Fair remuneration

We put great emphasis on fair remuneration that recognizes skills and performance. Furthermore, we strive to pay competitive and performance-related remuneration in order to retain and recruit qualified employees for our Group. Our salary model is aligned with customary market values in the banking sector. The salaries of women and men in the same job position and at the same performance level are rated equally. Salaries amounted to a total of CHF 142.6 million in 2012 (2011: CHF 147.1 million).

Employee remuneration is determined by qualifications and comprises three components: a basic salary, variable compensation (profit share) based on Group performance, as well as additional benefits. Once a year, basic salary levels are verified. Our employment contracts are individually negotiated in meetings between employees and their supervisors and are not based on collective pay negotiations.

On 1 January 2012, the Group regulations «Vergütungsstandards» (Compensation and Remuneration Standards) came into force. They define the framework for the Group’s remuneration policy, especially in regard to its alignment to risk management. These regulations determine the basis, values and goals and outline the minimum requirements for the structure of the remuneration systems. At the start of 2011, the new EU remuneration regulation became law. As a member of the EEA, Liechtenstein incorporated this directive into national law through the passage of Appendix 4.4 to the ordinance on banks and securities firms (Banking Ordinance) on 1 January 2012.

LLB had already met most of the requirements contained in this law prior to its enactment. The ruling mainly affects the most senior level of management and the heads of the control functions as defined in the Group regulations (Group Internal Audit, Group Compliance, Group Legal, Group Finance & Risk). The ruling regulates, among other things, the variable component of the total amount of remuneration and stipulates that the equity portion of the variable compensation (LLB bearer shares) should be at least 40 percent. It provides for a claw-back regulation for the blocked portion of the variable compensation, which is particularly geared towards individual performance and risks. A new and transparent remuneration system for all employees that corresponds to our performance-oriented corporate culture is planned for the start of 2014.

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