Letter to Shareholders
I am pleased to present SoftwareONE’s 2020 Compensation Report on behalf of the Nomination and Compensation Committee (NCC) and the Board of Directors (BoD). Our 2020 Compensation Report outlines SoftwareONE’s overall compensation policy, principles and compensation framework. It discloses the compensation awarded to members of both the BoD and the Executive Board (EB) throughout the 2020 financial year. It is compiled in accordance with the Ordinance against Excessive Compensation (OaEC) applicable to Swiss listed companies, the Directive on Information relating to Corporate Governance of SIX Swiss Exchange, as well as the Swiss Code of Best Practice.
This first full financial year as a public company was characterized by further efforts to develop and implement the intended compensation framework. The overall goal of these activities was to increase the focus on long-term value creation by aligning the interests of the Executive Board with SoftwareONE’s shareholders, as well as to recognize and retain talent to continue our successful journey as a listed company. Although the last financial year was marked by the COVID-19 pandemic, the NCC did not adjust the compensation framework due to the effects of the pandemic and treated 2020 as a normal year for the purpose of measuring and awarding compensation.
As announced in last year’s report, in 2020, we continued to develop the compensation framework for the BoD. To further align their compensation with the relevant Swiss market practice, a fixed portion representing 40% of the total BoD compensation, paid in the form of shares with a restriction period of three years was introduced. In addition, a comprehensive BoD compensation benchmarking was performed following which the level of annual fees remained unchanged.
For the EB, we continue to believe in maintaining a strong pay-for-performance compensation framework thus motivating our EB members to create value for SoftwareONE and its shareholders. We have therefore adapted the Short-Term Incentive (STI) plan design to better align it with general market practice and good governance principles through the abolishment of the quarterly bonus scheme for EB members. Additionally, amendments to the STI metric weightings were made to increase the portion relating to overall company performance. Moreover, and in the spirit of further strengthening our pay-for-performance philosophy, we introduced a Long-Term Incentive (LTI) plan for our EB and selected senior management. This also allows for an increased alignment with the interests of shareholders and promotes long-term value creation for all internal and external stakeholders. We successfully awarded the first LTI grant in May 2020.
The NCC will continue to undertake regular assessments, reviews and amendments of the compensation framework, to ensure SoftwareONE attracts the right talent, and to align the interests of different stakeholders and maintain a high-performance culture.
Finally, we completed the introduction of an Employee Share Purchase Plan (ESPP) to strengthen the overall sense of entrepreneurship by facilitating the purchase of company shares for all employees who wish to participate in the plan.
Under this plan, the broad employee population at SoftwareONE is given the opportunity to convert up to 25% of their variable target compensation into this share-based plan, for which reason this is deemed an equity-settled share-based compensation plan. Furthermore, upon purchase of SoftwareONE shares, the company will match the shares purchased in a four to one ratio, granting the employees one additional share for every four shares purchased under the ESPP.
2021 Annual General Meeting
In line with the OaEC and our Articles of Incorporation, we will ask our shareholders to cast a prospective and binding vote on the maximum aggregate amount of compensation for the BoD for their term of office from the 2021 AGM to the 2022 AGM and for EB members for the financial year 2022. In addition, we will ask our shareholders to endorse this 2020 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