Compensation paid to the Executive Board
Compensation regulations for the Executive Board and resolutions for the 2025/2026 financial years
The compensation of the Executive Board members is based on the EB compensation regulations approved by the Board of Directors at the request of the NCC-BoD. The version of the compensation regulations for the Executive Board approved by the Board of Directors on 27 October 2022 is relevant for the 2025 financial year. The regulations are based on Article 24, numbers 4–10 of the Articles of Association1), whereby this report contains the relevant information in connection with stock corporation law2), the DCG3) and the FINMA Circulars 2017/01 ‘Corporate governance – banks’4) and 2016/01 ‘Disclosure – banks’4). The level of compensation is aligned with that of listed medium-sized and larger cantonal and regional banks (basis: information in the respective annual reports), whereby the 2025 Ownership Strategy of the Canton of Lucerne sets individual maximum limits. These maximum limits lead to a reduction in the individual variable compensation of the individual members of the Executive Board.
The Annual General Meeting annually approves the maximum amount of basic compensation, retirement and risk contributions and other incidental personnel costs for the entire Executive Board for the current financial year, based on the proposal by the Board of Directors. At the request of the NCC-BoD, the Board of Directors determines the individual basic compensation, taking into account the requirements of the Annual General Meeting. The Chair of the Board of Directors prepares the proposals for the CEO and the CEO prepares the proposals for the other members of the Executive Board. Pursuant to Article 24 para. 8 of the Articles of Association1), the Board of Directors may set a limited additional amount if a member of the Executive Board joins the Executive Board after the date of the Annual General Meeting. In accordance with the existing affiliation agreements, retirement and risk pension plan contributions are based on the amount of individual remuneration and age.
The maximum insured salary is limited in each case. Mandatory employer social security contributions are also shown. Other incidental personnel costs may fluctuate due to specific factors, in particular in connection with service awards.
The Annual General Meeting approves the amount of variable compensation for the entire Executive Board for the past calendar year at the ordinary Annual General Meeting based on the proposal of the Board of Directors. The share transfer to be completed by the end of February in accordance with the applicable ‘Employee Participation Programme’ regulations is subject to approval by the Annual General Meeting. The cash portion will be transferred on 20 May 2026.
The 2025 Ownership Strategy of the Canton of Lucerne5) approved by the Government Council of the Canton of Lucerne on 17 April 2025 sets limits for direct individual personnel compensation. While the 2021 Ownership Strategy set the requirements for the total cumulative personnel compensation (direct personnel compensation plus ancillary costs) for all EB members (5.35 million Swiss francs), the 2025 Ownership Strategy now defines a maximum limit for direct personnel compensation (basic and variable compensation) to be paid to individual EB members. Different higher limits apply to EB members for whom direct personnel compensation was paid in excess of the newly defined limits in the 2024 financial year. Following reductions, the maximum amounts set by the Board of Directors in line with the statements below are within the maximum amount defined by the Government Council of the Canton of Lucerne.
The level of basic compensation is reviewed annually at the first meeting of the Board of Directors or when new EB positions are appointed and, if necessary, adjusted subject to approval at the next Annual General Meeting.
The amount of variable compensation depends on the adjusted net profit before taxes at Group level, the Executive Board function and the individual performance value. The Board of Directors only intends to make adjustments in exceptional cases.
Based on the requirements set out in the 2025 Ownership Strategy, all members of the Executive Board are subject to individual reductions in variable compensation. Accordingly, as in the previous year, the following principles underlying compensation models only apply to a limited extent, as compensation under the employment contract is above the specifications of the Ownership Strategy and individual reductions must be made accordingly: if adjusted profit before tax increases compared to the previous year and/or defined targets are exceeded, this has a correspondingly positive impact on variable compensation. Under the compensation model in force since 2023, the variable compensation per Executive Board member may be subject to an individual upper limit based on their function value (CEO: 450,000 Swiss francs). In the event of a decline in adjusted net profit before taxes and/or the non-achievement of the defined targets, the variable compensation is reduced. The assessment of individual target achievement is based in part on a discretionary decision by the CEO (for other members of the Executive Board) and the BoD (for the entire Executive Board).
