4 Compensation framework for the Board of Directors

4.1 Remuneration approach

Pursuant to art. 25 of the Articles of Association, the compensation of the members of the Board of Directors (including the Chair) is determined by the entire Board of Directors based on the proposal of the Remuneration and Nomination Committee and subject to and within the limits of the aggregate maximum amounts approved by the general meeting. According to section 4(b) of the Organizational Regulations, the Chair is required to abstain from the deliberation and decision-making about their own compensation. The compensation consists of fixed compensation elements and may comprise variable compensation elements. The fixed compensation includes a fixed base fee and fixed fees for chair positions and memberships in Board committees or for roles of the Board of Directors as well as potentially a lump sum compensation for expenses (if applicable), which are determined by the full Board of Directors based on the proposal of the Remuneration and Nomination Committee, subject to and within the limits of the aggregate maximum amounts approved by the general meeting.

Any variable compensation comprises performance-related compensation elements and financial instruments (e.g., performance stock units (PSU)) and depends on the achievement of strategic and / or financial targets set in advance by the Board of Directors over the course of a performance period defined by the Board of Directors. The compensation is awarded in cash, in the form of shares in the Company and other benefits. Where the compensation is paid in whole or in part in shares or financial instruments, the Board of Directors determines the grant conditions as well as any restriction periods and forfeit conditions.

Currently, members of the Board of Directors only receive fixed compensation elements, of which at least half are payable in shares and the remainder in cash. Board members have the option of electing to be paid up to 100% of their fixed fee in shares. For Board members electing to receive more than 50% of their fixed fee in shares, the shares exceeding the 50% portion will be granted at a discount of 20% to market price.9 All shares received as part of the Board’s remuneration are subject to a three-year blocking period from the date of grant. We believe that the share-based component strengthens the alignment of the Board of Directors’ interests with those of our shareholders as well as further incentivizes the members of the Board of Directors to drive PolyPeptide’s success. During the period under review, there were no payments to pension funds or similar institutions for the members of the Board of Directors.

9 The market price is the volume-weighted average share price over the last five trading days prior to the quarterly payment date.

Below is an overview of the current remuneration framework for the Board of Directors.

Table 4:
Remuneration framework for the Board of Directors (in CHF)

1 Board members have the option of electing on an annual basis to be paid up to 100% of their fixed fee in shares. For Board members electing to receive more than 50% of their fixed fee in shares, the shares exceeding the 50% portion will be granted at a discount of 20% to market price (calculated based on the volume-weighted average share price over the last five trading days prior to the quarterly payment date).

The cash and share compensation are paid out on a quarterly basis. The number of shares is determined by dividing each Board member’s respective share-based compensation by the volume-weighted average closing share price over the last five trading days prior to the quarterly payment date (and with a discount of 20% on the shares exceeding 50% of the fixed fee, if applicable) and rounded up to the next whole number of shares. Any shares delivered to Board members in connection with their compensation are / will be blocked for a period of three years from the date of grant. In 2024, the allocated shares were sourced from the Company’s treasury shares.

If a Board member resigns before completion of the respective term of office (i.e., mid-term), such member is entitled to the respective pro-rata compensation earned up to and including the resignation date, and any compensation already received in excess of the pro-rata entitlement is to be transferred back to the Company.

Pursuant to art. 27 of the Articles of Association, expenses that are not covered by the lump sum compensation for expenses (if applicable) pursuant to PolyPeptide’s expense regulations are reimbursed against presentation of the relevant receipts. Amounts paid for expenses actually incurred do not need to be approved by the general meeting.

4.2 Compensation of the Board of Directors

The structure and remuneration components of the members of the Board of Directors has not changed in 2024 compared to 2023. However, the total compensation of the Board of Directors decreased by 22.6% for the year ended 31 December 2024 as compared to 31 December 2023 due to (i) the reduced size of the Board of Directors following AGM 2024, (ii) the fixed executive chair fee awarded to Peter Wilden for the period 1 February 2023 to 30 September 2023 and (iii) the appointment of Erik Schropp as chair of the Audit and Risk Committee (“ARC”)2.

