Annual Report 2011

Adecco S.A. (Holding Company) –
Notes to financial statements
in millions, except share and per share information and compensation table data

Note 7 – Compensation, shareholdings, and loans

Compensation and shareholding of members of the Board of Directors and the Executive Committee

The amounts indicated in this paragraph include honorariums (fees), salaries, loans, bonuses, and compensation in kind (according to market value at time of conferral). The members of the Board of Directors are compensated in cash. The Chairman is partially compensated with Adecco S.A. shares. The amount conferred to the members of the Board of Directors for the fiscal year 2011 amounted to CHF 5.0. The total of all compensation conferred for the fiscal year 2011 to all members of the Executive Committee, including bonus payments for 2011 due in 2012, and awards granted in 2011 under the LTIP, at grant date fair value, amounted to CHF 26.0. Not included are bonus payments due for 2010 but made during 2011 as this information was disclosed in 2010.

Further information on the compensation of the Board of Directors and the Executive Committee of the Adecco Group can be found in the Remuneration Report.

Individual compensation and shareholding for 2011 and 2010 are presented in the following tables:

Board of Directors' compensation and shareholding

For the year 2011

Social
contributions [1]

in CHF (except shares)

Office/
compensation
period in 2011

Net
compensation
for term served


Old age insurance/
pensions and others

Shareholding as
of December 31,
2011 [2]

 

Name and function

Rolf Dörig, Chairman

since Jan. 2011

1,800,000 [3]

237,123

35,000

 

Thomas O'Neill, Vice-Chairman

since Jan. 2011

427,690

53,061

6,000

 

Jakob Baer

since Jan. 2011

320,984

39,282

5,101

 

Alexander Gut

since Jan. 2011

377,069

53,656

11,940

 

Andreas Jacobs

since Jan. 2011

450,000

714,915 [4]

 

Didier Lamouche

since Apr. 2011

211,781

30,823

 

Francis Mer

until Apr. 2011

107,571

11,722

n.a.

 

David Prince

since Jan. 2011

290,002

9,998

5,539

 

Wanda Rapaczynski

since Jan. 2011

400,000

7,700

 

Judith A. Sprieser

until Apr. 2011

100,000

100,000

n.a.

 

Subtotal

4,485,097

535,665

 

Total

5,020,762

786,195

[1]Including Directors' and Company's social contributions.

[2]Indicating the number of registered shares held, with a par value of CHF 1 each. The members of the Board of Directors and the Executive Committee are required to disclose to the Company direct or indirect purchases and sales of equity related securities of Adecco S.A.

[3]CHF 300,000 of the total net compensation was paid with Adecco S.A. shares.

[4]Refer to Corporate Governance Report, section 1.2 "Significant shareholders" and Note 5 regarding shares held by a group of which Andreas Jacobs is a member. One or more members of this same group, considered as related party/parties to Andreas Jacobs, as of December 31, 2011, held equity related securities of Adecco S.A. according to notified managemet transactions.


For the year 2010

Social
contributions [1]

in CHF (except shares)

Office/
compensation
period in 2010

Net
compensation for
term served


Old age insurance/
pensions and others

Shareholding as
of December 31,
2010 [2]

 

Name and function

Rolf Dörig, Chairman

since Jan. 2010

1,800,000 [3]

246,088

30,000

 

Thomas O'Neill, Vice-Chairman

since Jan. 2010

427,596

52,760

2,000

 

Jakob Baer

since Jan. 2010

428,123

51,630

4,601

 

Alexander Gut

since May 2010

189,095

25,446

840

 

Andreas Jacobs

since Jan. 2010

450,000

714,915 [4]

 

Francis Mer

since Jan. 2010

428,123

51,630

 

David Prince

since Jan. 2010

297,000

3,000

2,416

 

Wanda Rapaczynski

since Jan. 2010

300,000

2,000

 

Judith A. Sprieser

since Jan. 2010

300,000

2,000

 

Subtotal

4,619,937

430,554

 

Total

5,050,491

758,772

[1]Including Directors' and Company's social contributions.

[2]Indicating the number of registered shares held, with a par value of CHF 1 each. The members of the Board of Directors and the Executive Committee are required to disclose to the Company direct or indirect purchases and sales of equity related securities of Adecco S.A.

[3]CHF 300,000 of the total net compensation was paid with Adecco S.A. shares.