On 29 January 2026, the Board of Directors determined the variable compensation of the members of the Executive Board for 2025, as proposed for approval at the Annual General Meeting on 13 April 2026.
The Executive Board influences the consolidated results and thus also the shareholder value in the medium and long term. For this reason, a significant portion of the variable compensation is paid out in the form of shares. To emphasise the sustainability of the business policy, the blocking period of the shares allocated to the Executive Board is normally six years (but at least three years). The blocking period for the allocated shares is determined annually by the Board of Directors. The blocking period defined for the allocation of shares remains unchanged even for a departing Executive Board member, irrespective of whether the member is retiring or stepping down for another reason. This means that the allocated shares cannot be sold before the defined blocking period has expired.
Members of the Executive Board are obliged to draw 70 % of the variable compensation in the form of blocked shares of the bank. In accordance with the regulations in force, the shares allocated for the 2025 financial year are blocked until 27 March 2032. The remainder of the variable compensation is paid out in cash. The members of the Executive Board have old-age and risk insurance with the Pension Fund of Luzerner Kantonalbank; supplemental insurance is also provided.
In accordance with the EB compensation regulations, members of the Executive Board retire between 61 and 63 years of age (usually at 62). Early retirement is possible for all employees from the age of 58 in accordance with the applicable Employee Regulations. There is no entitlement to continued employment after retirement in accordance with the regulations or employment contract. However, in individual cases, the bank may offer continued employment up to the age of 70.
The legally fixed employer contributions to OASI/IV/UI/EO/FAK and accident insurance as well as the pillar 2 employer contributions prescribed by the regulations are reported under ‘Retirement and risk pension plan contributions’ in accordance with the ‘Compensation system in general’ section.
Other incidental personnel costs include, in particular, expenses in connection with service awards (after ten years of service at the earliest), company child allowances and the costs incurred by LUKB for the periodically run limited voluntary employee participation programme. Other incidental personnel costs also include any tax offsetting of expenses incurred by LUKB, including the private share of the company car provided by LUKB.
Members of the Executive Board are entitled to the special conditions applicable to LUKB employees. For example, they are also entitled to purchase shares at a reduced price set by the NCC-BoD as part of the employee participation programme implemented at irregular intervals for all employees. Regulations apply for the employee participation programme. Each member of the Executive Board may purchase up to 300 shares at a price set by the NCC-BoD that is identical for all employees. Since 2018, the members of the Executive Board have voluntarily waived their subscription rights in consultation with the NCC-BoD.
Overview of the compensation system for the CEO and other members of the Executive Board
The individual direct personnel compensation for the 2025 financial year is limited as follows in accordance with the Ownership Strategy.
Topic | Policy | |
Direct personnel compensation | ||
Basic compensation |
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Variable compensation |
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Incidental personnel costs | ||
Retirement and risk pension plan contributions |
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Other incidental personnel costs | In accordance with regulations | |
Additional costs may arise for LUKB in the event of personnel changes. For example, in the event of the termination of an employment relationship , direct personnel compensation costs and incidental personnel costs may still be incurred by the employer in accordance with the general compensation system for a maximum of twelve months. Additional payments may also be incurred upon a new member joining the Executive Board, which are made in strict compliance with statutory requirements (in particular stock corporation law1)) and reported separately.
Members of the Executive Board receive lump-sum expenses that cover non-billable costs and the total of which has been approved by the tax authorities. Lump-sum expenses do not constitute compensation and do not form part of the total compensation.
Fixed compensation for 2025
Within the meaning of Art. 24 para. 6 (a) of the Articles of Association1), fixed compensation is the basic compensation, employer contributions for retirement pension plans and risk provisioning and other incidental personnel costs paid to operational Executive Board members. The relevant maximum amount is submitted annually to the Annual General Meeting. This provision was first implemented at the 2015 AGM. The effective fixed compensation for 2025 in accordance with Article 24 para. 6 (a) of the Articles of Association1) for operational Executive Board members is:
- Total basic compensation: 2,386,020 Swiss francs
- Total retirement pension plan and risk provisioning contributions: 1,244,521 Swiss francs
- Total other incidental personnel costs: 56,300 Swiss francs
The sum of the above components totalling 3,686,841 Swiss francs does not exceed the maximum amount of 3,730,000 Swiss francsapproved by the Annual General Meeting on 14 April 2025. In addition, lump-sum expenses of 96,000 Swiss francs were paid out to members of the Executive Board with operational responsibilities to compensate for non-billable expenses. These expenses do not constitute compensation. No compensation has been paid to new or departing members of the Executive Board since 2016.