The following tables show the compensation of the Board of Directors for the period from 1 January 2024 to 31 December 2024 (Table 5) and from 1 January 2023 to 31 December 2023 (Table 6). In each of these periods, the Board did not receive a lump sum for expenses; rather, any expenses incurred were reimbursed against the presentation of the relevant receipts.

Table 5:
2024 Compensation of the Board of Directors (1 January 2024–31 December 2024)

CHF

Position

Cash compensation

Share-based compensation 1

Total (cash and shares)

Social security contributions

Total compensation

 

 

 

 

 

 

 

Peter Wilden

Chair

75,000

243,817

318,817

18,225

337,042

Patrick Aebischer

Vice-Chair, Lead Independent Director, ITC Chair

50,000

162,555

212,555

11,762

224,317

Erik Schropp 2

Member, ARC Chair

Jane Salik

Independent Member

70,000

70,038

140,038

140,038

Beat In-Albon 3

Independent Member

37,500

122,572

160,072

8,569

168,640

Philippe Weber 4

Independent Member, RNC Chair

18,000

180,042

198,042

13,356

211,398

Dorothee A. Deuring 5

Independent Member

17,500

18,907

36,407

2,681

39,088

Total Board of Directors

268,000

797,930

1,065,930

54,593

1,120,523

1 The number of shares due quarterly for each Director is determined by dividing each Board member’s respective share-based compensation by the volume-weighted average share price over the last five trading days prior to the quarterly grant date and rounded up to the next whole number of shares. For Board members electing to receive more than 50% of their fixed fee in shares, the shares exceeding the 50% portion are granted at a discount of 20% to the volume-weighted average share price over the last five trading days prior to the quarterly grant date. The table reflects the fair value at grant date of the shares. For information regarding the accounting treatment of such share-based payments under IFRS, see note 4 “Share-based payment” of the consolidated financial statements in the Financial Report 2024.
2 Erik Schropp, as representative of Draupnir Holding B.V. (one of the Company’s significant shareholders, see section 1.2 “Significant shareholders” of the Corporate Governance Report 2024), waived all compensation for his Board duties for the term of office from the AGM 2024 to AGM 2025, including for his role as chair of the ARC as of 11 April 2024.
3 Beat In-Albon stepped down as Chair of the ARC as of 11 April 2024.
4 Philippe Weber is a Partner at Niederer Kraft Frey AG (NKF). For the year ended 31 December 2024, the Group paid CHF 35,539 to NKF for legal services in relation to ongoing corporate legal matters (e.g., securities, employment, tax, bank finance and corporate law matters), of which CHF 3,710 was directly attributable to legal services provided by Philippe Weber.
5 Dorothee A. Deuring was elected as a member of the Board of Directors at the AGM 2023 on 12 April 2023 and decided not to stand for re-election at the AGM 2024 on 10 April 2024.

Table 6:
2023 Compensation of the Board of Directors (1 January 2023–31 December 2023)

CHF

Position

Cash compensation

Share-based compensation 1

Total (cash and shares)

Social security contributions

Total compensation

 

 

 

 

 

 

 

Peter Wilden

Chair

71,250

249,643

320,894

20,165

341,059

 

