Remuneration

Directors’ remuneration

The most common form of remuneration for board directors is through a combination of cash and shares. From our sample of SMI companies, 80% remunerate non-executive directors in this way.

The remaining 20% of companies have deployed a mix of remuneration strategies. One company remunerates its NEDs only in cash, one exclusively in shares, one with a fixed cash component and a portion based on attendance. One company opted not to report the details of its NED remuneration practices.

NED fee structure

The average NED retainer fee for SMI companies is CHF 222 158, a slight decrease from the CHF 222 807 reported last year. Individual companies pay NED fees ranging from CHF 100 000 to CHF 300 000.

When averaged across all SMI companies, 53% of the NED remuneration is paid out with a fixed cash component and 47% with a stock component, the valuation of which partially depends on stock price. SMI companies reported an average total board remuneration spending of CHF 5 438 081.

Chair remuneration

The average retainer fee for board chairs is CHF 1 860 026 across SMI companies, a 7.6% decrease from the previous year. While individual boards adjusted the compensation of their chairs, the primary factor behind this development was the change in SMI constituents, particularly Credit Suisse Group’s departure from the Index.

The majority of chair fees are composed of cash and shares (90%), while two companies did not provide a breakdown of their chair remuneration. When averaged across all SMI companies, 53% of the chair remuneration is paid out with a fixed cash component and 47% with a stock component. This distribution aligns with the compensation structure commonly seen for NEDs as well. On average, the chair fee accounts for 32% of the company’s expenses for their boards.

Committee remuneration

The majority of SMI companies offer compensation for committee participation, and 18 companies disclose data on the matter: 85% of SMI companies pay their committee chairs and members a separate fee for their work on a specific committee, and one company opted to remunerate the attendance at committee meetings.

2024 committee fees

On average, risk committee membership offers the highest compensation. But when comparing fees for the audit and risk committees within the same company, rather than averaging across the entire index as shown in the table above, remuneration levels are generally at the same level.