Variable compensation for 2025
Pursuant to Article 24 para. 6 (b) of the Articles of Association1), the Annual General Meeting approves the variable compensation of the Executive Board for the past financial year. Variable compensation generally depends on the development of net profit before taxes and the target achievement of the individual Executive Board members. Net profit before taxes increased by 3.0% in 2025 compared with 2024. Based on the company's performance and the additional individual employee evaluation, the Board of Directors has decided on the following total amount for variable compensation for the Executive Board in 2025:
- Total variable compensation: 1,748,658 Swiss francs
In doing so, the Board of Directors decided that – in accordance with the compensation regulations for the Executive Board of 27 October 2022 – 70 % of the variable compensation is to be paid out in shares blocked for a period of six years (blocked until 27 March 2032). The relevant calculation value for the 2025 financial year is 63.18 Swiss francs due to the six-year blocking period. This corresponds to the reduced market value of 70.50 % of the relevant share value of 89.62 Swiss francs (volume-weighted average price of the trading days for the month of December 2025), which is tax deductible with a six-year blocking period. In the previous year, the relevant stock market price, also subject to a six-year blocking period, was 63.70 Swiss francs. No options are allocated. In accordance with the regulatory basis and the decision of the NCC-BoD, the transfer of ownership of the shares took place on 24 February 2026 subject to approval by the Annual General Meeting. The remaining cash payment – less employee social security contributions – will only take place after the AGM on 20 May 2026. The variable compensation amounted to 1,702,533 Swiss francs for 2024 and 1,722,244 Swiss francs for 2023.
Total compensation for 2025
The total compensation takes into account the basic compensation and the variable compensation for the 2025 financial year, irrespective of the time of payment. In addition, there are employer contributions to the retirement and risk pension plan and other incidental personnel costs.
In the 2025 financial year, the ratio of basic compensation to variable compensation for the Executive Board was 1 : 0.74.
The basic compensation for the entire Executive Board amounted to 2,386,020 Swiss francs for the 2025 financial year and 2,373,020 Swiss francs for the 2024 financial year.
The incidental personnel costs are based on the contractual terms of employment. No decisions deviating from the requirements were taken in 2025. Retirement pension plan and risk provisioning contributions amounted to 1,244,521 Swiss francs in 2025 and 1,217,243 Swiss francs in 2024. Other incidental personnel costs may fluctuate at a low level. No payments were due in 2024 and 2025 in connection with new or departing Executive Board members. Other incidental personnel costs amounted to 56,300 Swiss francs in 2025 and 57,202 Swiss francs in 2024. On 29 January 2026, the Board of Directors set the variable compensation for the 2025 financial year (see Section ‘Variable compensation 2025’).
