The basic features of the remuneration policy are elaborated by the Compensation Committee (COC) and approved by the Board of Directors, which also approves the executive bonus plan and the long-term incentive plan (LTI). The Board of Directors fixes annually the remuneration of the Directors and of the members of the Group Executive Board, based on suggestions of the COC and within the ­limits approved by the shareholders. The Directors, whose remuneration is decided on, also participate in the meeting. The Board of Directors reviews annually the main features of the remuneration policy, approves the fixed portion of the remuneration of the Group Executive Board members and defines the targets for the executive bonus plan as well as the parameters for the LTI. The Board of Directors has not engaged third-party consultants for the elaboration of the salary policy or the ­compensation programs. The Board of Directors annually submits the proposal for the maximum ­aggregate total compensation of the members of the Board of ­Directors and the Group Executive Board to the Annual General Meeting for prospective approval by the shareholders. For a detailed description of the rules on the vote on pay at the Annual ­General Meeting, reference is made to §14 of the Articles of Association¹.

For the rules in the Articles of Association¹ on the principles applicable to performance-related pay and to the allocation of equity securities as well as the additional amount for payments to new members of the Group Executive Board appointed after the vote on pay at the Annual General Meet­ing as well as on loans, credit facilities and post-employment benefits for members of the Board of ­Directors and the Group Executive Board, reference is made to §24 and §25 of the Articles of Association¹.

The remuneration of the Board of Directors consists of an annual fee. The remuneration is determined at the discretion of the Board of Directors, taking into consideration the remuneration at companies with comparable size, industry and ­globalization. In addition, the members of the Board of Directors receive an annual lump-sum payment for representation expenses.

The members of the Board of Directors may opt to obtain all or part of their remuneration in cash or in Autoneum shares. The cash component is paid out in December of the related business year. The shares are delivered in the respective year and blocked for three years. The share price applicable for the conversion of the remuneration into shares is based on the average trading price of the ten trading days following the dividend payment, discounted to reflect a three-year blocking period.

Remuneration of the Group Executive Board

Remuneration of the Group Executive Board consists of a fixed component, a performance-related bonus and the participation in the long-term incentive plan (LTI). Remuneration is determined at the discretion of the Board of Directors, taking into consideration function, responsibility and experience, as well as remuneration at comparable industrial companies for which information is publicly ­avail­able or known to the Directors from their experience or office at similar companies. Industrial companies are considered comparable with Autoneum if they are similar in terms of business ­sector, structure, size and international activity.

The Board of Directors may define an additional portion of the basic salary which shall be paid in Autoneum shares. The number of shares is calculated considering the average trading price of the first ten trading days of the respective year. The granted shares are delivered in December of the respective year and blocked for three years.

The members of the Group Executive Board may reach a performance-related remuneration of up to 80% of their basic salary, subject to the achievement or exceeding of defined minimum ­profitability and liquidity targets of the Group or of the Business Groups (BG), as well as to the achievement of agreed individual targets. The targets for the CEO and the CFO refer to the Group net profit margin (weighted with 52.5%), Group RONA (22.5%) and individual targets (25%). For the Heads of the BG the targets refer to the Group net profit ­margin (17.5%), Group RONA (7.5%), BG EBIT margin (35%), BG free cash flow (15%)² and individual targets (25%). Minimum and ­maximum limits are defined for the weighted targets. Achievement of the minimum limit is a condition for the bonus, while maximum bonus is achieved at the maximum limit. Bonus develops linearly between the two limits. Irrespective of the other targets, a bonus is only earned in case of a positive Group net profit. At least 40% of the bonus is paid in shares of Autoneum. Each member of the Group Execu­tive Board can opt for receiving up to 100% of the bonus in shares and for receiving either restricted shares with a blocking period of three years or an entitlement to shares with a deferred transfer after a period of three years. The calculated bonus is multiplied by 1.4 and then converted into shares considering the average trading price of the first ten ­trading days in January of the following year.

The long-term incentive plan (LTI) allows the Board of Directors to allocate part of the Group’s net profit to the beneficiaries defined in advance. Beneficiaries are the upper management of the Group, including the Group Executive Board. An allocation is only granted if Group net profit is positive and exceeds a defined threshold. The total amount of Group net profit dedicated to the LTI is converted into Autoneum shares and the shares are allocated to the beneficiaries at fixed ­per­centage rates, ­corresponding to the internal function levels. The shares become property of the ­beneficiaries after a vesting period of 35 months, if the beneficiaries are then still employed by an Autoneum company. Due to the 35-month vesting period, the value of the LTI is in strong correlation to the ­Autoneum share price performance. Immediate vesting occurs in case of death or ­retirement of a beneficiary. In case of employment ­termination, shares not yet vested lapse without compensation. Exceptions are possible at the discretion of the COC. For the year 2018, 1% of Group net profit has been allocated (2017: 1%).

There are no share options or share purchase plans.

At the Annual General Meeting 2017 a total remuneration to the Board of Directors of CHF 1 550 000 and a total remuneration to the Group Executive Board of CHF 7 300 000 was ­approved for the financial year 2018. The total remuneration to the Board of Directors and to the Group Executive Board for 2018 is within the approved limit.

There has been no remuneration to former members of the Board of Directors or of the Group Executive Board.

The Board of Directors decides on directorships of members of the Group Executive Board or ­senior management at other companies. When the directorship is exercised outside the contractual working time, the director’s remuneration received must not be surrendered to Autoneum.

No loans have been granted to members of the Board of Directors or the Group Executive Board.

There have been no further payments or remuneration to members of the Board of Directors or Group Executive Board in 2018 or in 2017. In 2018, CHF 44 427 (2017: CHF 44 040) of fees were paid to the law firm managed by the Chairman of the Board of Directors, for legal services provided.