3. Compensation policy and principles
At Sonova, our commitment to all our stakeholders drives us to try to attract and retain the best talent essential for our continued success. For that reason, our compensation framework is designed to be competitive, fair, and performance-driven. We recognize contributions. We reward excellence. We bring together people with diverse skills and perspectives to innovate, lead, and win for our customers in technology and hearing care – ensuring we remain ahead. Our competitive compensation framework is based on the following principles:
Pay for performance
Compensation rewards best-in-class performance. A large portion of compensation depends on the companyʼs performance and individual contributions. We recognize both short-term success and long-term value creation through a well-balanced combination of incentive plans.
Market competitiveness
To be able to attract, motivate, and retain talented executives and employees, compensation is periodically benchmarked and is in line with competitive market practice.
Alignment with company values
Compensation incentivizes behavior that is in line with our high standards of integrity and our values: we care, we drive innovation, we strive for excellence, we take accountability and we build the best team. ESG considerations are now more formally integrated in the compensation of the Group Executives.
Alignment with shareholdersʼ interests
A substantial portion of the compensation of the Board and the Group Executives is delivered in company equity. We also have share ownership guidelines to foster the long-term commitment and alignment of their interests with those of our shareholders.
Equal pay for equal work is a core principle at Sonova. We take concrete steps in our job evaluation and leveling processes to ensure fair compensation. We regularly review compensation against relevant local legal and regulatory equal pay requirements as they evolve. Beyond compliance, we analyze whether we pay female and male employees equally for the same job or equally valued roles, and we take corrective actions where necessary.
To discourage inappropriate risk-taking and short-term gains at the expense of long-term company health, we have built in safeguards: both cap and clawback provisions apply to short- and long-term incentive plans for the Group Executives.