Compensation paid to the members of the Executive Board
2025 | 2024 | |||||||
Values in CHF | Daniel Salzmann, CEO | Executive Board | Daniel Salzmann, CEO | Executive Board | ||||
Basic compensation | 600,002 | 2,386,020 | 600,002 | 2,373,020 | ||||
Variable compensation | ||||||||
of which paid in cash | 125,100 | 525,900 | 123,000 | 511,000 | ||||
of which paid in shares1) | 291,885 | 1,222,758 | 285,916 | 1,191,533 | ||||
Total direct personnel compensation (gross salary) | 1 016 987A) | 4 134 678A) | 1,008,918 | 4,075,553 | ||||
Employer contributions to OASI/IV/UI/EO/FAK (first pillar) and accident insurance | 71,213 | 292,178 | 70,676 | 288,212 | ||||
Employer contributions to retirement and risk pension plan (second pillar)2) | 207,585 | 952,343 | 200,784 | 929,031 | ||||
Total employer contributions to retirement and risk pension plan | 278,798 | 1,244,521 | 271,460 | 1,217,243 | ||||
Allowance for years of service3) | 0 | 0 | 0 | 0 | ||||
Company child allowances | 800 | 6,200 | 800 | 7,600 | ||||
Reimbursement of expenses, benefits in kind, expenses4) | 12,111 | 50,100 | 12,111 | 49,602 | ||||
Total other incidental personnel costs | 12,911 | 56,300 | 12,911 | 57,202 | ||||
Total incidental personnel costs | 291,709 | 1,300,821 | 284,371 | 1,274,445 | ||||
Total costs (gross) including employer contributions | 1,308,696 | 5 435 499 | 1,293,289 | 5 349 998B) |
A)Maximum limit on individual direct employee compensation for 2025 as per the 2025 Ownership Strategy: 854,281 Swiss francs. Higher maximum amounts apply to those members whose individual direct compensation was above the CHF 847,501 threshold in the 2024 financial year.
B)Maximum limit on total compensation (direct gross personnel compensation plus incidental personnel costs including employer contributions) in accordance with the requirements of the Board of Directors and the 2021 Ownership Strategy of Canton Lucerne for the entire Executive Board: 5,350,000 Swiss francs(for 2024)
1)Shares: Recognition at the share price of CHF 63.18 (2025) or CHF 44.91 (2024) determined taking into account the blocking period
2)Age- and salary-dependent insurance contributions to the second pillar (pension fund of Luzerner Kantonalbank and supplemental insurance) in accordance with the ordinary pension elements
3)All LUKB employees have the right to a periodic allowance for years of service after completing 10 years of service. This may be taken in the form of either an additional 10 to 20 days of holiday or corresponding monetary value. During the 2025 financial year, none of the Executive Board members celebrated a corresponding service anniversary that was recognised with holiday leave (previous year: no service anniversary with holiday leave).
4)Expenses and outlays, if taxable
In addition, lump-sum expenses of CHF 96,000 were paid out for the 2025 financial year, of which CHF 24,000 was paid to Daniel Salzmann (amounts unchanged). These lump-sum expenses do not constitute a form of compensation.
Compensation paid to former members of the Executive Board
LUKB did not pay any compensation to former members of the Executive Board in 2025 or 2024.
Fixed compensation for 2026
In accordance with Article 24 para. 6 (a) of the Articles of Association1), the Annual General Meeting approves the fixed compensation of the Executive Board for the current financial year. The amount to be proposed comprises the basic compensation, contributions to the retirement pension plan and risk provisioning as well as other incidental personnel costs.
Based on the EB compensation regulations, the Board of Directors decided on the following maximum fixed compensation for 2026 at the request of the Nomination and Compensation Committee (NCC-BoD) on 29 January 2026, subject to approval of the total amount of 3,890,000 Swiss francs by the Annual General Meeting:
- Total basic compensation: 2,390,000 Swiss francs
- Total retirement pension plan and risk provisioning contributions: 1,280,000 Swiss francs
- Total other incidental personnel costs plus any one-off costs for incoming/outgoing staff: 220,000 Swiss francs
Based on the aforementioned components, the Board of Directors will propose a maximum amount of fixed compensation of 3,890,000 Swiss francs for the 2026 financial year to the Annual General Meeting on 13 April 2026.
Other incidental personnel costs include a special payment under the employment contract in connection with the appointment of a new member of the Executive Board of 140,000 Swiss francs. As in the previous year, other ordinary incidental personnel costs amount to a maximum of 80,000 Swiss francs.
The previous basic compensation will continue to be paid out until the ordinary General Meeting on 13 April 2026. If the proposal is approved, the retroactive payment for the period from January to April will take place in May 2026, which means that an approved compensation adjustment will be made retroactively with effect from 1 January 2026.
In addition, lump-sum expenses of 96,000 Swiss francs will be paid out in 2026. The lump-sum expense allowances also amounted to 96,000 Swiss francs in both 2025 and 2024.