6.3 Shareholdings of members of the Management Board

Compensation report

6. Share ownership information

6.1 Share ownership guidelines

To further align the interests of the members of the Board of Directors and the Management Board with those of Sonova’s shareholders, the share ownership guidelines of Sonova Holding AG (share ownership guidelines) require the members to hold a fixed value of shares in order to be eligible to participate in the in the EEAP equity based compensation program.

The revised guideline approach, effective as of February 1, 2018, based on holding a fixed value rather than a fixed number of shares, ensures that a minimal level of investment is retained regardless of share price fluctuation, and is in line with market practice and assures eligibility to participate in the equity based compensation programs.

The CEO and COO must hold shares in a value of CHF 1,000,000. A mandatory shareholding to the value of CHF 200,000 applies to the other members of the Management Board, reflecting the lower pay levels. The CHF 200,000 value also applies to the members of the Board of Directors. These shareholdings must be generally achieved within three years and five months, with the exception of the CEO and COO. The NCC monitors the progress toward the requirements on an annual basis.

Only shares, i.e. Restricted Shares, fully vested shares or shares which have been purchased by the individual outside of the EEAP, are counted.

6.2 Shareholdings of members of the Board of Directors

The tables in this section are audited by the external auditor.

The following tables show the equity of the individual members of the Board of Directors and persons closely linked to them.

	31.03.2018			31.03.2017
	Shares	Restricted Shares 1)	Options	Shares	Restricted Shares 1)	Options
Robert F. Spoerry, Chairman	29,780	18,972		25,607	20,440
Beat Hess, Vice-Chairman	1,833	7,649			8,130
Stacy Enxing Seng, Member		6,044			4,692
Michael Jacobi, Member	4,876	7,649		3,043	8,130	5,115
Anssi Vanjoki, Member	3,876	7,649	2,558	2,043	8,130	2,558
Ronald van der Vis, Member	2,355	7,649		522	8,130	5,115
Jinlong Wang, Member		7,649			6,297
Lynn Dorsey Bleil, Member 2)		2,865			1,513
Total (active members)	42,720	66,126	2,558	31,215	65,462	12,788

1) These shares are subject to a restriction period which varies from June 1, 2018 to June 1, 2023 depending on the grant date.

2) New member of the Board of Directors since June 2016.

For further details see also Note 30 in the consolidated financial statements.

The shareholding requirements according to the share ownership guidelines are entirely met by all members of the Board of Directors.

The following table shows the detailed breakdown of the outstanding options of the members of the Board of Directors.

	31.3.2018	31.3.2017
	Options EEAP 12 1)	Options EEAP 12 1)
Michael Jacobi		5,115
Anssi Vanjoki	2,558	2,558
Ronald van der Vis		5,115
Total (active members)	2,558	12,788

EEAP 2017 and 2018, no options or warrants were granted – 100 % restricted shares.

1) Exercise price CHF 95.85, vesting period 1.2.2012 – 1.6.2016 whereas one tranche being vested each year, exercise period 1.6.2013 – 31.1.2019.

6.3 Shareholdings of members of the Management Board

The tables in this section are audited by the external auditor.

The following tables show the equity of individual members of the Management Board and persons closely linked to them.

	31.03.2018				31.03.2017
	Shares 1)	PSUs	RSUs	Options	Shares 1)	RSUs	Options
Lukas Braunschweiler	17,061		9,953	191,152	14,323	9,891	159,549
Arnd Kaldowski 2)	6,599	4,109		86,543
Claude Diversi	2,250	1,854	3,971	36,207	1,500	5,309	32,753
Hansjürg Emch	8,544	1,854	4,431	62,710	8,619	6,256	59,316
Hartwig Grevener	5,209	1,854	4,431	61,680	3,384	6,256	51,086
Martin Grieder	2,000	1,854	3,980	36,714	1,000	4,874	34,132
Claudio Bartesaghi 3)	1,032	872	718	8,661 7)
Hans Mehl	5,036	1,854	4,431	39,464	3,211	6,256	44,886
Andi Vonlanthen	15,161	1,854	4,431	66,231	13,336	6,256	60,037
Christophe Fond 4)		1,896	1,790	24,078		1,790	13,243
Total (active members)	62,892	18,001	38,136	613,440	45,373	46,888	455,002
Sarah Kreienbühl 5)					5,360	6,256	61,316
Franz Petermann 6)					1,510	2,882	17,447
Total (including former members)	62,892	18,001	38,136	613,440	52,243	56,026	533,765

1) Shares are dividend entitled with full voting rights.

