Remuneration

Directors’ remuneration

Unlike most countries in Europe, most SMI Expanded companies (68.8%) remunerate board directors, at least in part, with shares. Fifteen companies pay directors under a cash retainer scheme, 12 of which are listed on the SMI Mid.

The average retainer fee for non-executive directors is CHF 190 305 across all SMI companies, 4% lower than the average reported in our previous survey. This is due largely to changes in the companies constituting the SMI Expanded.

	Average NED retainer	% change from last year
SMI	207 314	–3.7%
SMI Mid	182 623	–0.2%
SMI Expanded	190 305	–4%

Continuing the trend noted in our 2021 Index, approximately 76% of companies have not changed their non-executive director retainer fee and 55% have not changed their chair retainer fee. Because most companies in our sample remunerate directors at least in part with shares, the average total payout is susceptible to changes in average share price.

The average NED cash retainer remained virtually flat across the sample, a significant change from the NED cash retainer increase of 8% noted in our previous edition. In comparison, the average NED retainer paid in shares decreased by 9.4%, following a 3% drop recorded in 2020.

The average retainer fee for chairs in the SMI is CHF 1 861 104, an increase of 3.6% on the previous year. In the SMI Mid, a 13.7% decrease took the chair fee to an average CHF 687 514. These differences can mostly be ascribed to changes in constituent companies in the SMI and SMI Mid indices. The majority of chair fees are composed of cash and shares, with the exception of 15 companies. As in 2021, the highest-paid chair sits on the board of UBS, their retainer unchanged at CHF 4 900 000.

Average total fees for non-executive directors on SMI Expanded boards are significantly higher than in most other international markets, with the exception of the US where average total compensation for directors of S&P 500 companies is 23% higher than in the SMI Expanded. Note: individuals whose compensation is based on a dual role (e.g., chair and CEO) are excluded unless the remuneration for both roles is kept separately.

Committee remuneration

The vast majority of SMI companies provide an additional fee for committee work in addition to the role retainer. Only nine pay additional fees for all of their committees. Ten companies pay additional fees for some committees, but not all, while seven companies do not disclose remuneration, or whether they remunerate committee work.

The highest average compensation is paid to an SMI audit committee chair — representing more than double the average paid to an SMI Mid audit committee chair. This significant difference is observed across all mandatory committees; substantial differences also apply to committee membership.

Average core committee fees

The average total board fee this year for SMI companies is CHF 5 611 710 — a 3% increase from 2021. UBS remains the highest total board fee constituent, at more than CHF 12 million in total. UBS also has the highest average cost per board member (CHF 1 010 409, up from last year s CHF 963 854), well above the SMI average cost per board member of CHF 512 677 (CHF 486 061 in 2021).

Average core committee fees

	SMI Chair	SMI Mid Chair	SMI Member	SMI Mid Member
Audit	131	59	61	24
Remuneration	103	57	53	21
Nomination	55	42	40	20

In the SMI Mid, the average total fee paid to constituent boards this year is CHF 2 692 232, down from CHF 3 062 796 in 2021. The average cost per member equates to CHF 318 731.

Dufry tops the SMI Mid list with the highest total board cost (CHF 7 179 800), followed by The Swatch Group (CHF 4 820 365) at almost 33% less.