Orascom Development Holding AG

Transcription

1 Orascom Development Holding AG Compensation Report Full Year 2014

2 ORASCOM DEVELOPMENT HOLDING AG, ALTDORF Compensation Report for the year ended December 31, 2014 in Accordance with the Ordinance against Excessive Compensation in Stock Exchange Listed Companies (Ordinance) and Report of the Statutory Auditor

3 Deloitte AG General-Guisan-Quai 38 PO Box Zurich Switzerland Phone: +41 (0) Fax +41 (0) Report of the Statutory Auditor To the General Meeting of ORASCOM DEVELOPMENT HOLDING AG, ALTDORF We have audited section 5 of the accompanying Compensation Report of Orascom Development Holding AG for the year ended December 31, Responsibility of the Board of Directors The Board of Directors is responsible for the preparation and overall fair presentation of the Compensation Report in accordance with Swiss law and the Ordinance Against Excessive Compensation in Stock Exchange Listed Companies (Ordinance). The Board of Directors is also responsible for designing the compensation system and defining individual remuneration packages. Auditor's Responsibility Our responsibility is to express an opinion on the accompanying Compensation Report. We conducted our audit in accordance with Swiss Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Compensation Report complies with Swiss law and Articles of the Ordinance. An audit involves performing procedures to obtain audit evidence on the disclosures made in the Compensation Report with regard to compensation, loans and credits in accordance with Articles of the Ordinance. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatements in the Compensation Report, whether due to fraud or error. An audit also includes evaluating the reasonableness of the methods applied to value components of compensation, as well as assessing the overall presentation of the Compensation Report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

4 ORASCOM DEVELOPMENT HOLDING AG, ALTDORF Compensation Report for the year ended December 31, 2014 in Accordance with the Ordinance against Excessive Compensation in Stock Exchange Listed Companies (Ordinance) and Report of the Statutory Auditor Opinion In our opinion, section 5 of the Compensation Report for the year ended December 31, 2014 of Orascom Development Holding AG complies with Swiss law and Articles of the Ordinance. Deloitte AG Roland Müller Licensed audit expert Auditor in charge Adrian Käppeli Licensed audit expert Zurich, April 14, 2015 ROM/AKA/jva Enclosures - Compensation Report 2014

5 COMPENSATION REPORT 1 INTRODUCTION The Compensation Report provides comprehensive information about the remuneration principles and programs applicable to the Board of Directors and the Group Executive Management. It also describes the governance of the determination of remuneration and provides details of remuneration related to the financial year ended 31 December The report meets today s corporate governance standards and is written in accordance with Art. 663b and 663c of the Swiss Code of Obligations, the principles of the Swiss Code of Best Practice issued by economiesuisse and the Corporate Governance Directive of the SIX Swiss Exchange. 2 COMPENSATION POLICY AND PRINCIPLES The compensation policy and principles of the Group are designed to support a performance culture which fosters teamwork and collaboration. Furthermore, it aims to promote effective risk management practices. The compensation policy takes into account the long-term performance of the Group and balances the fixed and variable compensation components to reflect the value and responsibility of the roles that the Board of Directors and the Group Executive Management perform. The aim of the compensation policy includes attracting and retaining employees, and motivating employees to achieve results with integrity and fairness. The objectives of the compensation policy are framed to achieve an appropriate balance between the interests of employees and shareholders in order to create sustainable value for the Group. The compensation policy applies to all members of Executive Management. It contains a detailed description of the Group s compensation principles and objectives as well as the compensation programs. The compensation policy is reviewed regularly and endorsed by the independent Nomination & Compensation Committee. The compensation policy, as well as periodic updates and revisions, are approved by the Board. 3 COMPENSATION GOVERNANCE 3.1 Nomination & Compensation Committee The Nomination & Compensation Committee consists of two non-executive members of the Board of Directors as determined by the Board. The current members are Marco Sieber (chairman) and Franz Egle (member). The mission of the Nomination & Compensation Committee is to assist the Board of Directors in the discharge of its responsibilities and to discharge responsibilities of the Board relating to compensation and nomination of members of the Board of Directors and of the Executive Management. In November 2013, the Swiss Federal Council approved the Compensation Ordinance ( VegüV ), which came into effect on January 1, In accordance with the Compensation Ordinance and the modified Articles of Association, beginning with the 2015 AGM, the shareholders will vote to approve the compensation of the Board and of the Executive Management based on the proposals set forth by the Board. 3.2 Approval and authority levels The Nomination & Compensation Committee has decision-making power regarding all matters of the compensation of executive members of the Board of Directors and of members of the Executive Management. For the nomination of Board members and of members of the Executive Management, and for other topics submitted to the Nomination & Compensation Committee by the Board for the Nomination & Compensation Committee s consideration, it issues recommendations to the Board of Directors without having decision-making power. 4 ARCHITECTURE OF COMPENSATION 4.1 Compensation of the Board of Directors For the compensation of members of the Board of Directors for their service on the Board and its committees, the Board of Directors decided in 2013 at its discretion to reduce the compensation of the members of the Board of Directors from CHF

