5 Compensation of the Executive Committee

The following tables in Sections 5.1 and 5.3 show the compensation of the members of the Executive Committee in the reporting year and in the previous year, including the highest individual compensation.

5.1 Compensation of the Executive Committee for the 2023 financial year

5.2 Disclosure of performance in the reporting year

5.2.1 Performance relating to short-term variable compensation   

On Bystronic group level, the payout factors (referring to the proportionate variable compensation) per target are as follows:

At the regional and functional levels (Service and Solutions), the payout factors fall between 16% and 102% for the total of the financial performance parameters.

The payout factors for the financial targets amount to less than 100% because the sales figures achieved are below the respective budgets. This in turn also influenced the target values for EBIT and operating free cash flow. The sales trend can be attributed the following circumstances:

• Continuous strengthening of the Swiss franc, particularly against the US dollar
• Generally cautious investment activity among customers
• A weak economic situation in Asia and particularly in China

With respect to the group-wide ESG targets, which are weighted with 10%, the payout factor comes to 125%. Among other achievements, the successful reduction of CO₂ emissions (scope 1 and 2) and improvements in the area of diversity, equality & inclusion (DEI) were rewarded. For the individual qualitative targets, which are weighted with another 10%, the payout factors fall between 88% and 114%.

The average payout factor for all active members of the Executive Committee is 23% below the target value (previous year: 51% below the target value). The short-term variable compensation for the members of the Executive Committee thus amounts to between 27% and 49% of the fixed base salary in 2023 (previous year: between 16% and 28%), or between 60% and 89% of the contractually agreed variable target compensation (previous year: between 39% and 68%).

5.2.2 Performance relating to long-term share-based compensation

Due to the adjustment of the plan design in the reporting year, there are no relevant KPIs for long-term share-based compensation for the 2023 financial year. The EPS and rTSR factors achieved will be reported after the end of the vesting period.

5.3 Compensation of the Executive Committee for the 2022 financial year

5.4 Development of compensation paid to the Executive Committee

The total compensation for the active Executive Committee increased by CHF 983,300 in this reporting year compared to the previous year. The increase is attributed to the following reasons:

1.  Number of members in the Executive Committee

The Executive Committee included one additional member in the second half of 2023 due to the temporary double staffing for the position of President Americas.

2. Higher value for long-term share-based compensation

The shared-based compensation increased by CHF 366,700 compared to the previous year. This is due to higher target LTI values as well as that there was no shared-based compensation for the CEO in the previous year.

The Performance Share Unit (PSU) Plan introduced in the reporting year contains greater risks of loss for Executive Committee members compared to the previous Restricted Share Unit (RSU) Plan. While plan participants in the previous RSU Plan were always granted 100% of the target LTI value in the form of RSUs when the EPS target value was not attained, and the only condition for vesting was remaining in the company, under the new PSU Plan, in addition to departure from the company, the failure to meet minimum target values can lead to a total loss of vested PSUs or shares. Furthermore, 60% of the allocated shares will now be restricted for two years starting from the day of vesting. In recompense for the heightened risk to plan participants (excluding the CEO) and to further adjust the compensation mix in favor of variable compensation, the target LTI values were increased on January 1, 2023. Increasing target LTI values, while maintaining base salaries, resulted in the following change in the compensation mix for Executive Committee members (excluding the CEO).

The introduction of the new LTI Plan changed reporting. The figure shown for the reporting year now corresponds to the target LTI value or the fair value of the allocated PSUs, irrespective of the three-year vesting period during which the number of vested PSUs will be determined, based on the measurement of performance. In contrast, up until 2022, the values were reported for transferred, directly vested shares for the CEO. For the other members of the Executive Committee, the values were reported for PSUs, for which the only condition posed for vesting was remaining in the company. The increase in target LTI values versus the previous year is not fully reflected, because members of the Executive Committee received RSUs worth 120% of the target LTI value in 2021.

While the CEO was not entitled to any allocation of restricted shares in the previous year due to the EPS (earnings per share) attained, the fair value of the allocated, forfeitable PSUs is being transferred to him for the reporting year, with a value of CHF 242,000.

3. Higher values for short-term variable compensation

The short-term variable compensation increased in the reporting period compared to the previous year by CHF 511,500. The increase is due to a 8% higher variable target compensation and due to a higher average payout factor of 77% for the target compensation. Furthermore, the reported amount includes two one-time payments.

5.5 Compliance of compensation to the Executive Committee

For the 2023 financial year, the active and former members of the Executive Committee received total compensation and benefits amounting to CHF 5.3 million (previous year: CHF 4.7 million). This complied with the maximum total compensation for the Executive Committee of CHF 7.0 million approved at the Annual General Meeting in April 2022.

The compensation paid out is in accordance with Swiss law and the law of the country of employment, the provisions of the Articles of Association, and internal regulations.

On December 31, 2023, there were no open loan or credit contracts between the company and members of the Executive Committee or related third parties.

5.6 Overview of LTI plans: disclosure of outstanding and settled entitlements

5.6.1 Restricted Share Plan (RSP)

The Restricted Share Plan (RSP) replaced during the reporting year was in effect for the CEO up until the 2022 financial year. The number of granted shares was dependent on the achievement of EPS targets. More information on the plan can be found in the Compensation Report 2022.

The following table provides an overview of the allocation of restricted shares since 2018 and shows the development of the value of allocated shares during the four-year blocking period (provided this has already ended). The last restricted shares will be released on March 31, 2026.

5.6.2   Restricted Share Unit Plan (RSU)

The Restricted Share Unit (RSU) Plan replaced during the reporting year was applied for the members of the Executive Committee, excluding the CEO, until the 2022 financial year. The number of granted RSUs was depended on the achievement of EPS targets. More information on the plan can be found in the Compensation Report 2022.

The following table provides an overview of the allocation of Restricted Share Units (RSU) since 2019 and shows the development of the value of granted RSUs during the three-year vesting period (provided this has already ended).

5.6.3 Performance Share Unit Plan (PSU)

The following table provides an overview of the previously allocated Performance Share Units (PSU) and shows the development of the value of allocated PSUs during the three-year vesting period (provided this has already ended).