Dear Shareholders,

On behalf of the Board of Directors and the Remuneration Committee (“RC”), I am very pleased to present the Remuneration Report 2016 to you.

2016 was a special year for Dufry in which the integration of Nuance and World Duty Free, and the achievement of first synergies related to these two acquisitions, were key topics for management and the Board of Directors alike.

In 2016, we also implemented the changes in the Remuneration Committee which we outlined in 2015. Following the Shareholders’ Meeting, the Board rearranged its Board Committees and split the previously combined Nomination and Remuneration Committee into two separate committees. Given the enlarged size of Dufry and the higher intensity of each of the functions, the separation of the two topics into two committees has been warranted. The Remuneration Committee today consists of three non-executive independent members of the Board of Directors namely Ms. Heekyung (Jo) Min and Messrs. Xavier Bouton and Jorge Born.

At the 2016 Shareholders’ Meeting, the shareholders approved the proposed maximum aggregate amount of compensation for the Board of CHF 7.7 million for the period from AGM 2016 to AGM 2017 with a majority of 91.2%. The proposal for the maximum aggregate amount of compensation for the Group Executive Committee of CHF 49 million for the fiscal year 2017 period was accepted with a majority of 94.8%. Furthermore, the Remuneration Report 2015 has been approved by the Shareholders’ Meeting in a consultative, non-binding vote by 91.1% of the votes represented. The current Remuneration Report 2016 will again be submitted to a consultative vote at the Shareholders’ Meeting in April 2017.

In fiscal year 2016, the Remuneration Committee held four meetings. The average attendance ratio was 100% for all meetings.

The Remuneration Committee mandated PricewaterhouseCoopers in 2016 again to carry out a compensation benchmarking for the Board of Directors and the Group Executive Committee. The benchmarking includes a group of 18 companies, which are comparable in size, geographic reach and market profile. Dufry will periodically request such benchmarking from external advisors to update and, where necessary, adjust its compensation schemes to current market trends.

In 2016, the Board of Directors, upon proposal of the Remuneration Committee implemented the following changes to the Group Executive Committee compensation system:

  • The pay-out of the short-term annual bonus for the fiscal year 2015 was changed from 100% in cash to 50% in cash and 50% in rights to receive shares vesting after three years

  • Regarding the achievement of financial performance concerning the 2016 bonus, this will be measured with weightings of 50% EBITDA, 25% Free Cash Flow and 25% Synergies (2015 and earlier years: 100% EBITDA)

The Remuneration Committee regularly reviews the remuneration system, including the bonus scheme and long-term incentive plans (Performance Share Unit plans) to ensure alignment with shareholders’ interests and best practices, and to provide fair management compensation. 

2017 and 2018 will be important years for Dufry, as the full integration of the previous Nuance and WDF businesses will be completed and the new business operating model will be implemented in all operations. We will continue to evolve our compensation system according to the development of Dufry as a company as well as best practices and any regulatory or industry developments in relation to compensation.

On behalf of the Remuneration Committee and the Board of Directors, I would like to thank our shareholders for their contribution and the continued trust they put into Dufry.

Yours Sincerely,

Jorge Born
Chairman of the Remuneration Committee

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