Letter from the Chairman of the Nomination and Remuneration Committee
Dear Sir or Madam,
As the new Chairman of the Nomination and Remuneration Committee of the Board of Directors, I am pleased to present to you the remuneration report for 2018. We redesigned the report's structure and presentation this year to be clearer, more reader-friendly and thus more transparent. The report now provides more in-depth explanations on remuneration governance and much more detailed information on the remuneration for the Board of Directors and the Executive Board. We made this change in order to meet our cooperative banks' need for more information and to live up to our responsibility as a systemically important bank. Our new disclosure policy also aligns our report with the market practices of publicly traded companies. Furthermore, the Board of Directors will move to hold a consultative vote on the 2018 remuneration report at the 2019 Delegate Meeting.
The Board of Directors initiated a comprehensive review of the entire remuneration system in 2018. It decided to voluntarily reduce its 2018 remuneration, effective as of 17 June 2018, to a level corresponding to the remuneration regulations in force until the end of 2016.
Based on a motion filed by several regional unions at the Ordinary Delegate Meeting on 16 June 2018 regarding the remuneration of the Board of Directors and the Executive Board, the Board of Directors moved at the Delegate Meeting to institute a working group to prepare a new remuneration system for the Board of Directors starting on 1 January 2019, including processes, disclosure (remuneration report) and amounts. The Board of Directors will carefully review the remaining remuneration models of Raiffeisen Switzerland as part of a regular process.
The main objectives of the new remuneration system for the Board of Directors are to simplify the system and ensure remuneration according to market rates in the context of a cooperative union. The new remuneration system therefore stipulates lump sums for basic and committee remuneration depending on the Board of Directors' member's role and eliminates the old meeting attendance fees and meeting expenses. The new remuneration system is to be reviewed every two years (instead of every four) and aims to increase delegate involvement and transparency with respect to disclosure. The remuneration system took effect on 1 January 2019, with 2018 serving as a transitional year from the old to the new system, which involved numerous personnel changes on the Board of Directors. Remuneration for the entire Board of Directors in 2018 was largely driven by a high frequency of meetings and attendance times due to the need to find five new BoD members and a new CEO, maintain a very strong presence and communicate with the Raiffeisen banks.
The Board of Directors is convinced that these changes will not only increase transparency but that communication with representatives of the Raiffeisen banks will encourage open, candid dialogue about remuneration issues. The Delegate Meeting's consultative vote on the 2018 remuneration report is a great opportunity to share opinions and views on remuneration in 2019.
On behalf of the Nomination and Remuneration Committee, I would like to thank everyone in the committees and working groups who played a part in handling such a large volume of work in 2018. I look forward to working with you in the future.
Chairman of the Nomination and Remuneration Committee of the Board of Directors