Pension scheme and employment contracts for Senior Management
Pension scheme for Senior Management
The base salaries of Senior Management are insured in a layered pension plan system, which includes the state-controlled social security schemes, i.e. AHV/IV, the Holcim Pension Fund, the Holcim Supplementary Pension Fund and the Gemini Pension Fund. With the exception of the Swiss Federal AHV/IV and some local social security systems, all pension plans are defined contribution promises offering benefits payable in the form of retirement, disability, children, surviving spouse and orphans’ pensions or equivalent lump sums.
The Nomination & Compensation Committee has reviewed and determined the pension scheme for Senior Management as of June 30, 2005, and February 23, 2010. Accordingly, the pension scheme for Executive Committee members and the CEO is targeted to achieve, at the retirement age of 62 and based on 10 years of service in Senior Management and 20 years of service with the Group, an amount of 40 percent of the average of the last three annual base salaries, or 50 percent for other senior managers, taking into account all pension schemes related to current and past occupation, including state-controlled social security schemes. Early or deferred retirement leads to adjustments based on actuarial calculations.
In the event of differences between the actual pension fund benefits and the target pension, the Nomination & Compensation Committee decides in view of forthcoming retirements about possible contributions to the individual insurance accounts. No contributions were made in 2014 and 2013.
Employment contracts for Senior Management
The contracts of employment of Senior Management are concluded for an indefinite period of time and may be terminated with one year’s notice. Contracts of employment no longer include severance compensation.
Upon appointment, members of the Executive Committee may be granted a single allotment of options on registered shares in the company by the Nomination & Compensation Committee. The options are restricted for nine years and have a maturity period of twelve years. The company reserves the underlying shares as part of treasury stock or purchases them from the market. Individual allotments made during recent years are shown under Shareholdings and loans in this Annual Report.
Options allotted upon appointment to the Executive Committee are subject to forfeiture without compensation, for as long as they are restricted, if the Executive Committee member leaves the Group, except in the case of retirement, death or disability. Shares and options received as part of annual remuneration may not be sold or pledged until the end of the restriction period. If a member steps down from Senior Management, the restriction period for such shares and options allocated as part of the annual remuneration remains in force without any adjustment in terms of duration.