Note 11 Executive Committee compensation

The table below provides an overview of the total compensation of members of the Executive Committee (EC) in 2013, comprising cash-based compensation and share-based compensation. Cash-based compensation included the base salary, accrued short-term variable compensation for 2013, pension benefits, as well as other benefits representing mainly social security and health insurance contributions. Share-based compensation includes an estimate of the value of the grants under the LTIP and other share-based awards. The compensation is shown gross (i.e. before deduction of employee’s social insurance and pension contributions).

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Name

Base
salary

Short-term
variable
compen- sation(1)

Pension
benefits

Other
benefits(2)

2013
Total cash-based compen- sation

Estimated value of share-based grants under the LTIP in 2013(3)

Estimated value of replacement and special share-based grants in 2013(3)

2013
Total (incl. conditional share-based grants)

 

(CHF)

(CHF)

(CHF)

(CHF)

(CHF)

(CHF)

(CHF)

(CHF)

(1)

The table above shows accruals related to the short-term variable compensation for the year 2013 for all EC members, except for Prith Banerjee, who received, in May 2013, a pro-rata short-term variable compensation payment covering his period of service as an EC member in 2013. For all other EC members, the short-term variable compensation will be paid in 2014, after the publication of the financial results. In March 2013, the current and former EC members received the 2012 short-term variable compensation payments totaling CHF 12,641,252. Short-term variable compensation is linked to the objectives defined in the ABB Group’s scorecard. Upon full achievement of these objectives, the short-term variable compensation of the CEO corresponds to 150 percent of his base salary, while for all other EC members it represents 100 percent of their respective base salary. The Board has the discretion to approve a payout that is up to 50 percent higher (representing up to 225 percent of the base salary for the CEO and 150 percent of the base salary for other members of the EC), if the objectives are exceeded.

(2)

Other benefits comprise payments related to social security, health insurance, children’s education, transportation, tax advice and certain other items.

(3)

At the day of vesting (June 5, 2016) the value of the share-based awards granted under the LTIP may vary from the above numbers due to changes in ABB’s share price and the outcome of the performance (earnings per share) parameter. The LTIP is also subject to service conditions, while the other share-based awards are subject to service and/or other conditions. The above amounts have been calculated using the market value of the ABB share on the day of grant and in the case of the performance component of the LTIP, the Monte Carlo simulation model.

(4)

The above compensation figures for Ulrich Spiesshofer represent compensation for the period January 1 to September 14, 2013, in his capacity as Head of the Discrete Automation and Motion division and thereafter for his role as Chief Executive Officer. His annual base salary as CEO is CHF 1,600,000.

(5)

Jean-Christophe Deslarzes received a replacement share grant of 144,802 shares for foregone benefits with his previous employer, representing a grant date fair value of CHF 3,381,127. Of the total, 78,983 shares vest on November 15, 2016, while 65,819 shares vest on November 15, 2018.

(6)

Diane de Saint Victor received a special retention share grant of 150,000 shares representing a grant date fair value of CHF 3,142,500. The shares vest on December 31, 2015.

(7)

Frank Duggan received 20 percent of his base salary in AED and 80 percent in EUR at a fixed AED/EUR exchange rate for the period January to December 2013. All AED amounts were converted into Swiss francs at a rate of CHF 0.2422914 per AED.

(8)

On May 16, 2013, Greg Scheu received a special bonus of CHF 168,750, which was settled in shares (7,942 shares).

Ulrich Spiesshofer (appointed CEO as of September 15, 2013)(4)

1,097,346

1,336,375

247,293

232,225

2,913,239

2,859,135

5,772,374

Eric Elzvik
(joined the EC on February 1, 2013)

779,173

779,167

238,437

228,478

2,025,255

981,672

3,006,927

Jean-Christophe Deslarzes (joined ABB on November 15, 2013)(5)

107,938

108,611

20,557

26,576

263,682

991,307

3,381,127

4,636,116

Diane de Saint Victor(6)

1,000,001

1,000,000

283,181

196,137

2,479,319

1,154,907

3,142,500

6,776,726

Frank Duggan(7)