[4]Refer to Corporate Governance Report, section 1.2 "Significant shareholders" and Note 5 regarding shares held by a group of which Andreas Jacobs is a member.


Executive Committee‘s compensation

For the year 2011

in CHF

Patrick De Maeseneire, CEO [1]

Total Executive Committee [2]

 

 

 

Gross cash compensation [3]:

 

 

• Base salary

1,800,263

9,214,661

• Annual bonus

1,620,000

6,131,195

Compensation in kind [4]

120,000

1,137,987

Social contributions [5]:

 

 

• Old age insurance/pensions and others

332,160

2,354,279

• Additional health/accident insurance

38,114

117,014

Other cash payments, including severance payments

 

1,883,245

Total conferred

3,910,537

20,838,381

Share awards granted in 2011 under the long-term incentive plan (LTIP) [6]:

 

 

• RSU awards

1,213,242

4,194,197

• Relative TSR awards

130,987

452,850

• Absolute TSR awards

87,246

301,625

• Additional TSR awards

58,776

203,200

Social contributions on awards, estimated [5]

 

49,237

 

Total conferred including LTIP

5,400,788

26,039,490

[1]Highest conferred individual compensation in 2011.

[2]In 2011, the Executive Committee consisted of Patrick De Maeseneire, Dominik de Daniel, Alain Dehaze, Theron I (Tig) Gilliam Jr., Peter Searle, Andreas Dinges, Mark Du Ree, Federico Vione, Enrique Sanchez, Sergio Picarelli, and Christian Vasino (all since January 2011), Martín Alonso (since August 2011), and François Davy (until June 2011). Notice periods of up to 12 months apply. For one member of the Executive Committee, severance payments of approximately CHF 0.9 million would be due in case of termination of the employment contract by the employer. For certain members of the Executive Committee, based on mandatory local law, severance payments may become due in case of termination.

[3]Including employee’s social contributions.

[4]Car allowance for private use, car lease financed by the Company, membership fees, housing allowance, relocation, education, health insurance, representation allowance. Includes tax equalisation payments to a member of the Executive Committee, partly refundable to the Company in the future.

[5]Employer’s social contributions.

[6]Value in CHF of Adecco S.A. shares awarded in 2011 under the LTIP 2011 (grant date: March 16, 2011).
Valuation of the share awards granted:

  • The grant date fair value of the restricted share unit awards (“RSU awards”) is equal to the closing price of the Adecco S.A. share on the day of grant less 3% discount related to non-entitlement of RSU awards to dividend until vesting. An additional discount of 11% is applied to the value of RSU awards granted to the French participants, related to additional 2-year post-vesting restrictions on sale of shares.
  • The grant date values of the total shareholder return awards (“TSR awards”) are calculated based on the closing price of the Adecco S.A. share on the day of grant multiplied by the respective probability factors. These factors reflect the likelihood that the respective TSR targets will be met at the end of the performance period. The probability factors of 0.40, 0.27, and 0.18 for relative, absolute, and additional TSR awards, respectively, have been determined using a binomial model. A discount of 3% is applied in relation to non-entitlement of TSR awards to dividend until vesting. An additional discount of 11% is applied to the value of TSR awards granted to the French participants, related to additional 2-year post-vesting restrictions on sale of shares by the participants.
  • The per-share value of awards granted in 2011 amounts to CHF 49.12 and CHF 55.19 for RSU awards, CHF 19.70 and CHF 22.13 for relative TSR awards, CHF 13.12 and CHF 14.74 for absolute TSR awards, and CHF 8.84 and CHF 9.93 for additional TSR awards (lower values: French participants).
  • Included are the awards granted to François Davy in 2011. Not included are the awards granted to Martín Alonso in 2011 in his function before he became a member of the Executive Committee.


For the year 2010

in CHF

Patrick De Maeseneire, CEO [1]

Total Executive Committee [2]

 

 

 

Gross cash compensation [3]:

 

 

• Base salary

1,800,000

9,631,381

• Annual bonus

2,160,000

8,649,131

Compensation in kind [4]

120,000

1,217,944

Social contributions [5]:

 

 

• Old age insurance/pensions and others

351,416

2,087,315

• Additional health/accident insurance

36,841

80,228

Total conferred

4,468,257

21,665,999

Share awards granted in 2010 under the long-term incentive plan (LTIP) [6]:

 

 

• RSU awards

1,425,770

5,069,246

• Relative TSR awards

155,863

554,169

• Absolute TSR awards

95,167

338,388

• Additional TSR awards

57,586

204,746

Social contributions on awards, estimated [5]

 

48,550

 

Total conferred including LTIP

6,202,643

27,881,098

[1]Highest conferred individual compensation in 2010.

