Forbo Announces Performance-Related CEO Compensati
Eglisau, Switzerland, April 11, 2006 – The Board of Directors of Forbo Holding AG and CEO This E. Schneider have defined a salary model in an employment contract whose core elements have been negotiated since summer 2005 and which is based on a full assumption of business risk by the CEO.
The Board of Directors of Forbo Holding AG, is taking the fact that Schneider's equity stake has gone above the 5 % threshold, as reported by Forbo Holding, as an opportunity to provide clear and transparent information about the CEO's current compensation model.
The following agreement has been reached in 2005 for the employment period to the end of December, 2010. In addition to the current insurance benefits paid by the employer, Schneider receives a cash payment of CHF 150,000 per year, which is used to settle his employee contributions to insurances. In compensation for all other cash payments and other remunerations ( bonuses, inflation, adjustments, options etc.), Mr. Schneider shall receive a total of 47,395 Forbo shares. At the time of contract signing, this share-package has an equivalent tax value of CHF 1.9 million per year.
The shares are blocked for five years; they cannot be sold until January 1, 2011 at the earliest. If Schneider leaves the company, the relevant proportion of these shares must be returned. In addition, at the end of the blocking period, Schneider waives the right to the existing severance settlement of 18 months' pay.
Together with the Forbo shares that he has already purchased, Schneider is now sharing a substantial part of Forbo's business risk. This compensation model is designed to encourage long-term sustainable corporate development, and is therefore very much in the interests of the company and its shareholders.
"We appreciate the commitment of our CEO and delegate, whose personal investment confirms his dedication to the company. The recent turnaround reflects the great success of our work together so far, and so we are pleased that This E. Schneider has accepted our proposal. His share-based remuneration, blocked for the next five years, means that he is taking a full share in our business risk, reflecting his commitment to the future success of our company. His financial involvement underlines the fact that he is prepared to bear the consequences of his actions," said chairman of the board of directors Dr. Albert Gnaegi, explaining the thinking behind the compensation model agreed by the board.