2) Member of the Management Board since October 1, 2017.

3) Member of the Management Board since October 1, 2017.

4) Member of the Management Board since January 23, 2017.

5) Member of the Management Board until September 30, 2017.

6) Member of the Management Board until July 31, 2017.

7) includes SARs (SARs grant the right to participate in the appreciation of Sonova shares without issuance of shares).

For further details see also Note 30 in the consolidated financial statements.

The shareholding requirements according to the share ownership are entirely met by all members of the Management Board.

The following table shows the shareholding requirements relative to the fixed base salary and the indicative actual shareholdings.


	Base salary	Share requirements 1)	Actual shares 2)	Fulfillment of share ownership guidelines	Share ownership ratio to base salary
	in CHF	in CHF	in CHF	in %	ratio
Lukas Braunschweiler, CEO	600,000	1,000,000	2,589,860	259	4.3
Arnd Kaldowski, COO	900,000	1,000,000	1,001,728	100	1.1
Other members of the MB 3)	411,994	200,000	724,303	362	1.8

1) Share requirements to be achieved after 17 months for the CEO and COO and for other members of the MB after 41 months.

2) Calculated with Sonova closing share price of March 29, 2018 (CHF 151.80).

3) Average of other members of the Management Board with shareholding requirements.

The calculation to the fulfillment and the ratio to base salary of the share ownership shown above are included for illustration purposes only.

The following table shows the detailed breakdown of the outstanding options of the members of the Management Board.

	31.03.2018
		Options EEAP 18 1)	Options EEAP 17 2)	Options EEAP 16 3)	Options EEAP 15 4)	Options EEAP 14 5)	Options EEAP 13 6)	Options EEAP 12 7)	Total options
Lukas Braunschweiler		31,603	38,625	25,788	27,173	21,719	20,669	25,575	191,152
Arnd Kaldowski		86,543 9)							86,543
Claude Diversi		10,594	12,507	7,737	3,836	1,533			36,207
Hansjürg Emch		10,594	12,948	10,315	10,869	8,687	8,267	1,030	62,710
Hartwig Grevener		10,594	12,948	10,315	10,869	8,687	8,267		61,680
Martin Grieder		10,594	12,948	7,737	5,435				36,714
Claudio Bartesaghi 8)		4,984	2,148 10)	1,529					8,661
Hans Mehl		10,594	12,948	8,315	5,435	2,172			39,464
Andi Vonlanthen		10,594	12,948	10,315	10,869	8,687	8,267	4,551	66,231
Christophe Fond		10,835	13,243						24,078
Total		110,986	129,115	82,051	74,486	51,485	45,470	31,156	613,440

1) Exercise price CHF 147.85, vesting period 1.2.2018–1.6.2022 whereas one tranche being vested each year, exercise period 1.6.2019–31.1.2028.

2) Exercise price CHF 130.00, vesting period 1.2.2017–1.6.2021 whereas one tranche being vested each year, exercise period 1.6.2018–31.1.2024.

3) Exercise price CHF 124.20, vesting period 1.2.2016–1.6.2020 whereas one tranche being vested each year, exercise period 1.6.2017–31.1.2023.

4) Exercise price CHF 121.10, vesting period 1.2.2015–1.6.2019 whereas one tranche being vested each year, exercise period 1.6.2016–31.1.2022.

5) Exercise price CHF 124.60, vesting period 1.2.2014–1.6.2018 whereas one tranche being vested each year, exercise period 1.6.2015–31.1.2021.

