Letter to Shareholders
I am pleased to present you SoftwareONE’s 2019 Compensation Report on behalf of the Nomination and Compensation Committee and the Board of Directors.
Our first Compensation Report outlines SoftwareONE’s overall compensation policy and principles and discloses the compensation awarded to both members of the Board of Directors (BoD) and the Executive Board (EB) throughout the financial year. It is compiled in accordance with the Ordinance against Excessive Compensation (OaEC) applicable to Swiss listed companies, the Directive of Corporate Governance of SIX Swiss Exchange as well as the Swiss Code of Best Practice.
The 2019 financial year was marked by several corporate events. In January 2019 SoftwareONE completed the acquisition of Comparex, with the integration expected to be completed by the end of this year. Another important milestone was SoftwareONE’s IPO at the Swiss stock exchange on 25 October 2019, which was a natural next step in SoftwareONE’s development, intended to enhance its visibility and global profile while providing access to capital markets.
Established at the time of the IPO, the first months of the NCC members’ term were dedicated to the conduct of an extensive review of both the BoD and EB compensation frameworks and their overall fit with SoftwareONE’s new situation as a public company.
Our highly qualified, motivated and empowered global workforce which exemplifies our result-driven, customer-first company culture as well as our seven core values of speed, customer focus, employee satisfaction, humbleness, passion, integrity and discipline lie at the foundation of SoftwareONE’s success. We believe that people are our greatest asset and that our commitment to our employees’ professional and personal development, our performance-driven compensation structure and our recognition award programs motivate and empower our employees to deliver the highest level of service to our customers.
In this regard, the NCC started to develop a compensation framework with the goal of strengthening future long-term value creation and aligning the interests of the EB and extended leadership team with those of SoftwareONE’s shareholders, as well as recognizing and retaining talent to continue our successful journey, now as a listed company.
The Outlook 2020 section of our 2019 Compensation Report outlines the company’s planned changes to the compensation framework for 2020.
For the BoD, this includes the following:
- Review of the BoD annual base fees and additional committee fees based on a conducted BoD benchmark as well as further accentuation of the role of the Lead Independent Director within the BoD to reflect SoftwareONE’s commitment to build a robust BoD governance
- Introduction of a fixed portion of 40% of BoD compensation paid in the form of blocked shares beginning at the 2020 Annual General Meeting (AGM)
For the EB, we believe in developing a strong pay-for-performance compensation program that motivates our EB members to create value for SoftwareONE and its shareholders. For this reason, the adjustments made to the EB compensation framework have all followed this common focus by means of:
- Further alignment of the Short-Term Incentive (STI) plan with general market practice and good governance principles through the abolishment of the quarterly bonus scheme for EB members
- Amendments to the STI metric weighting in order to further promote “pay-for-performance” alignment with overall company performance
- The introduction of a Long-Term Incentive (LTI) plan for our EB and selected senior management, in order to increase interest alignment with those of shareholders as well as promote long-term value creation for all company internal and external stakeholders
The NCC followed a comprehensive approach in selecting the companies to be included in SoftwareONE’s peer group for external compensation benchmarking. The NCC believes that benchmarking against a consistent and relevant set of peer companies that are similar to SoftwareONE in scope, product and service offered, will enable the company to set pay levels towards the middle of the respective market range. This will reinforce talent attraction, motivation and retention efforts needed to support the company’s success.
2020 Annual General Meeting
In line with the OaEC and our Articles of Incorporation, we will ask our shareholders to cast a binding vote on the maximum aggregate amount of compensation for the BoD for their term of office from the 2020 AGM to the 2021 AGM and for EB members for the financial year 2021. In addition, we will ask shareholders to endorse the 2019 Compensation Report in a consultative vote.
We look forward to receiving your support at the forthcoming AGM and thank you for your ongoing trust in SoftwareONE.
Chairwoman of the Nomination and Compensation Committee