Letter to Shareholders
I am pleased to present SoftwareONE’s 2021 Compensation Report on behalf of the Nomination and Compensation Committee (NCC) and the Board of Directors (BoD). Our 2021 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 2021 financial year. It is compiled in accordance with the Ordinance against Excessive Compensation (OaEC) applicable to listed Swiss companies, the Directive on Information related to Corporate Governance of SIX Swiss Exchange, as well as the Swiss Code of Best Practice.
This second full financial year as a public company was characterized by the continuous development and refinement of our compensation framework. As in the previous year, the overall goal was to continue to focus on long-term value creation by aligning the interests of the EB with SoftwareONE’s shareholders, as well as by recognizing and retaining talent in the highly competitive global technology market.
In the course of 2021, and in line with Swiss market best practices, we maintained our commitment to having a substantial part of the BoD remuneration (40%) paid in the form of shares. An additional benchmark conducted during 2021 showed that the compensation of the members of the BoD is in line with general market practice, both in terms of level and structure, and resulted in no changes.
For the EB, we believe our established pay-for-performance compensation framework still fits the purpose to motivate our EB members to create value for SoftwareONE and its shareholders. Nevertheless, as a result of our continuous review of market best practices and feedback obtained from shareholders, as of 2021, we introduced ownership requirements for the EB members. Furthermore, we have also implemented a clawback provision to protect the interests of both the shareholders and the company, which allows for a partial or full recovery of equity allocated to EB members under the Long-Term Incentive (LTI) plan.
Finally, our Short-Term Incentive (STI) plan has evolved with the synergies target metric replaced by the company’s EBITDA margin with the aim of further strengthening management efforts to achieve operational excellence and proactive cost management. In addition, we have introduced an ESG (Environmental, Social and Governance) related metric in the company's compensation framework, now part of the individual goals which have been incremented to 15%. During 2021, the NCC further elaborated on this compensation element to ensure a proper fit to the corporate culture, goals and strategic ambitions of SoftwareONE in an ongoing volatile environment. Details of this are further outlined in the Outlook section.
The NCC will continue to undertake regular assessments, reviews and amendments to the compensation framework, to ensure SoftwareONE attracts the right talent and to align the interests of different stakeholders and maintain a high-performance culture.
2022 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 2022 AGM to the 2023 AGM and for EB members for the financial year 2023. In addition, we will ask our shareholders to endorse this 2021 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.
Chair of the Nomination and Compensation Committee