666,322

676,257

322,308

634,447

2,299,334

910,437

3,209,771

Greg Scheu(8)

731,259

742,500

251,428

341,149

2,066,336

881,952

2,948,288

Pekka Tiitinen (joined the EC on September 15, 2013)

206,508

206,111

55,892

49,545

518,056

801,222

1,319,278

Tarak Mehta

760,424

766,500

230,159

363,814

2,120,897

910,437

3,031,334

Veli-Matti Reinikkala

770,006

770,000

270,799

204,648

2,015,453

585,598

2,601,051

Bernhard Jucker

965,842

969,000

287,455

239,366

2,461,663

1,246,516

3,708,179

Claudio Facchin (joined the EC on December 1, 2013)

58,334

58,334

19,373

3,790

139,831

816,396

956,227

Total current Executive Committee members

7,143,153

7,412,855

2,226,882

2,520,175

19,303,065

12,139,579

6,523,627

37,966,271

 

 

 

 

 

 

 

 

 

Joe Hogan
(CEO until September 15, 2013)

1,423,758

2,135,625

207,007

948,293

4,714,683

4,714,683

Michel Demaré
(CFO until January 31, 2013)

100,001

100,000

23,154

9,618

232,773

232,773

Gary Steel (EC member until November 15, 2013)

704,376

704,375

255,253

202,724

1,866,728

1,866,728

Prith Banerjee
(EC member until May 31, 2013)

291,667

218,750

101,173

233,192

844,782

844,782

Brice Koch (EC member until November 30, 2013)

773,285

776,050

221,812

249,888

2,021,035

1,005,590

3,026,625

Total former Executive Committee members

3,293,087

3,934,800

808,399

1,643,715

9,680,001

1,005,590

10,685,591

 

 

 

 

 

 

 

 

 

Total

10,436,240

11,347,655

3,035,281

4,163,890

28,983,066

13,145,169

6,523,627

48,651,862

Furthermore, in 2013, certain former EC members received contractual compensation for the period after leaving the EC, as shown in the table below. The compensation included the base salary, accrued short-term variable compensation for 2013, pension benefits, as well as other benefits comprising mainly social security and health insurance contributions. The compensation is shown gross (i.e. before deduction of employee’s social insurance and pension contributions).

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Name

Base salary

Short-term variable compensation(1)

Pension
benefits

Other
benefits(2)

2013
Total cash-based compensation

 

(CHF)

(CHF)

(CHF)

(CHF)

(CHF)

(1)

The short-term variable compensation will be paid in 2014, after the publication of the financial results.

(2)

Other benefits comprise payments related to social security, health insurance, children’s education, transportation, tax advice and certain other items.

(3)

The above compensation figures of Joe Hogan represent compensation for the period September 16 to December 31, 2013, during which he was acting as a Senior Adviser to the ABB Board.

(4)

The above compensation figures of Michel Demaré, Gary Steel and Brice Koch represent contractual compensation for the period following their departure from the EC to December 31, 2013.

Joe Hogan
(CEO until September 15, 2013)(3)

586,253

879,375

85,239

323,314

1,874,181

Michel Demaré
(CFO until January 31, 2013)(4)

1,100,006

1,100,000

255,549

428,053

2,883,608

Gary Steel
(EC member until November 15, 2013)(4)

100,626

100,625

36,465

14,276

251,992

Brice Koch
(EC member until November 30, 2013)(4)

70,551

70,550

20,174

34,447

195,722

Total

1,857,436

2,150,550

397,427

800,090

5,205,503

The table below provides an overview of the total compensation of members of the EC in 2012, comprising cash-based compensation and an estimate of the value (at grant date) of shares conditionally granted under the 2012 one-time Acquisition Integration Execution Plan (AIEP) that vest in January 2014 and the three-year Long-Term Incentive Plan (LTIP) that vest in 2015. Cash-based compensation includes the base salary, accrued short-term variable compensation for 2012, pension benefits, as well as other benefits comprising mainly social security and health insurance contributions. The compensation is shown gross (i.e. before deduction of employee’s social insurance and pension contributions).

