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2 Decision-making powers

2.1 Division of tasks between the Annual General Meeting, the Board of Directors and the Compensation Committee

The Annual General Meeting approves the maximum total remuneration amounts payable to the Board of Directors and the Group Executive Boards for the following financial year upon the motion proposed by the Board of Directors. Details of the relevant regulation and the consequences of a negative decision by the Annual General Meeting are set out in the Articles of Incorporation (Articles 5.7.7 and 5.7.8). The Articles of Incorporation also define the requirements for and the maximum level of the additional amount that can be paid to a member of the Group Executive Board who is newly appointed during a period for which the Annual General Meeting has already approved the remuneration.

The Board of Directors approves, inter alia, the personnel and remuneration policy for the entire Group, as well as the general terms and conditions of employment for members of the Group Executive Board. It sets the remuneration of the Board of Directors and decides on the remuneration of the CEO as well as the total remuneration for the Group Executive Board. From the 2016 financial year, the Board of Directors will have to comply with the maximum amounts approved by the Annual General Meeting for the remuneration to be paid to the Board of Directors and the Group Executive Board for the financial year in question.

The Compensation Committee handles all business matters of the Board of Directors concerning remuneration, submits proposals to the Board of Directors in this context, and, within the framework of the approved total remuneration, is empowered to decide upon the remuneration of the individual Group Executive Board members (with the exception of the CEO). Neither the CEO nor the other members of the Group Executive Board are entitled to participate in meetings at which their remuneration is discussed or decided. The conduct of the members of the Board of Directors with respect to conflicts of interest is defined in section 2.6 of the Organisational Rules.

The decision-making powers are governed by the Articles of Incorporation, the Organisational Rules and the Regulations of the Compensation Committee. The Articles of Incorporation and the relevant rules and regulations can be accessed on the Swisscom website under “Basic principles”.

See www.swisscom.ch/​basicprinciples

The table below shows the division of responsibilities between the Annual General Meeting, the Board of Directors and the Compensation Committee.


Subject
  Remuneration
Committee
  Board
of Directors
  Annual
General Meeting
Maximum total amounts for remuneration of the Board of Directors and Group Executive Board   V 1   A 2   G 3
Additional amount for remuneration of newly appointed members of the Group Executive Board   V   A   G
Principles for performance-related and participation schemes   V   A   G
Personnel and remuneration policy   V   G 4  
Principles for benefit plans and social security services   V   G  
Concept of remuneration to members of the Board of Directors   V   G 4  
Equity success and participation plans of the Group   V   G 4  
General terms and conditions of the Group Executive Board   V   G 4  
Determination of the targets for the variable performance-related salary component   V   G 4  
Remuneration of the Board of Directors   V   G 5  
Remuneration of the CEO Swisscom Ltd   V   G 5  
Total remuneration of the Group Executive Board   V   G 5  
Remuneration of the members of the Group Executive Board (excl. CEO)   G 5, 6    
1 V stands for preparation and proposal to the Board of Directors.
2 A stands for proposal to the Annual General Meeting.
3 G stands for approval.
4 In the framework of the Articles of Incorporation.
5 In the framework of the maximum total remuneration defined by the Annual General Meeting.
6 In the framework of the total remuneration defined by the Board of Directors.

2.2 Election, composition and modus operandi of the Compensation Committee

The Compensation Committee consists of three to six members. They are elected individually each year by the Annual General Meeting. If the number of members falls below three, the Board of Directors appoints the missing member(s) from its midst until the conclusion of the next Annual General Meeting. The Board of Directors appoints the Chairman of the Compensation Committee, which constitutes itself. If the Annual General Meeting elects the Chairman of the Board of Directors to the Compensation Committee, he has no voting rights. He does not participate in meetings in which discussions take place or decisions are made with regard to his own remuneration. The CEO, CPO, Head of Strategy & Board Services and Head of Compensation & Benefits attend the meetings in an advisory capacity, unless agenda items exclusively concern the Board of Directors or the CEO and CPO themselves, in which case the CEO and CPO are not present. Other members of the Board of Directors, auditors or experts may also be called upon to attend the meetings in an advisory capacity. Minutes are kept of the meetings. The meetings of the Compensation Committee are generally held in February, June and December. Further meetings can be convened if required. The Chairman reports orally on the activities of the Compensation Committee at the next meeting of the Board of Directors.

The details are governed by the Articles of Incorporation (Article 6.5), the Organisational Rules of the Board of Directors and the Regulations of the Compensation Committee. The Articles of Incorporation and the relevant rules and regulations can be accessed on the Swisscom website under “Basic principles”.

See www.swisscom.ch/​basicprinciples

The members of the Compensation Committee neither work nor have worked for Swisscom in an executive capacity, nor do they maintain any significant commercial links with Swisscom Ltd or the Swisscom Group. Customer and supplier relationships exist between the Swiss Confederation and Swisscom. Details of these are given in Note 37 to the consolidated financial statements.

See report Page 208

The following table gives an overview of the composition of the Committee, the Committee meetings, conference calls and circular resolutions held or taken in 2015.

    Meetings   Conference calls   Circular resolutions
Total   3    
Average duration (in hours)   1:15    
Participation:            
Barbara Frei, Chairwoman   3    
Torsten Kreindl   3    
Theophil Schlatter   3    
Hans Werder 1   3    
Hansueli Loosli 2   3    
1 Representative of the Confederation.
2 Participation without voting rights.