[2]In 2010, the Executive Committee consisted for the full year of Patrick De Maeseneire, Dominik de Daniel, François Davy, Theron I (Tig) Gilliam Jr., Peter Searle, Andreas Dinges, Mark Du Ree, Alain Dehaze, Federico Vione, Enrique Sanchez, Sergio Picarelli, and Christian Vasino. Notice periods of up to 12 months apply. For two members of the Executive Committee, severance payments of approximately CHF 1.9 million (including bonus entitlement) and CHF 0.9 million, respectively, would be due in case of termination of the employment contract by the employer.

[3]Including employee’s social contributions.

[4]Car allowance for private use, car lease financed by the Company, membership fees, housing allowance, relocation, education, health insurance, representation allowance. Includes tax equalisation payments to a member of the Executive Committee, partly refundable to the Company in the future.

[5]Employer‘s social contributions.

[6]Value in CHF of Adecco S.A. shares awarded in 2010 under the LTIP 2010 (grant date: March 16, 2010).
Valuation of the share awards granted:

  • The grant date fair value of the restricted share unit awards (“RSU awards”) is equal to the closing price of the Adecco S.A. share on the day of grant less 3% discount related to non-entitlement of RSU awards to dividend until vesting. An additional discount of 11% is applied to the value of RSU awards granted to the French participants, related to additional 2-year post-vesting restrictions on sale of shares.
  • The grant date values of the total shareholder return awards (“TSR awards”) are calculated based on the closing price of the Adecco S.A. share on the day of grant multiplied by the respective probability factors. These factors reflect the likelihood that the respective TSR targets will be met at the end of the performance period. The probability factors of 0.41, 0.25, and 0.15 for relative, absolute, and additional TSR awards, respectively, have been determined using a binomial model. A discount of 3% is applied in relation to non-entitlement of TSR awards to dividend until vesting. An additional discount of 11% is applied to the value of TSR awards granted to the French participants, related to additional 2-year post-vesting restrictions on sale of shares by the participants.
  • The per-share value of awards granted in 2010 amounts to CHF 50.55 and CHF 56.79 for RSU awards, CHF 20.52 and CHF 23.06 for relative TSR awards, CHF 12.54 and CHF 14.08 for absolute TSR awards, and CHF 7.58 and CHF 8.52 for additional TSR awards (lower values: French participants).

For 2011, the variable portion of cash compensation (annual bonus) to the CEO amounted to 90% and for the other members of the Executive Committee ranged between 24% and 90% of the base salary. The variable portion of compensation consisting of share awards (including RSU awards; at values as indicated in the previous table) to the CEO amounted to 83% and for the other members of the Executive Committee ranged between 32% and 69% of the base salary. The CEO has reached 90% of the STIP bonus base, and the other members of the Executive Committee have reached between 32% and 128% of the STIP bonus base.

Compensation of former members of Governing Bodies (Board of Directors, Executive Committee, closely linked parties)

No compensation payments were made to other former members of Governing Bodies in relation to their former offices.

Shares allocated to Governing Bodies

In 2011, no Adecco S.A. shares were allocated to current or former members of Governing Bodies, except for part of the Chairman’s compensation paid with Adecco S.A. shares (refer to compensation table on page 114).

Share ownerships of Governing Bodies

As of December 31, 2011, the members of the Board of Directors, including parties closely linked, reported to hold 786,195 shares; not included are the shares held by a group of which Andreas Jacobs is a member (refer to Note 5 and section 1.2 “Significant shareholders” of the Corporate Governance Report). For the individual share ownerships of the Board of Directors, refer to the table “Board of Directors‘ compensation and shareholding” and section 1.2 “Significant shareholders” of the Corporate Governance Report.

The members of the Executive Committee, including parties closely linked, reported share ownership as indicated in the following table:

Share ownership
as of December 31 [1]

Patrick
De Maeseneire

Dominik  de Daniel

Alain  Dehaze

Theron I (Tig)
 Gilliam Jr.

