Remuneration report

The following Remuneration Report describes the principles of the remuneration policy at Zurich Airport Ltd. as well as the associated decision-making powers and the components of remuneration.

1. Remuneration policy at Zurich Airport Ltd.

1. Foundations and principles

Overview of decision-making powers

Further information concerning the competence of the Nomination & Compensation Committee is contained in the Internal organisation section.

The remuneration philosophy of Zurich Airport Ltd. is geared to a corporate strategy oriented toward sustainable success. Market-based, performance-oriented remuneration creates the conditions for recruiting and retaining qualified, committed employees in a competitive labour market. The remuneration system is simply structured, clear and transparent. The pension contribution system for the Management Board is essentially the same as for other salaried employees based at the Zurich site. The difference is that contributions to the pension fund for the variable salary component of Management Board members are paid in full by the employer. Further information on the regulation of pension planning can be found in the Responsible employer section. No severance payments are made to the Board of Directors or to the Management Board, and there are no rules pertaining to the clawback of compensation in certain circumstances.

2. Components and methods of determination

For the remuneration of members of the Board of Directors

In order to ensure the independence of the active members of the Board of Directors in the performance of their supervisory duties, their remuneration consists of an annual fixed lump sum. The members of the Board of Directors receive no performance-related remuneration. Annual lump-sum payments are made in respect of their work on the Board of Directors and its committees (which it may form as and when required). The annual lump-sum payments do not include the costs of any social security contributions payable by the employer. These are reported separately and added to the total fees payable by the company. Attendance allowances are paid for extraordinary, non-planned meetings of the Board of Directors and equal CHF 1,500 per meeting and attending member of the Board of Directors. The number of meetings of the Board of Directors and the number of committees are determined based on business requirements. The total amount to be proposed to the Annual General Meeting for prospective remuneration is designed to also cover financial years in which the Board of Directors faces exceptional situations.

The previous remuneration system was revised in 2023 with the assistance of PwC (PricewaterhouseCoopers AG) as an external consultancy. PwC is not the company’s external auditor. The new remuneration system was applied in the reporting period for the first time. The remuneration system and the amount of remuneration were revised on the basis of a group of comparable companies listed in Switzerland and aligned more closely to standard market conditions. This means that the Board of Directors is offered remuneration according to attractive conditions in line with the market.

As Zurich Airport Ltd. is part of the SMIM® stock index (SMI Mid), companies on this index were used as benchmarks. The benchmarked companies included ones with a similar level of market capitalisation, revenue and employees, but excluded ones from the financial sector for example. The benchmark group for the remuneration model therefore comprises the following companies:

The flat rates used are based on the median remuneration in the benchmark group. As the attendance of the Chairman of the Board as a guest of some committees without voting rights is in their capacity as chair of the board, it is not additionally remunerated. The flat-rate fees reflect the working time and the necessary risk management associated with the various committees and individual functions, also with reference to market rates.

The remuneration model differentiates according to the role of the particular member on the Board of Directors (chair, vice chair, member) and their function on the committees (chair, member), with the additional workload of chairpersons being duly recognised. As before, no flat-rate expenses are paid. Remuneration is paid solely in cash, not in the form of shares as the latter form of compensation is not suitable for representatives of the canton and the city of Zurich and the fee model is intended to apply to all board members. See the section on Board of Directors for further information on the representatives of the canton.

The fee model for the Board of Directors provides for the following annual lump sums with effect from the 2024 Annual General Meeting:

An overview of the number of meetings of the Board of Directors and the committees during the reporting year can be found in the section Organisation and participants. The Nomination & Compensation Committee will annually review the fee model to verify that the chosen criteria continue to be appropriate and are adequately reflected.

For the remuneration of members of the Management Board

Remuneration of members of the Management Board is based on individual employment contracts and comprises a fixed component (fixed salary and benefits) and a variable performance-related component plus employer contributions to social security and pension funds. Two thirds of the variable remuneration is paid out in cash and one third in shares. The shares are blocked for a period of four years, which ensures that the incentives include an element oriented to long-term perspectives.

The fixed salary component is measured in accordance with the company’s remuneration policy. This remuneration is set each year by the Board of Directors acting on a proposal by the Nomination & Compensation Committee. The CEO submits a proposal to the Nomination & Compensation Committee concerning the amounts of the respective fixed salary components of the other members of the Management Board. The members of the Management Board do not have any say in these resolutions.

In the reporting period, the variable component was measured for a final time in accordance with the previous bonus scheme based on the extent to which targets for the company’s success set by the Board of Directors for the respective financial year had been achieved. EBIT according to financial planning (excluding the influence of aircraft noise) has been adopted as the target. The target bonus proposed for 100% achievement of the target amounts to 100% of the fixed salary for the CEO and 50% of the fixed salary for the other members of the Management Board. If the target is exceeded, variable remuneration is limited to 150% of the target bonus. In the event that achievement falls below 70% of the target, there is no entitlement to variable remuneration. In accordance with the Articles of Association and the regulatory provisions, the Board of Directors can use its discretion to adjust the variable remuneration in justified exceptional cases, while bearing the upper limit of 150% of the target bonus in mind.

Ratio of variable remuneration to basic remuneration

3. Approval by the Annual General Meeting

Each year, the Annual General Meeting holds a binding vote on the aggregate amount of remuneration for the Board of Directors and the Management Board. On the basis of Article 30 of the company’s Articles of Association, this vote is held prospectively, that is, the maximum aggregate amounts that could be paid to the members of the Board of Directors and the Management Board during the following reporting period are submitted to the Annual General Meeting for approval.

In accordance with Article 30 para. 2 of the Articles of Association, an additional sum of 30% of the approved aggregate amount is available as necessary for the remuneration of any subsequently nominated members of the Management Board (per additional member); this sum does not require the approval of the Annual General Meeting.

As the amounts actually to be paid out depend in part on factors not yet known when these amounts are approved (the committees and extraordinary meetings in the case of remuneration of the Board of Directors, the achievement of the financial targets and the qualitative targets in the case of remuneration of the Management Board), this prospective method of approval requires the use of theoretical maximum amounts by the Annual General Meeting as a basis for their approval decisions. The remuneration actually paid out for a specific reporting period will be stated the following year in the Remuneration Report, which will be presented to the Annual General Meeting for approval on a consultative basis.

Overview of the remuneration paid in 2024 and the approved totals