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Name

Base
salary

Short-term
variable
compen-
sation(1)

Pension
benefits

Other
benefits(2)

2012
Total cash-based compen- sation

Estimated value of share-based grants under the LTIP in 2012(3)

Estimated value of share-based grants under the one-time AIEP in 2012(3)

2012 Total (incl. conditional share-based grants)

 

(CHF)

(CHF)

(CHF)

(CHF)

(CHF)

(CHF)

(CHF)

(CHF)

(1)

The table above shows accruals related to the short-term variable compensation for the year 2012 for all EC members, except for Peter Leupp, who received in July 2012 a pro-rata short-term variable compensation payment covering the period of his service as an EC member. For all other EC members, the short-term variable compensation will be paid in 2013, after the publication of the financial results. In March 2012, the current and former EC members received the 2011 short-term variable compensation payments totaling CHF 12,102,149. Short-term variable compensation is linked to the objectives defined in the ABB Group’s scorecard. Upon full achievement of these objectives, the short-term variable compensation of the CEO corresponds to 150 percent of his base salary, while for all other EC members it represents 100 percent of their respective base salary. The Board has the discretion to approve a payout that is up to 50 percent higher (representing up to 225 percent of the base salary for the CEO and 150 percent of the base salary for other members of the EC), if the objectives are exceeded. For 2012, the Board exercised its discretion and awarded a 10 percent higher payout, reflecting the Company’s performance against the objectives.

(2)

Other benefits comprise payments related to social security, health insurance, children’s education, transportation, tax advice and certain other items.

(3)

The estimated value of the share-based awards is subject to performance and other parameters (e.g. earnings per share) and may therefore vary in value from the above numbers at the date of vesting, January 3, 2014 (AIEP) and May 31, 2015 (LTIP). The above amounts have been calculated using the market value of the ABB share on the day of grant and, in the case of the AIEP and the performance component of the LTIP, the Monte Carlo simulation model.

(4)

Frank Duggan received 20 percent of his base salary in AED and 80 percent in EUR at a fixed AED/EUR exchange rate for the period January to December 2012. All AED amounts were converted into Swiss francs at a rate of 0.2491288 per AED.

(5)

The above compensation figures for Peter Leupp include contractual payments for the period March 1, 2012 to July 31, 2012, but exclude payments to him, after his retirement from the EC, in his capacity as director of ABB in China and of ABB Limited, India.

Joe Hogan

2,010,011

3,316,500

284,870

431,284

6,042,665

4,115,136

10,157,801

Michel Demaré

1,200,007

1,320,000

271,450

377,968

3,169,425

3,169,425

Gary Steel

805,002

885,500

286,938

172,054

2,149,494

851,003

896,656

3,897,153

Ulrich Spiesshofer

865,673

962,500

235,680

164,948

2,228,801

1,363,655

974,623

4,567,079

Diane de Saint Victor

791,993

880,000

273,583

138,762

2,084,338

899,193

891,085

3,874,616

Bernhard Jucker

950,004

1,045,000

280,372

179,220

2,454,596

1,067,784

1,058,174

4,580,554

Veli-Matti Reinikkala

770,006

847,000

263,892

145,236

2,026,134

865,483

857,673

3,749,290

Brice Koch

816,669

913,000

234,425

212,479

2,176,573

1,099,345

924,511

4,200,429

Tarak Mehta

718,837

803,000

222,181

369,734

2,113,752

820,512

813,119

3,747,383

Frank Duggan(4)

641,963

697,279

313,377

405,734

2,058,353

820,512

835,403

3,714,268

Greg Scheu (joined on May 1, 2012)

450,002

495,000

161,816

42,727

1,149,545

713,574

751,851

2,614,970

Prith Banerjee (joined ABB on May 7, 2012)

456,523

500,914

137,742

401,148

1,496,327

740,017

389,860

2,626,204

Total Executive Committee members as of December 31, 2012

10,476,690

12,665,693

2,966,326

3,041,294

29,150,003

13,356,214

8,392,955

50,899,172

 

 

 

 

 

 

 

 

 

Peter Leupp
(retired from the EC on March 1, 2012)(5)

496,694

291,960

167,900

206,794

1,163,348

1,163,348

Total former Executive Committee members as of December 31, 2012

496,694

291,960

167,900

206,794

1,163,348

1,163,348

 

 

 

 

 

 

 

 

 

Total

10,973,384

12,957,653

3,134,226

3,248,088

30,313,351

13,356,214

8,392,955

52,062,520

LTIP awards granted to members of the EC during 2013 are summarized in the table below. The vesting date of the respective award is listed in the footnotes to the table.

