010 | 52,950 options CHF 69.00 | Vesting period completed | 7 years | November 2, 2017 |
Plan 2012 Equity-settled | Options granted to members of management level 3 and 4 on | 59,998 options CHF 57.20 | Vesting period completed | 7 years | November 2, 2018 |
Plan 2013 Equity-settled | Options granted to members of management level 3 and 4 on November 2, 2012 | 40,953 options CHF 69.60 | Vesting period completed | 7 years | November 2, 2019 |
Plan 2014 Equity-settled | Options granted to members of management level 3 and 4 on November 2, 2013 | 35,112 options CHF 95.00 | One/two/three years of | 7 years | November 2, 2020 |
Plan 2015 Equity-settled | Options granted to members of management level 3 and 4 on November 2, 2014 | 34,260 options CHF 100.40 | One/two/three years of | 7 years | November 2, 2021 |
Plan 2016 Equity-settled | Options granted to members of management level 3 and 4 on November 2, 2015 | 23,569 options CHF 135.00 | One/two/three years of | 7 years | November 2, 2022 |
All share options grant the right to purchase one Tecan share per option.
Outstanding share options at the end of the period in detail:
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| 2014 | 2015 | ||
| Exercise price | Remaining | Number | Remaining | Number |
Plan 2009 B | 39.7 | 0.9 | 7,282 | – | – |
Plan 2010 | 70.0 | 1.9 | 8,207 | 0.9 | 5,718 |
Plan 2011 | 69.0 | 2.8 | 10,501 | 1.8 | 7,947 |
Plan 2012 | 57.2 | 3.8 | 14,198 | 2.8 | 8,249 |
Plan 2013 | 69.6 | 4.8 | 20,240 | 3.8 | 13,944 |
Plan 2014 | 95.0 | 5.8 | 29,691 | 4.8 | 25,404 |
Plan 2015 | 100.4 | 6.8 | 34,260 | 5.8 | 32,336 |
Plan 2016 | 135.0 | – | – | 6.8 | 23,569 |
Balance at December 31 |
| 4.9 | 124,379 | 4.8 | 117,167 |
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Exercisable at December 31 |
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| 58,114 |
| 60,624 |
All outstanding options are fully covered by the conditional share capital.
The number and weighted average exercise prices of share options are as follows:
| 2014 | 2015 | ||
| Weighted average exercise price (CHF) | Number | Weighted average exercise price (CHF) | Number |
Balance at January 1 | 70.41 | 148,704 | 80.96 | 124,379 |
Granted | 100.10 | 34,260 | 135.00 | 23,569 |
Exercised | 64.38 | (46,297) | 65.24 | (28,743) |
Forfeited | 70.91 | (8,258) | 80.89 | (1,508) |
Expired | 68.27 | (4,030) | 40.29 | (530) |
Balance at December 31 | 80.96 | 124,379 | 95.87 | 117,167 |
The weighted average share price at the date of exercise was CHF 104.85 in 2014 and CHF 133.95 in 2015.
The expenses, recognized in profit or loss, are calculated as follows:
The fair value of services received in return for the share options granted is measured by reference to the share options vested multiplied by their fair value at grant date (measurement date). The estimate of the fair value is based on a binominal model. Changes in the fair value of the option after the grant date do not change the fair value of the services received.
