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Christoph BitzerHello everybody. My name is Chris Bitzer, and as George said, I head the Group HR function in Swiss Re. I would like to give you an overview of our [remuneration] philosophy as well as some highlights of changes we’ve made in the last year. I would concentrate on the most important points and allow more details in the Q&A later. If you turn to Slide 6, I would like to start with the compensation principles that drive us when we design all compensation frameworks at Swiss Re. First of all, we believe in a strong performance culture with a clear focus on risk-adjusted financial results. Secondly, a clear link between business results, individual contribution, compliance and the reward that the individual gets. Third, we want to have measurement and reward for long-term results. Fourth element being incentives that are sensible and targeting controlled risk-taking. Last but not least, this should put us in a position to remain our position as a strong employer in the market. If you turn to Slide 7, we have been getting quite some feedback from investors and regulators on our 2011 compensation framework and this initiated a full review of the compensation framework. Overall, we found that the compensation framework is robust and competitive. There were several smaller changes identified and one large one. The large change was a change in the long-term incentive plan. We have first granted the new scheme in March 2012. And it replaces the LTI that we had during the years 2006 to 2011. If you turn to Slide 8, we believe that new Compensation Report features many positive improvements that should hopefully speak to those elements that you gave us feedback on during the last year. We have disclosed performance targets for both annual API and Value Alignment Incentive and also have made the performance drivers of the leader of performance plan transparent in the new disclosure. We also have now in the new report a disclosure of minimum or maximum pay-out levels for our top management. We mentioned that this, the executive notice periods that have always been there, but were not disclosed before.
Performance shares are no longer paid to members of the Board, which was a request to separate more the compensation schemes of the Board from those of management. We state the clawback for future conditions, both on the VAI and the LPP. We have now made public our target stock ownership that’d be half our senior management. Including the timeframes that are necessary to reach these holdings and we have also removed the discretionary markup for VAI that was recommended by many shareholders.If I may ask you now to turn to page nine. I quickly want to give you an overview of the compensation elements that we use at Swiss Re and one thing that's very important to me to point out that this compensation framework applies to all employees at Swiss Re, whether they are entry level or the CEO. We have as every other company of course a base salary. Then a cash component of our available annual compensation and a second component that's a deferred cash component that we call Value Alignment Incentive, VAI. This component vests over three years. It is paid out in cash and has a leverage between 50% and 150%. I will come to the drivers of the performance a bit later. Then we have the long-term performance incentive, which we now call Leadership Performance Plan, LPP. It continues to have a three-year vesting period. It is settled in shares and it has a leverage of 0% to 150%, which is reduced from the 0% to 200% that we used to have in the LTI, and I will also come a bit more to the details later on this plan. Read the rest of this transcript for free on seekingalpha.com