Download XLS (19 kB)

Name

Reference number of shares under the performance component of the 2013 launch of the LTIP(1)(4)

Total estimated value of share-based grants under the performance component of the LTIP in 2013(2)

Number of retention shares granted under the 2013 launch of the LTIP(1)(3)

Total estimated value of share-based grants under the retention component of the LTIP in 2013(2)

Total number of shares granted under the 2013 launch of the LTIP(1)

Total estimated value of share-based grants under the LTIP in 2013(2)

 

 

(CHF)

 

(CHF)

 

(CHF)

(1)

Vesting date June 5, 2016.

(2)

The shares of the performance component are valued using the market value of the ABB share on the grant date and the Monte Carlo Simulation Model. The estimated value applied to the shares of the retention component represents the market value of the ABB share on the grant date of the award.

(3)

The LTIP foresees to deliver 30 percent of the value of the vested retention shares in cash. However participants have the possibility to elect upon vesting to receive 100 percent of the vested award in shares.

(4)

The vested performance component under the plan, if any, will be fully settled in cash. The plan foresees a maximum payout of 200 percent of the number of reference shares, based on the weighted cumulative EPS performance against predefined objectives.

(5)

In connection with his resignation from ABB, Brice Koch forfeited all unvested share grants under the LTIP.

Ulrich Spiesshofer (appointed CEO as of September 15, 2013)

50,024

1,172,858

78,395

1,686,277

128,419

2,859,135

Eric Elzvik (joined the EC on February 1, 2013)

16,659

422,926

27,071

558,746

43,730

981,672

Jean-Christophe Deslarzes (joined ABB on November 15, 2013)

16,659

393,579

27,071

597,728

43,730

991,307

Diane de Saint Victor

19,599

497,564

31,848

657,343

51,447

1,154,907

Frank Duggan

15,023

381,392

25,632

529,045

40,655

910,437

Greg Scheu

14,553

369,460

24,830

512,492

39,383

881,952

Pekka Tiitinen (joined the EC on September 15, 2013)

13,720

321,678

22,294

479,544

36,014

801,222

Tarak Mehta

15,023

381,392

25,632

529,045

40,655

910,437

Veli-Matti Reinikkala

15,091

383,119

9,810

202,479

24,901

585,598

Bernhard Jucker

18,992

482,154

37,033

764,362

56,025

1,246,516

Claudio Facchin (joined the EC on December 1, 2013)

13,720

324,144

22,294

492,252

36,014

816,396

Total Executive Committee members as of December 31, 2013

209,063

5,130,266

331,910

7,009,313

540,973

12,139,579

 

 

 

 

 

 

 

Brice Koch (EC member until November 30, 2013)(5)

16,593

421,250

28,311

584,340

44,904

1,005,590

Total former Executive Committee members

16,593

421,250

28,311

584,340

44,904

1,005,590

 

 

 

 

 

 

 

Total

225,656

5,551,516

360,221

7,593,653

585,877

13,145,169

In addition to the above awards, 9 members of the EC, participated in the tenth launch of ESAP which will allow them to save over a twelve-month period and, in November 2014, use their savings to acquire ABB shares under the ESAP. All EC members who participated in ESAP are each entitled to acquire up to 440 ABB shares at an exercise price of CHF 22.90 per share. In addition, in accordance with the terms and conditions of the tenth launch of ESAP, each participant will receive one share free of charge for every 10 shares purchased.

No parties related to any member of the EC received any fees or remunerations for services rendered to ABB, other than on an arm’s length basis. A related party includes a spouse, children below the age of eighteen, legal or natural persons acting as fiduciary and legal entities controlled by a member of the EC.