6 for all members (except for the Lead Director who received a compensation of CHF ) to CHF for all members of the Board of Directors (net, corresponds to between CHF and CHF 136'467 gross). Additionally, it was also decided that the compensation shall be paid out half in cash and half in the form of of the Company. This compensation principle was also applied for The of the Company allocated to the members of the Board of Directors as compensation are, for that purpose and if not available to the Company already, purchased by the Company on the market and their valuation (for purposes of the calculation of the number of allocated to each member of the Board of Directors) is based on the average share price of the ODH share (ODHN) at Zurich Stock Exchange during the last six months (closing prices of all trading days during the last six months). With regard to the compensation for the services of the members of the Board of Directors for 2015, the Board of Directors decided in 2014 to further reduce the gross compensation of the members of the Board of Directors to gross CHF for all members. It was decided that the compensation shall continue to be paid out continuously half in cash and half in the form of of the Company. In addition to the base compensation for all members of the Board of Directors, members (and leaders) of one of the Committees shall receive for 2015 an additional compensation of gross CHF The Lead Director shall receive an additional compensation of gross CHF Such additional compensations will be fully paid in. 4.2 Compensation of Group Executive Management Compensation of the members of Executive Management for their service in Executive Management consists of a base salary which is annually reviewed, and a bonus payment which is annually determined, as further described below. The initial base salaries of the members of Executive Management were in the past either (in case of members who have served in that capacity since the Company was formed in 2008) carried over from their previous employment with Orascom Hotels & Development S.A.E. or (in case of members appointed at a later time) they were determined in a discretionary decision of the CEO together with the Nomination & Compensation Committee. The compensation of the members of Executive Management is based on an evaluation of the individual performance of each member, as well as of the performance of the business area for which each member is responsible. The Nomination & Compensation Committee discusses the proposals presented by the CEO, approves them if deemed fit, and subsequently informs the Board of Directors of its decisions. Members of Executive Management do not have a right to attend meetings of the Nomination & Compensation Committee at which decisions are taken in respect to their compensation, or otherwise to participate in the decision process. 4.3 Performance related remuneration In late 2010, the Board of Directors approved a formal bonus policy for the Executive Management. In mid 2014, the Board of Directors revised the existing bonus policy and approved an updated bonus policy ( Policy ) for the Executive Management. The new Policy includes a cash-bonus and a deferred share-bonus. 100 % of the cash-bonus and 40 % of the share-bonus are based on the Executive Member s Management s personal performance. 60 % of the share-bonus is based on the (financial) performance of the Group. The cash-bonus can reach at maximum 25 % of the Executive Member s annual gross base salary. The share-bonus can reach at maximum 100 % of the Executive Member s annual gross base salary. The share price that is relevant to determine the number of ODH to be granted to the member of the Executive Management is the average share price of the ODH share (ODHN) at Zurich Stock Exchange during the last six months of the performance year (closing prices of all trading days between July 1 and December 31). As the financial performance targets were not achieved in 2013 and due to the challenging market environment, especially the political situation in Egypt, the Nomination & Compensation Committee recommendation to the Board of Directors that no bonus shall be paid to the Executive Management in The Board of Directors approved this recommendation for 2013 which was accepted by the Members of the Executive Management. For 2014, the Bonus entitlements (cash- and share-bonus) for each member of the Executive Management are still to be assessed according to the new Policy and the actual performance of the members of the Executive Management and of the Group. 4.4 Benefits Besides the compensation as set out in Sec. 4.2 and 4.3 above, the members of the Executive Management do not participate in any other retirement or pension fund plans provided by the Group. The members of the Executive Management are responsible themselves for all insurances and old-age provisions. 4.5 Employment terms and conditions All members of the Group Executive Management have employment contracts with notice periods of a maximum six months. Members of the Group Executive Management are not entitled to a severance payment.

7 5 COMPENSATION OF KEY MANAGEMENT PERSONNEL: REMUNERATION AND SHARE OWNERSHIP 5.1 Board of Directors Compensation for 2014 CHF (gross amounts) BOARD OF DIRECTORS of salaries and fees of cash bonuses Unrestricted Other benefits (car, insurance) Pension contributions Samih Sawiris Chairman 68,248-68, Franz Egle Member 68,234-68, Adil Douiri Member 66,147-66, Carolina Müller-Möhl Member 68,234-68, Gabriel Pérès 1 Member Eskandar Tooma 5 Member 66,147-66, Marco Sieber Member 68,234-68, ,466 Jürgen Fischer 2 Member 68,234-68, ,466 Jürg Weber 2 Member 68,234-68, ,466 TOTAL COMPENSATION 541, , ,083,331 1 As of the Annual General Assembly of 12 May 2014, Mr. Pérès decided not to stand for re-election 2 Jürgen Fischer and Jürg Weber were elected on 12 May 2014 Compensation for 2013 CHF (gross amounts) BOARD OF DIRECTORS of salaries and fees of cash bonuses Total remuneration Unrestricted Other benefits (car, insurance) Pension contributions Total remuneration Samih Sawiris Chairman , ,471 Franz Egle Member , ,477 Adil Douiri Member , ,285 Luciano Gabriel 1, 2 Member Carolina Müller-Möhl Member , ,477 Jean-Gabriel Pérès Member , ,477 Nicolas Cournoyer 3 Member ,278 68,278 Eskandar Tooma 4 Member , ,285 Marco Sieber 4 Member , ,477 TOTAL COMPENSATION - - 1,015, ,015,227 1 acting as Lead Director until May until May until September since May 2013 No loans or credits were granted to members of the Board of Directors or parties closely linked to them during 2014 and 2013.

