1. Responsibilities and authorities with respect to remuneration
1.1 Introductory remarks relating to the specific structure of BB Biotech AG as an investment company
The Board of Directors of BB Biotech AG has not made use of its competence to delegate the executive management of all or part of the Company’s business pursuant to article 716b CO and therefore manages the business of the Company itself, to the extent it has not been delegated to Bellevue Asset Management AG as investment manager and administrator within the framework of the management contract. Accordingly, BB Biotech AG does not have an executive management pursuant to article 716b CO or the Ordinance.
For details, please refer to note 7.
1.2 Responsibilities and authorities with respect to the remuneration
The Remuneration and Nomination Committee is responsible for ensuring that the process relating to the determination of the remuneration is held on a fair and transparent basis and that such process is controlled effectively. The adopted remuneration process shall serve as a basis for an adequate decision with respect to services rendered as well as an appropriate incentive to the individual members of the Board of Directors, taking into account the long-term interests of the shareholders and the Company’s success. In addition, the Remuneration and Nomination Committee assists the Board of Directors in determining the principles of the remuneration strategy of BB Biotech AG.
The Remuneration and Nomination Committee submits proposals to the Board of Directors for resolution in the following areas:
- Amount and composition of the aggregate remuneration of the Board of Directors;
- Amount and composition of the remuneration of the Chairman of the Board of Directors;
- Amount and composition of the remuneration of the Vice-Chairman as well as the other members of the Board of Directors;
- Amount and composition of the additional remuneration of the members of a Board of Directors Committee.
Furthermore, the Remuneration and Nomination Committee assists the Board of Directors in resolving on conclusion, termination, or amendment of contracts entered into with external asset managers and thus in particular on the amount of the compensation to be paid under the respective contracts.
The Remuneration and Nomination Committee meets as often as necessary but, in any event at least once a year. The meeting minutes are included in the board pack of the next meeting of the Board of Directors. The chairperson of the Remuneration and Nomination Committee reports to the Board of Directors at the next meeting.
BB Biotech AG mandated two reputable service providers to provide an external review of the Board of Directors’ compensation. Willis Towers Watson (WTW) and Mercer independently benchmarked the compensation of the Chairman, the Vice-Chairman and the ordinary members of the Board of Directors as well as the Board committees regarding level and structure against two pre-defined peer groups. One peer group consisted of 19 (Mercer) resp. 27 (WTW) distinct companies included in the SMIM Index. This group reflects the local market practices for Swiss listed companies, similar in size as BB Biotech AG. The second peer group consisted of 17 (Mercer) resp. 22 (WTW) listed financial industry companies with a similar structure (no bank and insurance companies, most of them included in the FTSE250 index) This group of listed investment trusts and investment companies reflects the structural specialities of BB Biotech AG.
Based on the results of the benchmarking studies and in line with the recommendation of the Remuneration and Nomination Committee, the Board of Directors decided to propose an adjusted overall amount to the General Meeting in March 2022.
In line with the results of the benchmarking studies, the Board of Directors decided to decrease the amount of compensation awarded for Board membership and increase the amount of compensation awarded for membership and, in particular, chairmanship of a Board committee.
During the period under review, no external advisors were consulted on the determination of the compensation program.