Annual Report 2024

Remuneration Policy

General Principles

Belimo has established a transparent and long-term-oriented remuneration system. It ensures market-competitive and fair remuneration. All employees should feel valued for their work and benefit from the Company’s success. They receive a fixed base salary and a variable remuneration, which consists of an annual cash bonus and, for our major subsidiaries, voluntary participation in the Employee Share Purchase Plan. The plan allows employees to purchase Company shares at preferential conditions and thus fosters the sense of ownership and the alignment with shareholders‘ interests.

Global Human Resources defines the minimum standards of employee remuneration throughout the Group. Together with regional and local Human Resources representatives, the managing directors of the subsidiaries are responsible for ensuring these requirements are met and that appropriate remuneration policies are implemented in accordance with local laws, regulations, cultures, and market conditions.

Belimo is committed to internal wage justice and equal pay. To guarantee the principles of wage justice and competitive pay, Belimo continually monitors its remuneration system throughout the Company. A global job evaluation methodology is applied to ensure consistency, and remuneration is regularly benchmarked against the market practice. The internal remuneration system is screened for potential gender pay gaps. In 2021, Belimo evaluated its Swiss entities’ equal pay practices using the official “Logib” tool of the Swiss Confederation. This audited self-assessment identified no gender pay gap. In addition, the managing directors and Human Resources representatives of all subsidiaries are instructed to identify and mitigate any gender pay gaps during the annual salary adjustment process.

Planned changes in the Remuneration System of the Executive Committee

Upon recommendation of the Remuneration and Nomination Committee, the Board of Directors has decided to make changes to the Remuneration System of the Executive Committee as of 2025. As in the past, the remuneration will consist of fixed and variable remuneration elements. The main changes apply to the key performance indicators utilized to measure the performance, the pay-out of the variable remuneration, the introduction of clawback rules, and the introduction of shareholding guidelines. Find here a summary of the planned major changes, details will be provided in the 2025 Remuneration Report.

For the individual members of the Executive Committee, the target variable remuneration will be set between 80% and 100% of the base pay.

The variable remuneration will be designed to reward the achievement of business objectives of the Group over a period of one year. The objectives will no longer contain individual objectives. Individual objectives will still be part of the performance management but no longer of the remuneration. In total, 70% of the variable remuneration will be linked to financial key performance indicators and 30% to Belimo's Balanced Scorecard (BSC) Index.

All objectives are aligned with the Belimo Growth Strategy 2030, focusing on long-term goals. Financial key performance indicators include Group net sales growth, Group EBIT margin, Group Return on Capital Employed (ROCE), and, in case of regional responsibility, regional net sales growth, and regional cost ratio.

The BSC Index primarily encompasses long-term financial and non-financial strategic objectives, structured around three initiatives for each of our four core values: Customer Value, Operational Excellence, Solution Leadership, and Credibility Culture. Notable initiatives within the BSC include RetroFIT+, Grow Asia Pacific, and Digital Ecosystem. Under the value of Credibility Culture, we focus on initiatives related to our Values, leadership and sustainability. Lastly, the financial perspective features three initiatives aimed at enhancing financial performance, with a strong emphasis on sustainable growth, high profitability, and effective capital utilization.

Find below the details of the future business objectives of Belimo:

The maximum variable remuneration pay-out will in total be capped at 176% of the target variable remuneration for all members of the Executive Committee. To even better align the interests of the Executive Committee with those of the shareholders of BELIMO Holding AG and to ensure long-term commitment, 40% of the target variable remuneration will be paid out in form of Belimo restricted shares being subject to a three-year restriction period from the allocation date. In addition, there will be the option to voluntarily purchase additional restricted shares at a discounted purchase price, up to a maximum extent of 40% of the target variable remuneration.

Introduction of Clawback Rules

As of January 1, 2025, Belimo has introduced clawback rules for the Executive Committee. The Company is entitled to seek repayment of some, or all of the actual variable remuneration paid to a member of the Executive Committee, or to retain all or parts of any unpaid variable remuneration, in case the action or behavior of such member intentionally, or in a grossly negligent manner, violates applicable laws and regulations, their employment contract or Belimo’s internal codes, guidelines or policies (serious misconduct).

Belimo is also entitled to recoup actual variable remuneration that has been paid on the basis of financial statements that needed to be materially restated, for the three years preceding the date the Company determines that a restatement is required. Former Executive Committee members remain subject to these rules during three years after the end of their employment.

Introduction of Shareholding Guidelines

Belimo has introduced Shareholding Guidelines for the Executive Committee together with new Shareholding Guidelines for the Board of Directors (see below) as of January 1, 2025. The CEO is required to hold 200% of his base salary in registered shares, whereas each member of the Executive Committee is required to hold 100% of their base salary in registered shares. The value of individual shareholdings is calculated against the average year end price per registered share of the previous three years. Executive Committee members are granted a five-year period to reach the minimum ownership thresholds starting from January 1, 2025, or from their beginning of their tenure. The assessment of the shareholdings is conducted annually by the Board of Directors.

Planned changes in the Remuneration of the Board of Directors

Upon recommendation of the Remuneration and Nomination Committee, the Board of Directors has decided to make changes to the Remuneration System of the Board of Directors as of the Annual General Meeting 2025. The annual fixed fee of the Chairman of the Board will be increased from gross CHF 254 000 to gross CHF 330 000. This will bring the compensation in line with the market of our peer group, based on the remuneration benchmark study detailed in the next chapter of this report. In addition, an annual committee fee of gross CHF 20 000 will be introduced for the Chairpersons of the committees. This is done to reflect market practice and compensate for the additional workload of the Chairpersons.