8 As at 31 December 2014 and 2013 the members of the Board of Directors held the following : BOARD OF DIRECTORS ODH OHD ODH OHD Samih Sawiris 1 Chairman 17,921, ,914,355 5 Franz Egle Member 37,106-28,572 - Adil Douiri Member 23'359-15,735 - Carolina Müller-Möhl Member 28,006-19,472 - Jean-Gabriel Pérès 2 Member ,166 - Eskandar Tooma 3 Member 43,000-7,624 - Marco Sieber 3 Member 17,334-8,800 - Jürgen Fischer 4 Member Jürg Weber 4 Member TOTAL HOLDING OF SHARES 18,069, ,600, Total includes direct and indirect holding ownership As of the Annual General Assembly of 12 May 2014, Mr. Pérès decided not to stand for re-election As at 15 May 2013 Eskandar Tooma and Marco Sieber were elected as new members of Board of Directors Jürgen Fischer and Jürg Weber were elected as members of the Board of Directors on May 12, 2014 No loans or credits were granted to members of the Board of Directors or parties closely linked to them during 2014 and Executive Management Compensation in 2014 CHF EXECUTIVE MANAGEMENT of salaries and fees of cash bonuses Unrestricted Other benefits (car, insurance) Pension contributions Gerhard Niesslein 1 1' '014'473 Total other members of Executive Management 2'045' '000-88'000 85'626 2'525'745 TOTAL COMPENSATION 3'971' '930-96' '060 4'540'218 1 Highest compensated member of the Executive Management. Gerhard Niesslein (CEO) left the Company as of 28 February The compensation paid in 2014 which was agreed upon between Gerhard Niesslein and the Company was based on his fixed term employment contract which included a minimum notice period of two years. The employment contract with Gerhard Niesslein was concluded on 3 June 2011, before the Compensation Ordinance (VegüV) was brought into force as of 1 January Compensation in 2013 CHF EXECUTIVE MANAGEMENT of salaries and fees of cash bonuses Total remuneration Unrestricted Other benefits (car, insurance) Pension contributions Total remuneration Gerhard Niesslein 1 1,240, , ,823 1,407,831 Total other members of Executive Management 3,881, , ,073 4,275,618 TOTAL COMPENSATION 5,121, , ,896 5,683,449 1 Highest compensated member of the Executive Management. No loans or credits were granted to members of the Executive Management or parties closely linked to them during 2014 and 2013.

9 As at 31 December 2014 and 2013 the members of the Executive Management held the following : EXECUTIVE MANAGEMENT ODH OHD ODH OHD Gerhard Niesslein 2 CEO Samih Sawiris 1, 2 CEO 17,921, ,914,355 5 Ahmed El Shamy 3 CFO Eskandar Tooma 1, 3 CFO 43' Mahmoud Zuaiter 4 CEO Hotel ,750 - Abdelhamid Abouyoussef 4 Chief Hotels Officer 40' Julien Renaud-Perret 5 Chief Development Officer - - 6,000 - Raymond Cron 6 Chief Operating Officer Aly Elhitamy 7 Chief Construction Officer Dalia El Gezery 8 Chief Human Resources Officer TOTAL EXECUTIVE MANAGEMENT 18,004,069 17,937, The holding of of Samih Sawiris (CEO since 1 March 2014) and Eskandar Tooma (CFO since 1 September 2013) are shown within the Board of Directors table in paragraph 5.1 of this report. As at 28 February 2014 Gerhard Niesslein has left the Group. Samih Sawiris has been appointed as Group CEO. As at 31 August 2013 Ahmed El Shamy has left the Group. Eskandar Tooma has been appointed as Group CFO. As at 1 March 2014 Mahmoud Zuaiter has resigned from Executive Management as he has been appointed Managing Director of Jordan Projects for Tourism Development (JPTD); an associate of the Group. Abdelhamid Abouyoussef has been appointed as CHO (Chief Hotels Officer) As at 15 April 2014 Julien Renaud-Perret resigned from the Executive Management. As at 30 June 2013 Raymond Cron has left the Group. As at 15 April 2014 Aly Elhitamy resigned from Executive Management. As at 1 September 2014 Dalia El Gezery has been appointed as Chief Human Resources Officer. No loans or credits were granted to members of the Executive Management or parties closely linked to them during 2014 and 2013.

10 Orascom Development Holding AG Gotthardstrasse 12 CH-6404 Altdorf Tel: +41 (0) Fax: +41 (0)