No loans or guarantees were granted to members of the EC in 2013.

LTIP share based grants to members of the EC during 2012 are summarized in the table below. The vesting date of the respective award is listed in the footnotes to the table.

Download XLS (18 kB)

Name

Reference number of shares under the performance component of the 2012 launch of the LTIP(1)(4)

Total estimated value of share-based grants under the performance component of the LTIP in 2012(2)

Number of retention shares granted under the 2012 launch of the LTIP(1)(3)

Total estimated value of share-based grants under the retention component of the LTIP in 2012(2)

Total number of shares granted under the 2012 launch of the LTIP(1)

Total estimated value of share-based grants under the LTIP in 2012(2)

 

 

(CHF)

 

(CHF)

 

(CHF)

(1)

Vesting date May 31, 2015.

(2)

The shares of the performance component are valued using the market value of the ABB share on the grant date and the Monte Carlo Simulation Model. The estimated value applied to the shares of the retention component, represents the market value of the ABB share on the grant date of the award.

(3)

The LTIP foresees to deliver 30 percent of the value of the vested retention shares in cash, but participants have the possibility to elect upon vesting to receive 100 percent of the vested award in shares.

(4)

The vested performance component under the plan, if any, will be fully settled in cash. The plan foresees a maximum payout of 200% of the number of reference shares, based on the weighted cumulative EPS performance against predefined objectives.

Joe Hogan

123,541

1,860,269

148,249

2,254,867

271,790

4,115,136

Michel Demaré

Gary Steel

20,781

312,919

35,377

538,084

56,158

851,003

Ulrich Spiesshofer

22,588

340,128

67,293

1,023,527

89,881

1,363,655

Diane de Saint Victor

20,652

310,976

38,673

588,217

59,325

899,193

Bernhard Jucker

24,524

369,280

45,924

698,504

70,448

1,067,784

Veli-Matti Reinikkala

19,878

299,321

37,223

566,162

57,101

865,483

Brice Koch

21,426

322,631

51,066

776,714

72,492

1,099,345

Tarak Mehta

18,845

283,767

35,289

536,745

54,134

820,512

Frank Duggan

18,845

283,767

35,289

536,745

54,134

820,512

Greg Scheu
(joined on May 1, 2012)

17,425

262,384

29,664

451,190

47,089

713,574

Prith Banerjee
(joined ABB on May 7, 2012)

18,071

272,112

30,763

467,905

48,834

740,017

Total Executive Committee members as of December 31, 2012

326,576

4,917,554

554,810

8,438,660

881,386

13,356,214

Share-based awards granted to members of the EC under the one-time AIEP during 2012 are summarized in the table below. The vesting date of the award is listed in the footnotes to the table.

Download XLS (18 kB)

Name

Number of conditionally granted shares under the one-time 2012 launch of AIEP(1)(3)

Total estimated value of share-based grants under the one-time AIEP in 2012(2)

 

(CHF)

 

(1)

Vesting date January 3, 2014.

(2)

The shares are valued using the market value of the ABB share on the grant date and the Monte Carlo Simulation Model.

(3)

The AIEP foresees to deliver 30 percent of the value of the vested shares in cash, but participants have the possibility to elect, prior to vesting, to receive 100 percent of the vested award in shares. The plan foresees a maximum payout of 768,286 shares, subject to the fulfillment of the plan objectives and the assessment by the CEO of the individual’s performance.

Joe Hogan

Michel Demaré

Gary Steel

66,795

896,656

Ulrich Spiesshofer

72,603

974,623

Diane de Saint Victor

66,380

891,085

Bernhard Jucker

78,827

1,058,174

Veli-Matti Reinikkala

63,891

857,673

Brice Koch

68,870

924,511

Tarak Mehta

60,572

813,119

Frank Duggan

62,232

835,403

Greg Scheu (joined on May 1, 2012)

56,008

751,851

Prith Banerjee (joined ABB on May 7, 2012)

29,042

389,860

Total Executive Committee members as of December 31, 2012

625,220

8,392,955