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Compensation, shareholdings and loans

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The Board of Directors has the final responsibility for the remuneration of the Directors and the Executive Committee. The Nomination & Compensation Committee assists the Board in fulfilling its responsibility by evaluating the remuneration strategy and proposing individual compensation packages for the Executive Committee members and other key members of the management.

The Nomination & Compensation Committee ensures that Barry Callebaut offers an overall remuneration package which is aligned with corporate and individual value contribution and market practice, in order to attract and retain Directors and Executives with the necessary skills. The current remuneration scheme is not linked to any external benchmarks. The remuneration structure of the Board of Directors is comprised of fixed directors’ fees and grants of Barry Callebaut AG shares. The shares granted to the members of the Board of Directors vest without further restrictions after one year.

The remuneration framework for the Executive Committee of Barry Callebaut consists of four compensation elements: an annual base salary, an annual short-term cash bonus linked to the achievement of the short-term bonus criteria for the respective fiscal year (the on-target bonus ranges from 85% to 100% of base salary), long-term incentive comprised of a share grant (with a target value of 100% to 300% of the annual base salary) and other benefits (with a value of 10% to 20% of the base salary). The short-term bonus criteria for the members of the Executive Committee have been defined by the Board of Directors upon evaluation and recommendation of the NCC as follows for the current fiscal year (the percentage figures indicating the weight of the respective target):

Compensation

For the remuneration to the Executive Committee recorded in the fiscal year under review, please see note 6 to the Financial Statements of Barry Callebaut AG.

The granting of shares to management is regulated by a Deferred Share Plan 2011–14. For a period of three years (a “Grant Cycle”), an annual share value is determined by the Board of Directors for each individual plan participant. The number of shares to be granted to each participant with respect to each fiscal year is calculated by dividing the annual share grant value by the average closing price of Barry Callebaut shares during the last three months of the previous fiscal year. The granted shares vest according to the following schedule: 30% after one year, 30% after two years and 40% after three years. The vesting is subject to service criteria but not subject to any performance criteria. In addition, each participant is entitled to receive an upside bonus calculated on each share granted during the three-year Grant Cycle. This upside bonus is payable if the actual share price at the end of the respective Grant Cycle exceeds a certain benchmark share price defined by the Board of Directors at the onset of the Grant Cycle. Such upside bonus, if any, is paid in cash at the end of the respective Grant Cycle, subject to continued employment at the end of a Grant Cycle.

For details regarding the compensation, shareholdings and loans of the members of the Board of Directors and the Executive Committee during the last fiscal year, see note 6 in the Financial Statements of Barry Callebaut AG.

Barry Callebaut AG and Jacobs Holding AG, Zurich, have entered into an auxiliary services agreement, under which Jacobs Holding AG offers to Barry Callebaut AG certain management and consultancy services. In the fiscal year 2012/13, the total compensation paid by Barry Callebaut AG under this agreement amounted to CHF 1.54 million. The contract is renewable annually.


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