Since the term of office started at the Annual General Meeting 2024, 40% of the Board of Directors’ fixed remuneration is paid out by way of an award of non-discounted, three-year restricted BELIMO Holding shares. Together with the introduction of Shareholding Guidelines for the Executive Committee, the Board of Directors will introduce Shareholding Guidelines for the Board of Directors as of January 1, 2025. Each member of the Board of Directors is required to hold 100% of their annual fee in registered shares. The value of individual shareholdings is calculated based on the average year end price per registered share of the previous three years. Board members are granted a five-year period to reach the minimum ownership thresholds starting from January 1, 2025, or from their first election. The assessment of the shareholdings is conducted annually by the Board of Directors.

Remuneration Benchmark Analysis

In 2022, the Remuneration and Nomination Committee conducted a review and a benchmark analysis of the remuneration structure and levels of the Board of Directors and the Executive Committee functions. The study was conducted by a remuneration expert team of PricewaterhouseCoopers (PwC). Prior to the study, it was ensured that PwC was able to render independent support free of conflicts. The peer group of 23 stock-listed Swiss companies depicted below was selected by Belimo:

The data obtained in this benchmarking analysis plus annually purchased market data has been used as a basis in this reporting period to adjust the total remuneration of the members of the Executive Committee.

Remuneration of the Board of Directors

To guarantee independence in executing their supervisory duties, the members of the Board of Directors receive a fixed remuneration that does not contain any performance-related component. The yearly fee amounts to gross CHF 254 000 for the Chairman, and gross CHF 124 000 for the other members of the Board of Directors. Since the term of office starting at the Annual General Meeting 2024, the Board of Director’s fees are paid out 60% in cash and 40% in non-discounted shares restricted for a period of three years.

Furthermore, Board members receive a flat-rate allowance for expenses. Additional fees for Board members who took on special tasks may be paid as well; however, none were paid in the period under review (2023: none).

The remuneration of the Board of Directors is subject to regular social security contributions and is currently not subject to pension contributions.

Remuneration of the Executive Committee

The remuneration of the Executive Committee includes the following elements:

Fixed Remuneration

Base Salary

The base salary, paid in cash, is determined primarily based on the following factors:

• Market practice and competitiveness.
• Scope and complexity of the function.
• Profile of the individual (skills, experience of the individual in the function).

It is reviewed every year and may be adjusted with consideration of market developments.

Other Benefits

Other benefits include the private use of a Company car according to local tax law or annual travelcards for public transportation.

Variable Remuneration

The variable remuneration is designed to reward the achievement of business objectives of the Group and its divisions, as well as the fulfillment of individual performance targets as defined within the Management by Objectives process, over a period of one year.

In total, 60% of the variable remuneration is linked to financial key performance indicators and 40% to non-financial business objectives.

Design of variable remuneration

The financial key performance indicators include sales growth, EBIT margin, regional sales growth, and cost ratio targets. The annual targets are derived during the yearly budget process, taking into account the long-term growth strategy objectives as well as the actual and the forecasted results for the current fiscal year.

Non-financial business objectives are set at the beginning of the year. They are closely linked to the Belimo value-creation model.

Each member of the Executive Committee is responsible for several objectives regarding the four values of Belimo. The objectives focus, for example, on project milestones, sustainability, product launches, engagement score, and operational improvements. They are generally cascaded in the organization to ensure a consistent focus of all employees on value creation for Belimo.

Up to 80% of the expected variable remuneration is paid out in December of the current fiscal year. The remaining portion is paid out in March of the following year, based on effective performance.

To align the interests of the Executive Committee with those of the shareholders of BELIMO Holding AG, the members of the Executive Committee are obliged to invest a certain percentage of the total variable remuneration in Belimo shares at preferential conditions via the Employee Share Purchase Plan. The minimal mandatory participation amounts to 40% of the variable remuneration amount paid out in December (which corresponds to 80% of the variable remuneration), with the option of voluntarily increasing participation to up to the entire amount of the variable remuneration paid out in December. The purchased shares are restricted for a three-year period. This plan ensures a long-term commitment on the part of the Executive Committee in addition to a participation in the entrepreneurial risk.

Social Security and Pension

Pension benefits primarily include retirement and insurance plans that provide a reasonable level of income in case of retirement, death, and disability. The pension fund exceeds the minimum legal requirements of the Swiss Federal Law on Occupational Retirement, Survivors‘, and Disability Pension Plans (BVG) and is in line with commensurate market practice.

Remuneration Mixes and Caps

At target, the variable remuneration for the CEO is between 91% and 107% of the base salary:

For the other members of the Executive Committee, the variable remuneration is between 80% and 97% of the base salary at target:

If the targets are exceeded, the overall variable remuneration of the CEO and the other members of the Executive Committee is capped at 200% of the fixed remuneration.

We are convinced that our remuneration plans as described above are designed to support a long-term and sustainable focus on the growth and success of Belimo.

Contractual Terms

All members of the Executive Committee have permanent employment contracts with notice periods of a maximum of 12 months. Members of the Executive Committee are not entitled to any severance or change of control payments. Non-competition clauses are not part of the employment contracts.