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5 Content and Method of Determining Compensation and Stock Option Plans

Pursuant to the Articles of Incorporation, each year the ­Compensation Report for the completed business year is submitted to the Annual General Meeting for a non-binding consultative vote. The process for the prospective approval of the compensation of the Board of Directors and of the Management Board is described in the ­Compensation Report herein. 

 

Pursuant to the Articles of Incorporation, any loans, credits or securi­ties granted to a member of the Board of Directors or the Management Board may not exceed an amount corresponding to 50% of such member’s base salary. No such loans, credits or securities were outstanding at the end of 2017. 

 

The Articles of Incorporation are available for consultation at www.tecan.com/tecan-corporate-policies. The provisions of the Articles of Incorporation regarding the compensation policy (article 18, sections 3, 4, 6 and 7) read as follows:

 

For work performed in the interest of the Company, the members of the Board of Directors shall receive, in addition to reimbursements of costs and expenses, a compensation, the maximum amount of which must be approved by the Annual General Meeting. The compensation of the members of the Board of Directors may consist of an annual compensation and further non-performance-related compensation (such as remunerations for the membership in committees or the performance of special tasks or assignments) plus the employer’s social security contributions and contributions to pension plans. The compensation may be paid in cash and partly in shares in the Company.

For work performed in the interest of the Company, the members of the Management Board shall receive, in addition to reim­bursements of costs and expenses, a compensation, the maximum amount of which must be approved by the Annual General Meeting. The compensation of the members of the Management Board may consist of (a) an annual base salary and further non-performance-related compensation plus the employer’s ­social security contributions and contributions to ­pension­ plans, (b) performance-related cash compensation, and (c) compensation under the long-term participation plan, each plus the employer’s social security contributions and contributions to pension plans, if applicable.

The variable cash compensation shall be determined on the basis of financial targets of the Company’s group and (quantitative and qualitative) personal targets (hereinafter referred to as “performance-related cash compensation”). The targets shall be defined by the Board of Directors at the beginning of each year upon motion of the Compensation Committee. The performance-related cash compensation of the CEO may not exceed 150% of the base salary and the performance-related cash compensation of the other members of the Management Board may not exceed 100% of the base salary. The performance-related cash compensation is generally paid out in cash but may also be paid in the form of shares or other types of benefits.

Within the scope of the long-term participation plan, the compensation of the members of the Management Board shall be determined on the basis of the Company’s strategic and/or financial targets, which shall be measured over a period of at least three years. The targets shall be defined by the Board of Directors upon motion of the Compensation Committee. In addition, the members of the Management Board may be allowed to participate in the long-term participation plan on a voluntary basis. The compensation may be paid in the form of shares, entitlements to additional shares (matching shares), options, cash or other types of benefit as determined by the Board of Directors upon motion of the Compensation Committee. The Board of Directors upon motion of the Compensation Committee shall determine the conditions that apply to grants, vesting and blocking periods as well as the circumstances triggering accelerated vesting or de-blocking or forfeiture of any grants (e.g. in the event of death, invalidity, change of control, termination of employment contract). The Board of Directors upon motion of the Compensation Committee shall determine the maximum amount of compensation under the long-term participation plan in the compensation and participation plans or regulations.

 

The provisions of the Articles of Incorporation on pensions reads as follows (article 20): The Company may establish one or more independent pension funds for occupational pension plans or may join existing pension funds. Contributions by the employer to such pension funds, as opposed to the regulated benefits paid by such pension funds, are a component of the compensation. Pension benefits directly accrued or paid by the employer due to country-specific regulations for occupational benefits shall be treated the same way as contributions to and benefits by pension funds. Under special circumstances, the Company may make payments for social security purposes outside the statutory social security system, including payments by the Company to the pension fund to finance a transitional pension in the event of early retirement. The value of such payments per member of the Management Board may not exceed the total amount of the last annual compensation paid to this very member. The value of the pension is determined in accordance with generally recognized actuarial rules.

 

For information with regard to the actual compensation schemes and participation plans and further information on the actual compensation 2017 as well as on the motions proposed to the Annual General Meeting on the prospective approval of the compensation of the Board of Directors and of the Management Board, please refer to the Compensation Report.

 

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