Peter   Searle

Andreas Dinges

Mark
 Du Ree

Martín  Alonso [2]

 Federico Vione

Sergio  Picarelli

 Christian Vasino

François  Davy [3]

Total

 

2011

8,959

32,873

1,366

1,364

910

1,434

50

867

1,024

3,358

2,962

100

   55,267

2010

590

29,978

 

 

 

 

50

n.a.

 

1,050

1,000

100

32,768

[1]Indicating the number of registered shares held, with a par value of CHF 1 each.

[2]Became a member of the Executive Committee in 2011.

[3]Ceased to be a member of the Executive Committee in 2011, shareholding indicated as per date of departure.

The members of the Board of Directors and the Executive Committee are required to disclose to the Company direct or indirect purchases and sales of equity related securities in accordance with the requirements of the SIX Swiss Exchange.

Stock options and share awards held by and granted to Governing Bodies

Stock options

Stock options outstanding, as granted since the merger of Adia and Ecco in 1996, exercised by, lapsed from, and held by the members of Governing Bodies in office as of December 31, 2011 and as of December 31, 2010, are presented in the
following tables (no stock options were granted since 2004):

As of December 31, 2011

 

Last year of expiry detail

 

 

 

 

 

 

 

Year of grant

Martín

Alonso

Federico
Vione

Christian
Vasino

Strike price
(CHF)

Granted

Exercised

Lapsed

Held by
Martín
Alonso

Held by
Federico
Vione

Held by
Christian
Vasino

 

Stock options held

2003

2012

2012

2012

78.50

36,500

3,200

26,000

6,000

800

500

As of December 31, 2010

Year of grant

Last year of expiry detail

 

 

 

 

 

 

Federico
Vione

Christian
Vasino

Strike price
(CHF)

Granted

Exercised

Lapsed

Held by
Federico
Vione

Held by
Christian
Vasino

 

 

 

Stock options held

 

 

2003

2012

2012

78.50

6,500

3,200

1,500

800

1,000

One option entitles the holder to purchase one Adecco S.A. share under the conditions as outlined in the respective plan.

Options shown as “held” in the tables above are included as part of the total options outstanding presented in the table appearing in the Corporate Governance Report, section 2.7 “Convertible notes and options” and Note 9 to the consolidated financial statements.

For additional information on stock options, refer to the Corporate Governance Report, section 2.7 “Convertible notes and options”.


Share awards

Awards granted 2011
Share awards held as of December 31, 2011 granted on March 16, 2011 under the LTIP:

December 31, 2011

RSU awards

   TSR awards [1]

Total

 

Patrick De Maeseneire

21,983

17,757

39,740

Total Executive Committee

72,536

56,967

129,503


Awards granted 2010

Share awards held as of December 31, 2011 and December 31, 2010 granted on March 16, 2010 under the LTIP:

December 31, 2011

RSU awards

   TSR awards [1]

Total

 

Patrick De Maeseneire

16,737

20,277

37,014

Total Executive Committee

56,528

66,390

122,918

December 31, 2010

RSU awards

   TSR awards [1]

Total

 

Patrick De Maeseneire

25,106

20,277

45,383

Total Executive Committee

90,135

72,801

162,936


Awards granted 2009

Share awards held as of December 31, 2011 and as of December 31, 2010 granted on March 16, 2009, and April 1, 2009 under the LTIP:

December 31, 2011

EPS awards [2]

        TSR awards

Total

 

Patrick De Maeseneire [3]

22,500

22,500

45,000

Total Executive Committee

70,042

109,137

179,179

December 31, 2010

EPS awards [2]

        TSR awards

Total

 

Patrick De Maeseneire [3]

22,500

22,500

45,000

Total Executive Committee

80,912

128,945

209,857

[1]Split into relative TSR, absolute TSR, and additional TSR awards (one third each).

[2]For EPS awards refer to the description of the long-term incentive plan for the awards granted in 2009 as described on pages 189 and 190 of the Annual Report 2009.

[3]Special conditions: grant date April 1, 2009, vesting of 58% of the awards granted is guaranteed, subject to continued employment.

Additional fees and remuneration of Governing Bodies

No member of the Board of Directors has received any additional honorariums in 2011.

Loans granted to Governing Bodies

In 2011, the Company did not grant any guarantees, loans, advances or credits to members of the Board of Directors or to members of the Executive Committee, including closely linked parties.