The authoritative rules state that the total of all compensation must be disclosed. This is understood specifically to include fees, salaries, credits, bonuses and benefits in kind received directly or indirectly by members of the board of directors and/or by senior management. The figures given by Zehnder for its executive directors in the company's 2003 annual report covered only directors' emoluments alongside the respective share allocations. According to the Directive, the annual report should have disclosed the total compensation paid to these executive directors. The highest total compensation paid to a member of the board of directors - taking compensation for any executive function into account - should also have been disclosed.
In its 2003 annual report, Zehnder records compensation for a "senior management" comprising 58 persons. Such a loose interpretation of the term is intolerable. According to the authoritative rules, members of senior management are understood to be those with management responsibility who are generally appointed by the board of directors and who report directly to the board or to the CEO. It is stated clearly that unduly extending the group of those deemed to be "senior management" is not permitted. The organizational regulations published by Zehnder actually provide for a group management which comprises the chairman, the individual divisional heads, the head of finance and controlling and other persons appointed by the board of directors. The term "senior management" cannot be extended to cover a body of 58 people.
Zehnder has been compelled to correct this information. It has done so and made the amendments to the corporate governance section of its 2003 annual report on its website (www.zehndergroup.com).
Information on the Corporate Governance Directive can be accessed at:
www.swx.com/admission/cg_intro_en.html
Previous sanctions issued by SWX can be accessed at:
www.swx.com/admission/publicity_sanctions_en.html