Executive Chair 2

200,000

200,000

14,356

214,356 2

Patrick Aebischer

Vice-Chair, Lead Independent Director, ITC Chair

50,000

163,263

213,263

11,803

225,067

Erik Schropp 3

Member

Jane Salik

Member

70,000

70,354

140,354

140,354

Beat In-Albon

Independent Member, ARC Chair

45,000

146,946

191,946

10,507

202,453

Philippe Weber 4

Independent Member, RNC Chair

18,500

180,232

198,732

13,402

212,135

Dorothee A. Deuring 5

Independent Member

52,500

52,621

105,121

7,765

112,886

Total Board of Directors

507,250

863,060

1,370,310

78,002

1,448,313

1 The number of shares due quarterly for each Director is determined by dividing each Board member’s respective share-based compensation by the volume-weighted average share price over the last five trading days prior to the quarterly grant date and rounded up to the next whole number of shares. For Board members electing to receive more than 50% of their fixed fee in shares, the shares exceeding the 50% portion are granted at a discount of 20% to the volume-weighted average share price over the last five trading days prior to the quarterly grant date. The table reflects the fair value at grant date of the shares. For information regarding the accounting treatment of such share-based payments under IFRS, see note 4 “Share-based payment” of the consolidated financial statements in the Financial Report 2023.
2 The amount reflects the fixed executive chair fee of CHF 25,000 per month awarded to Dr. Peter Wilden in his role as Executive Chair (as announced on 30 January 2023) for the period 1 February 2023 to 30 September 2023. For the year ended 31 December 2023, Dr. Peter Wilden received in aggregate total compensation of CHF 555,415.
3 Erik Schropp, as representative of Draupnir Holding B.V. (one of the Company’s significant shareholders, see section 1.2 “Significant shareholders” of the Corporate Governance Report 2023), waived all compensation for his Board duties for the term of office from the AGM 2023 to AGM 2024.
4 Philippe Weber is a Partner at Niederer Kraft Frey AG (NKF). For the year ended 31 December 2023, the Group paid CHF 185,892 to NKF for legal services in relation to ongoing corporate legal matters (e.g., securities, employment, tax, bank finance and corporate law matters), of which CHF 6,720 was directly attributable to legal services provided by Philippe Weber. In addition, NKF provided legal assistance in connection with the signing of a revolving credit facility agreement (as announced by the Company on 2 October 2023). The revolving credit facility agreement enabled the Company to refinance its then existing borrowings as well as to continue to finance its working capital and capital expenditure requirements to support its planned business growth.
5 Dorothee A. Deuring was elected as a member of the Board of Directors at the AGM 2023 on 12 April 2023.

Reconciliation of compensation to shareholder resolutions

For the term to the AGM 2025, the AGM 2024 approved a maximum aggregate amount of fixed compensation for the Board of Directors of CHF 1,600,000 (including all employee and employer social security contributions). For the term to the AGM 2024, the AGM 2023 approved a maximum aggregate amount of fixed compensation for the Board of Directors of CHF 1,600,000 (including all employee and employer social security contributions).

Table 7 shows the reconciliation between the compensation that has been / will be paid / granted for the respective term of office and the maximum aggregate amount approved by the general meeting:

Table 7:
Compensation approved and compensation paid / to be paid / granted for the members of the Board of Directors

 

Total compensation granted

Maximum aggregate amount available

Status

 

 

 

 

AGM 2023 to AGM 2024

CHF 1,446,700 1

CHF 1,600,000

Approved AGM 2023

AGM 2024 to AGM 2025

CHF 1,051,939 2

CHF 1,600,000

Approved AGM 2024

1 The amount includes the fixed executive chair fee of CHF 25,000 per month awarded to Dr. Peter Wilden in his role as Executive Chair for the period 1 February 2023 to 30 September 2023.
2 The amount represents an estimate for the term of office from AGM 2024 to AGM 2025. The amount is calculated as an estimate for the six members of the Board of Directors elected at the AGM 2024, of which one member (Erik Schropp) waived his compensation for his Board duties for the current term of office. The final amount of total compensation granted will be disclosed in the Remuneration Report 2025.

4.3 Loans, credits and related-party compensation

In accordance with art. 28 of the Articles of Association, no loans or credits were directly or indirectly granted or outstanding as at 31 December 2024 or 31 December 2023, respectively, to current members of the Board of Directors. In addition, no loans or credits were directly or indirectly granted or outstanding as at 31 December 2024 or 31 December 2023, respectively, to former members of the Board of Directors.

For the years ended 31 December 2024 and 31 December 2023, respectively, no compensation was directly or indirectly paid or granted to persons closely associated with current or former members of the Board of Directors. In addition, no loans or credits were directly or indirectly granted or outstanding as at 31 December 2024 or 31 December 2023, respectively, to persons closely associated with current or former members of Board of Directors.

For the related party transactions, refer to note 22 “Related parties” of the consolidated financial statements in the Financial Report 2024.