6) Exercise price CHF 109.10, vesting period 1.2.2013–1.6.2017 whereas one tranche being vested each year, exercise period 1.6.2014–31.1.2020.

7) Exercise price CHF 95.85, vesting period 1.2.2012–1.6.2016 whereas one tranche being vested each year, exercise period 1.6.2013–31.1.2019.

8) Member of the Management Board since October 1, 2017.

9) Includes the one-time, non-recurring performance option grant (47,415 options); exercise price of CHF 147.85, vesting period of 1.2.2018 – 1.4.2023, exercise period 1.4.2023 – 30.9.2027.

10) SAR’s EEAP 2017 (SARs grant the right to participate in the appreciation of Sonova shares without issuance of shares).

	31.3.2017
		Options EEAP 17 1)	Options EEAP 16 2)	Options EEAP 15 3)	Options EEAP 14 4)	Options EEAP 13 5)	Options EEAP 12 6)	Total options
Lukas Braunschweiler		38,625	25,788	27,173	21,719	20,669	25,575	159,549
Claude Diversi		12,507	10,315	5,754	3,066	1,111		32,753
Hansjürg Emch		12,948	10,315	10,869	8,687	8,267	8,230	59,316
Hartwig Grevener		12,948	10,315	10,869	8,687	8,267		51,086
Martin Grieder		12,948	10,315	10,869				34,132
Sarah Kreienbühl		12,948	10,315	10,869	8,687	8,267	10,230	61,316
Hans Mehl		12,948	10,315	10,869	8,687	2,067		44,886
Franz Petermann		5,885	4,854	3,837	2,044	827		17,447
Andi Vonlanthen		12,948	10,315	10,869	8,687	8,267	8,951	60,037
Christophe Fond 7)		13,243						13,243
Total		147,948	102,847	101,978	70,264	57,742	52,986	533,765

1) Exercise price CHF 130.00, vesting period 1.2.2017–1.6.2021 whereas one tranche being vested each year, exercise period 1.6.2018–31.1.2024.

2) Exercise price CHF 124.20, vesting period 1.2.2016–1.6.2020 whereas one tranche being vested each year, exercise period 1.6.2017–31.1.2023.

3) Exercise price CHF 121.10, vesting period 1.2.2015–1.6.2019 whereas one tranche being vested each year, exercise period 1.6.2016–31.1.2022.

4) Exercise price CHF 124.60, vesting period 1.2.2014–1.6.2018 whereas one tranche being vested each year, exercise period 1.6.2015–31.1.2021.

5) Exercise price CHF 109.10, vesting period 1.2.2013–1.6.2017 whereas one tranche being vested each year, exercise period 1.6.2014–31.1.2020.

6) Exercise price CHF 95.85, vesting period 1.2.2012–1.6.2016 whereas one tranche being vested each year, exercise period 1.6.2013–31.1.2019.

7) Member of the Management Board since January 23, 2017.

Glossary

AGM Annual General Shareholders’ Meeting
AHV Old Age and Survivors’ Insurance
ALV Unemployment Insurance
Articles of Association Articles of Association of Sonova Holding AG
ASP Average Sales Price
BoD Board of Directors
CAGR Compound Annual Growth Rate
CEO Chief Executive Officer
CFO Chief Financial Officer
CHF Swiss Francs
COO Chief Operating Officer
EBITA Earnings Before Interest, Taxes and Amortization/Operating profit before acquisition-related amortization
EEAP Employee Equity Award Plan
EPS Earnings Per Share
FCF Free Cash Flow
GVP Group Vice President
KPIs Key Performance Indicators
MB Management Board
n.a. Not applicable
NCC Nomination and Compensation Committee
OPEX Operating Expenses
PSU Performance Share Unit
ROCE Return on capital employed
RSU Restricted Share Unit
rTSR relative Total Shareholder Return
SLI Swiss Leaders Index
VCC Variable Cash Compensation