Responsibilities of the Board of Directors and the Nomination and Compensation Committee

Article 21 of the Articles of Association1) of Luzerner Kantonalbank governs the key points of compensation paid to the Board of Directors and Article 24 of the Articles of Association1) governs the key points of compensation and terms of employment of the members of the Executive Board. The duties set out in the Articles of Association are further specified in the organisational and business regulations2) and in the delineation of powers, whereby the relevant points in connection with stock corporation law3) (CO), the ‘Directive on Information Relating to Corporate Governance’ (DCG)4) of the Swiss Stock Exchange as well as FINMA Circular 2017/01 ‘Corporate governance – banks’5) and the FINMA Ordinance on Disclosure Obligations of Banks and Securities Dealers
(DisO-FINMA) are included in this report.

Pursuant to Article 23 of the Articles of Association1), committees of the Board of Directors may be formed. There is a Nomination and Compensation Committee (NCC-BoD), an Audit and Finance Committee (AFC-BoD) and a Risk and Strategy Committee (RSC-BoD). The tasks and duties addressed by stock corporation law3) are performed in particular by the NCC-BoD.

1) https://www.lukb.ch/ueber-uns/portraet/statuten
2) https://www.lukb.ch/ueber-uns/portraet/statuten
3) https://www.fedlex.admin.ch/eli/cc/27/317_321_377/en
4) https://www.ser-ag.com/en/topics/corporate-reporting.html
5) https://www.finma.ch/en/documentation/circulars/

The Board of Directors

The Board of Directors of LUKB is responsible for the corporate strategy. It determines the principles of strategy, organisation and financial planning and approves the framework concept for institution-wide risk management (risk policy). The Board of Directors nominates the members of the Board of Directors for the attention of the Annual General Meeting and elects the members of the Executive Board at the request of the NCC-BoD. At the request of the NCC-BoD, it approves the compensation regulations and proposes to the Annual General Meeting the maximum amounts of compensation to be paid to the Board of Directors and the Executive Board. The Board of Directors also prepares the Annual General Meeting and implements its resolutions.

Nomination and Compensation Committee (NCC-BoD)

The NCC-BoD supports the Board of Directors in its non-transferable and inalienable duties pursuant to Article 716a CO1). The duties of the NCC-BoD are governed by regulations adopted by the Board of Directors, which are reviewed periodically for topicality. In doing so, the NCC-BoD prepares the resolutions of the Board of Directors within the scope of the delineation of powers and makes implementation decisions. The NCC-BoD has the following duties in particular:

1) https://www.fedlex.admin.ch/eli/cc/27/317_321_377/en

Compensation policy

  • Supporting the Board of Directors in determining and reviewing the compensation policy
  • Supporting the Board of Directors in determining and reviewing the compensation system for the Board of Directors and the Executive Board
  • Preparing the proposals of the Board of Directors to the Annual General Meeting on the compensation of the Board of Directors and the Executive Board
  • Supporting the Board of Directors in preparing the Compensation Report
  • Annually determining the salary policy for LUKB staff in the form of an implementation decision

Human resources policy

  • Strategic human resources planning for the Board of Directors and the Executive Board
  • Defining the selection profiles, nominating the members of the Board of Directors and selecting the Executive Board (in both cases subject to approval by FINMA). This can be conducted in collaboration with an external executive search company.
  • Nomination of the members of the Board committees for the attention of the Board of Directors
  • Preparing the motions of the Board of Directors to the Annual General Meeting regarding the election and dismissal of the Chair and the other members of the Board of Directors, the members of the NCC-BoD and the independent proxy
  • Supporting the Board of Directors in succession planning and in the appointment and dismissal of the CEO, the other members of the Executive Board and the Secretary of the Board of Directors
  • Supporting the Board of Directors in issuing directives restricting the mandates of members of the Board of Directors and the Executive Board within the framework of the Articles of Association1)
  • Monitoring the mandated activities of the members of the governing bodies
  • Reviewing the expenses of the Executive Board members
  • Defining the strategic human resources policy for the bank's employees
  • Supporting the Board of Directors in preparing the Compensation Report
  • Supporting the Board of Directors in issuing the necessary regulations to restrict proprietary transactions by members of the Board of Directors and the Executive Board
1) https://www.lukb.ch/ueber-uns/portraet/statuten

The NCC-BoD consists of three members of the Board of Directors. Currently, these are Dr Martha Scheiber (Chair), Markus Hongler and Marc Gläser. They fully meet the independence criteria of the Swiss Code of Best Practice for Corporate Governance2).

2) https://www.economiesuisse.ch/en/publikationen/swiss-code

Advisors

The NCC-BoD can call in internal and/or external advisors for support, if necessary.

NCC-BoD meetings

Normally, the Chief Executive Officer (CEO) and the Head of Human Resources participate in the NCC-BoD meetings in an advisory capacity. The Chair of the NCC-BoD decides on the participation of other members of the Executive Board and other employees, external compensation experts and other third parties as required. The NCC-BoD meets as often as is necessary, but at least four times a year.

Focal points in 2025

In 2025, the NCC-BoD held five ordinary and five extraordinary meetings focusing on the following:

  • Development of the Human Resources (HR) functional strategy for the 2026–2030 strategy period (including compensation regulations and development of the Ownership Strategy)
  • Benchmarking of compensation concept and sum with comparable banks as the peer group
  • Preparing for the election of a member of the Executive Board (new Head of the Private Banking & Corporate Clients department)
  • Evaluation, selection and nomination of a new member of the Board of Directors as part of succession planning
  • Determination of the total amount of variable compensation for all employees and the amount available for the adjustment of the fixed compensation of individual employees
  • Review of the amount and composition of the compensation paid to the members of the Executive Board, taking into account feedback from shareholders and best-practice developments at comparable full-service banks, in particular listed medium-sized and larger cantonal and regional banks
  • Review of expenses and mandates received by members of the Executive Board
  • Preparing the compensation of the Board of Directors and the Executive Board (basic compensation, variable compensation) and submitting proposals
  • Preparing the Compensation Report and submitting proposals
  • Preparing the nomination of the members of the individual BoD committees and submitting proposals
  • Organisational structure: Creation of the Data, Analytics& AI business unit at second management level
  • Handling of other selected HR issues