Fair value of share options and key assumptions (not yet vested share option plans):
Grant | Share price | Exercise price | Expected volatility1 | Option life | Expected dividends | Risk-free interest rate | Fair value |
Plan 2013 | CHF 69.60 | CHF 69.60 | 31.79 % | 7.0 years | 1.91 % | 0.57 % | CHF 19.13 |
Plan 2014 | CHF 95.00 | CHF 95.00 | 22.75 % | 7.0 years | 1.61 % | 1.03 % | CHF 19.72 |
Plan 2015 | CHF 100.40 | CHF 100.40 | 22.54 % | 7.0 years | 2.42 % | 0.45 % | CHF 18.54 |
Plan 2016 | CHF 135.00 | CHF 135.00 | 26.41 % | 7.0 years | 2.10 % | (0.20 %) | CHF 29.24 |
- Historic volatility with an underlying period that depends on the option life
Data source: Bloomberg
10.4.2 Employee share plans
10.4.2.1 Performance share matching plans (PSMP)
The terms and conditions of the outstanding grants are as follows, whereby all shares are delivered physically and free of charge (except for mandatory investment):
Arrangement | Employees entitled/grant date | Number of shares granted | Fair value at grant | Vesting period | Vesting conditions |
Performance share matching plan (PSMP) 2013 | |||||
Initial grant | Extended Management Board on April 18, 2013 | 18,326 shares | CHF 83.50 | Graded vesting from January 1, 2013 to December 31, 20151 | Three years of service |
Other management on September 1, 2013 | 2,616 shares | CHF 95.25 | |||
Matching shares | Extended Management Board on April 18, 2013 | 52,108 shares (maximum of potential shares granted) | CHF 80.50 | January 1, 2013 to December 31, 2015 | Three years of service and performance target |
Other management on September 1, 2013 | 6,540 shares (maximum of potential shares granted) | CHF 92.25 | |||
Performance share matching plan (PSMP) 2014 | |||||
Initial grant | Extended Management Board and other management on April 15, 2014 | 22,838 shares | CHF 103.50 | Graded vesting from January 1, 2014 to December 31, 20161 | Three years of service |
Matching shares | Extended Management Board and other management on April 15, 2014 | 66,481 shares (maximum of potential shares granted) | CHF 99.00 | January 1, 2014 to December 31, 2016 | Three years of service and performance target |
Performance share matching plan (PSMP) 2015 | |||||
Initial grant | Extended Management Board and other management on April 16, 2015 | 20,727 shares | CHF 130.70 | Graded vesting from January 1, 2015 to December 31, 20171 | Three years of service |
Mandatory investment Up to 50 % of the target cash bonus 2014 | Extended Management Board on April 16, 2015 | 4,847 shares | CHF 130.70 | Immediate vesting1 | None |
Matching shares | Extended Management Board and other management on April 16, 2015 | 63,935 shares (maximum of potential shares granted) | CHF 126.20 | January 1, 2015 to December 31, 2017 | Three years of service and performance target |
- Vested shares are blocked until the end of the performance period.
In addition to the grants listed above, the Management Board was entitled to invest voluntarily a limited amount of its cash bonus 2012 and 2013 in Tecan shares at market prices (average share price from January 1 to April 30, 2013 and 2014). The shares are blocked until the end of the performance period and are included in the calculation of the matching shares for PSMP 2013 and 2014.
Number of shares outstanding at December 31:
Shares (excluding voluntary investments) | 2014 | 2015 |
Balance at January 1 | 217,452 | 229,432 |
Granted | 89,319 | 89,509 |
De-blocked and transferred to employee | (30,842) | (23,854) |
Forfeited | (46,497) | (62,855) |
Balance at December 31 | 229,432 | 232,232 |
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Thereof vested, but blocked until the end of the performance period | 25,727 | 27,408 |
The expenses, recognized in profit or loss, are calculated as follows:
The fair value of services received in return for the shares granted is measured by reference to the shares vested multiplied by their fair value at grant date (measurement date). The fair value at grant represents the market value of one Tecan share adjusted for expected dividend payments during the vesting period. Changes in the fair value of the shares after the grant date do not change the fair value of the services received.
The number of matching shares is determined based on the following formula: number of shares from initial grant plus number of shares from mandatory and voluntary investments (if applicable) times the matching share factor. The matching share factor is dependent on the achievement of specific economic profit targets. In any case, the matching share factor will not be lower than 0.0 and not higher than 2.5.
Number of matching shares expected to vest at December 31, 2015:
Year/plan | Initial grant1 | Mandatory investment1 | Voluntary Investment1 | Total base shares | Matching share factor applied | Matching shares expected to vest2 |
PSMP 2013 | 19,763 | n/a | 2,517 | 22,280 | 1.15 | 25,622 |
PSMP 2014 | 21,920 | n/a | 3,754 | 25,674 | 2.00 | 51,348 |
PSMP 2015 | 20,727 | 4,847 | n/a | 25,574 | 2.50 | 63,935 |
1 Only shares that qualify for matching shares
2 Not adjusted for expected fluctuation
10.4.2.2 Other share plans
The terms and conditions of the outstanding grants are as follows, whereby all shares are delivered physically and free of charge:
Arrangement | Employees entitled/grant date | Number of shares granted | Fair value at grant | Vesting period | Vesting conditions |
Share plan 2015 – Board of Directors (BoD) | |||||
Annual grant | Board of Directors on April 16, 2015 | 2,902 shares | CHF 130.70 | Graded vesting from May 1, 2015 to April 30, 2016 | One year of service |
10.4.3 Total expenses recognized
| 2014 | 2015 |
CHF 1,000 |
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Expenses arising from equity-settled share option plans | 585 | 592 |
Expenses arising from performance share matching plans | 4,347 | 6,547 |
Expenses arising from other share plans | 356 | 376 |
Total expenses recognized | 5,288 | 7,515 |
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