Components of compensation to Board of Directors

ABB sets and periodically reviews compensation for Board members based on a comparison of the compensation of non-executive board members of publicly traded companies in Switzerland that are part of the Swiss Market Index.

Members of the Board of Directors are paid for their service over a 12-month period that starts with their election at the annual general meeting. Payment to members of the Board is made in two installments, one following the first six months of their term and one at the end. Board members do not receive pension benefits and are not eligible to participate in any of ABB’s employee incentive programs.

To align the interests of Board members with those of ABB’s shareholders, half of their compensation is paid in the form of ABB shares, though Board members can alternatively choose to receive all their compensation in shares, and the shares are kept in a blocked account for three years. Departing Board members are entitled to the shares when they leave the company unless agreed otherwise.

The number of shares awarded is calculated prior to each semi-annual payment by dividing the sum to which they are entitled by the average closing price of the ABB share over a predefined 30-day period.

The compensation amounts per individual are listed in the table below:

 

Paid in 2011

 

November
Board term 2011/2012

May
Board term 2010/2011

 

Name/Function

Settled
in cash(1)

Settled in
shares –
number of
shares
received(2)

Settled
in cash(1)

Settled in
shares –
number of
shares
received(2)

Total compen-
sation paid
2011(3)(4)(5)

 

(CHF)

 

(CHF)

 

(CHF)

(1)

Represents gross amounts paid, prior to deductions for social security, withholding tax, etc.

(2)

Number of shares per Board member is calculated based on net amount due after deductions for social security, withholding tax etc.

(3)

For the 2011–2012 Board term, all members elected to receive 50% of their gross compensation in the form of ABB shares, except for Hubertus von Grünberg, Hans Ulrich Märki and Michel de Rosen who elected to receive 100%.

(4)

For the 2010–2011 Board term, all members elected to receive 50% of their gross compensation in the form of ABB shares, except for Hubertus von Grünberg and Hans Ulrich Märki who elected to receive 100%.

(5)

In addition to the Board remuneration stated in the above table, the Company paid CHF 213,122 in 2011 in employee social security payments.

(6)

Member of the Finance, Audit and Compliance Committee.

(7)

Member of the Governance, Nomination and Compensation Committee.

(8)

Bernd W. Voss did not stand for election to the Company’s Board at the AGM in April 2011.

(9)

Ying Yeh was elected to the Company’s Board at the AGM in April 2011.

Hubertus von Grünberg
Chairman of the Board

25,917

19,303

1,200,000

Roger Agnelli(6)
Member of the Board

75,000

3,196

75,000

2,388

300,000

Louis R. Hughes(6)
Member of the Board and beginning with the 2011/2012 board term Chairman of the Finance, Audit and Compliance Committee

100,000

4,272

75,000

2,388

350,000

Hans Ulrich Märki
Member of the Board and Chairman of the Governance, Nomination and Compensation Committee

11,746

8,757

400,000

Michel de Rosen(7)
Member of the Board

6,392

75,000

2,388

300,000

Michael Treschow(7)
Member of the Board

75,000

3,251

75,000

2,419

300,000

Bernd W. Voss(8)
Member of the Board and Chairman of the Finance, Audit and Compliance Committee until the 2011/2012 board term

100,000

3,222

200,000

Jacob Wallenberg(6)
Member of the Board

75,000

3,196

75,000

2,388

300,000

Ying Yeh(7) (9)
Member of the Board

75,000

3,197

150,000

Total

400,000

61,167

475,000

43,253

3,500,000

© Copyright 2012 ABB.