Compenstaions

Compensation, shareholdings and loans

Content and method of determining the compensation and the share ownership programs

In its function as the Nomination & Compensation Committee, the Committee of the Board of Directors proposes to the Board the principles and rules for the compensation of the Chairman, Directors and GEM, as well as the amount of remunerations paid to members of both of those corporate bodies.

The Board of Directors approves the aforementioned principles and rules and determines the amount of total compensation Board and GEM receive.

Board of Directors

Members of the Board of Directors receive compensation for the duties and responsibilities conferred on them by law and pursuant to Art. 20 of the Articles of Incorporation. This is determined annually by the Board of Directors at the proposal of the Committee of the Board of Directors in its capacity as Compensation Committee.

It is distributed to the members of the Board of Directors on a graduated basis according to their function in the Board of Directors and their function in its committees or in other corporate bodies (e.g. the pension fund). Three-quarters of this compensation is paid in cash, and one-quarter in the form of freely disposable VP Bank bearer shares, the number of which is determined by the current market price at the time of grant.

At VP Bank, there are no agreements pertaining to “golden parachutes” for members of the Board of Directors.

Group Executive Management

Following the decision of the Board of Directors taken on March 27, 2008, VP Bank introduced a new, long-term and value-oriented compensation model applicable to the GEM and second-level management members of VP Bank.

Under this model, the compensation of these members of senior management consists of the following:

At VP Bank, there are no agreements on severance compensation for acting members of Group Executive Management.

In connection with the departure of Adolf E. Real from the GEM and in reflection of his 26 years of activity on behalf of VP Bank, a termination grant was agreed in the amount of CHF 975,000.

Transparency of compensation, shareholdings and loans pertaining to issuers domiciled abroad

As a SIX-listed issuer domiciled abroad, VP Bank discloses information on compensations, shareholdings and loans within the context of Section 5.2 of the Commentary on the Corporate Governance Directive dated September 20, 2007, i.e. corresponding to Art. 663bbis of the Swiss Code of Obligations.