Compensation in 2019

For the 2019 business year, the members of the Board of Directors received a fixed compensation of CHF thousands 914. Contributions to benefit plans and other social contributions amounted to CHF thousands 111. The fixed compensation was paid in cash (CHF thousands 751) as well as in the form of an entitlement to acquire LLB shares (CHF thousands 163). 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 increased by CHF thousands 23 or 2.3 per cent. The higher compensation expense in 2019 was attributable mainly to the fact that from the General Meeting 2019 the Board of Directors was composed of one member more (seven members instead of the former six).

For the 2019 business year, the members of the Group Executive Board received a fixed compensation of CHF thousands 3'384 and a variable compensation of CHF thousands 1'614. Contributions to benefit plans and other social contributions amounted to CHF thousands 1'135. 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 2019 (CHF 63.53). The variable compensation for the members of the Group Executive Board was, on average, approximately 47.7 per cent of the fixed compensation or 26.3 per cent of total compensation.

The total compensation of the members of the Group Executive Board in 2019 decreased by CHF thousands 860 or 12.3 per cent. This decrease was primarily the result of the lower variable compensation. The MAPI was minus 2.5 per cent (previous year: plus 31.9 %). This results from the total shareholder return of LLB (1.6 %) in comparison with the total shareholder return of the peer group (4.1 %) which corresponds to an attainment of objectives of 93.7 per cent (previous year: 179.7 %).

The total compensation of the members of the Board of Directors and the members of the Group Executive Board for the 2019 business year is reported on an accrual basis. The variable compensation was charged to the 2019 income statement. Payment of the STI to the members of the Group Executive Board will be made in the first quarter of 2020. 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.

No member of the Board of Directors or the Board of Management owns more than 0.1 per cent of the voting rights.

At 31 December 2019, the maturities of the fixed mortgages for the members of the Board of Directors and related parties ranged between 15 and 63 months (previous year: between 3 and 51 months) at standard market client interest rates of 0.95 to 1.65 per cent per annum (previous year: 0.95 to 1.65 %). One variable mortgage with standard market conditions was issued. The remaining term is 1 month with an interest rate of 0.95 per cent (previous year: no mortgage with variable interest rates was issued).

At 31 December 2019, the maturities of the fixed mortgages for the members of the Board of Management ranged between 0 and 73 months (previous year: between 1 and 78 months) at interest rates of 0.6 to 1.80 per cent per annum (previous year: 0.4 to 1.88 %).

In 2019, two expiring loans were extended at new terms and conditions. One new loan was granted; the fair value of cover amounted to CHF thousands 1'005.

Of the total amount for mortgages for the members of the Board of Management, CHF thousands 1'000 (previous year: CHF thousands 1'000) was granted at the preferential interest rate for staff, the remainder was subject to the standard market client interest rate. Other loans to the Board of Management amounted to CHF thousands 0 (previous year: CHF thousands 200).

No allowances for loans and other credits to management were necessary. LLB issued guarantees to third parties on behalf of management or related parties totalling CHF thousands 168 (previous year: CHF thousands 168).