Annual Report 2018

Message from the Chairman of the Compensation and Nomination Committee to the Shareholders

Dear Shareholders


On behalf of the Board of Directors and the Compensation and Nomination Committee (CNC), I am pleased to introduce the 2018 Compensation Report of Cembra Money Bank AG (hereafter referred as “the Bank”, together with its subsidiaries, “the Group”). 

In 2018 the Group achieved a record result for the year with all products contributing to the profitable growth. With a net income of CHF 154.1 million and a corresponding return on equity (ROE) of 16.9%, we delivered the best full-year result in the history of our company. Net financing receivables increased by 5% to CHF 4,807 million. At the same time the Group’s performance was not reflected in the share price performance with a total shareholder return of –11% in the reporting period, following a 28% total shareholder return in 2017.

These achievements are reflected in the compensation decisions for 2018. As a result of the strong financial performance, the total compensation for the Group’s Management Board was TCHF 4,544 for 2018, as compared to the budget of TCHF 5,700 comprising the fixed compensation approved by the Annual General Meeting 2017 and the variable compensation approved by the Annual General Meeting 2018. The total compensation in the previous year was TCHF 4,035 compared to an approved total compensation of TCHF 5,300. The total compensation for 2018 was higher than for the previous year because of the two additional Management Board members who joined in 2018 in connection with the implementation of the new Management Board structure. 

To ensure the compensation system fulfils its purpose of supporting the achievement of our long-term business objectives and to ensure alignment of executive compensation with the interests of our shareholders, we:

  • Regularly review our compensation policy;
  • Maintain a compensation system that is premised on pay for performance;
  • Clearly define the expected performance through a robust performance management process; and
  • Pay market competitive compensation levels for comparable roles and experience.

Our Executive Variable Compensation Plan consists of a short-term incentive and a separate long-term incentive programme:

  • For the short-term variable compensation, the performance is predominantly tied to financial results (70% to 80% weight) and the assessment of qualitative results (20% to 30% weight).
  • Awards under the long-term incentive plan are granted in form of performance share units subject to a three-year performance-based cliff-vesting period. The performance conditions include relative total shareholder return and fully diluted earnings per share. This programme directly links the interests of the executives to those of the shareholders.

For the further development of our compensation strategy, we consider the opinion of our stakeholders as relevant and highly valuable. Therefore we engage in a regular dialogue with our investors and proxy advisors. You will have the opportunity to express your opinion on the compensation programmes through a non-binding, consultative shareholders’ vote on this Compensation Report at the Annual General Meeting in April 2019. Furthermore, we will ask you to vote on the maximum aggregate compensation amount for the Board of Directors for the Annual General Meeting 2019 to Annual General Meeting 2020 term of office and on the maximum aggregate compensation for the Management Board to be paid out in the financial year 2020.

Looking ahead, we will continue to assess and review our compensation programmes to ensure that they are still fulfilling their purpose in the evolving context in which the Group operates and that they are aligned to the interests of our shareholders. We would like to thank you for taking the time to share your views with us during the entire year and trust that you find this report informative. 

Urs Baumann

Chairman of the Compensation and Nomination Committee