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1、Corporate Governance Report 2019Compensation Report 2019Articles of Association of Nestl S.A.Amended by the Annual General Meeting of April 11,2019Corporate Governance Report 20191Corporate Governance Report 2019Corporate Governance Report 20192Situation at December 31,20191.Group structure and shar
2、eholders1.1 Group structure1.2 Significant shareholders1.3 Cross-shareholdings2.Capital structure2.1 Capital2.2 Conditional capital2.3 Changes in capital2.4 Shares and participation certificates2.5 Dividend-right certificates2.6 Limitations on transferability and nominee registrations2.7 Convertible
3、 bonds and options3.Board of Directors(1)3.1 Members of the Board of Directors3.2 Professional background and other activities and functions3.3 Mandates outside Nestl3.4 Elections and terms of office3.5 Internal organizational structure3.6 Definition of areas of responsibility3.7 Information and con
4、trol instruments vis-vis the Executive Board(2)4.Executive Board(2)4.1 Members of the Executive Board4.2 Professional background and other activities and functions4.3 Mandates outside Nestl4.4 Management contracts3461923242526 27282951(1)The full Board of Directors Regulations and Committee Charters
5、 are published on term Executive Committee,as used in the SIX Directive,is replaced by Executive Board throughout this document.5.Compensation,shareholdings and loans 6.Shareholders participation rights6.1 Voting rights restrictions and representation6.2 Quorums required by the Articles of Associati
6、on6.3 Convocation of the General Meeting of shareholders6.4 Inclusion of items on the agenda6.5 Entries in the share register7.Change of control and defence measures7.1 Duty to make an offer7.2 Clauses on change of control8.Auditors8.1 Duration of the mandate and term of office of the lead auditor8.
7、2 Auditing fees8.3 Additional fees8.4 Information instruments pertaining to the external audit8.5 Auditor rotation9.Information policy General Organization of Nestl S.A.Compensation Report 2019 Articles of Association of Nestl S.A.Corporate Governance Report 20193Group structure and shareholdersPrel
8、iminary remarksThe Nestl Corporate Governance Report 2019 follows the SIX Swiss Exchange Directive on Information relating to Corporate Governance.Additional information can be found in the Compensation Report.NestlS.A.complies with the recommendations of the Swiss Code of Best Practice for Corporat
9、e Governance,as in force at December 31,2019.To avoid duplication of information,cross-referencing to other reports is made in some sections,namely the Annual Review2019,the Financial Statements2019 that comprise the Consolidated Financial Statements of the Nestl Group and the Financial Statements o
10、f NestlS.A.,as well as the Articles of Association of NestlS.A.,whose full text can be consulted in this report(page 51)or on: Consolidated Financial Statements of the Nestl Group 2019 comply with the International Financial Reporting Standards(IFRS)issued by the International Accounting Standards B
11、oard(IASB)and with Swiss law.Where necessary,these disclosures have been extended to comply with the requirements of the SIX Swiss Exchange Directive on Financial Reporting.1.Group structure and shareholders1.1 Group structurePlease refer to the Annual Review2019,page70,for the overview of Directors
12、 and Officers.1.1.1 Description of Nestls operational group structureFor the general organization chart of NestlS.A.,refer to page28 of this document.The Groups Management structure is represented in the analysis by operating segments(refer to Note3 of the Consolidated Financial Statements of the Ne
13、stl Group 2019,page 81).1.1.2 All listed companies belonging to the Nestl groupThe registered offices of NestlS.A.are in Vevey and Cham(Switzerland).NestlS.A.shares are listed on the SIXSwiss Exchange in Switzerland(ISIN code:CH0038863350).At December 31,2019,the market capitalization of NestlS.A.wa
14、s CHF301 771 581 500.For further information see also page75 of the Annual Review2019 and visit our website on refer to the Consolidated Financial Statements of the Nestl Group2019,page154,for the list of publicly listed companies of the Nestl Group,with an indication of the company name,registered
15、office,share capital,place of listing,securities ISIN number,their market capitalization and the Companys participation.1.1.3 The non-listed companies belonging to the Nestl GroupPlease refer to the Consolidated Financial Statements of the Nestl Group 2019,page154,for the enumeration of companies of
16、 the Nestl Group,joint arrangements and associates,with an indication of the company name,registered office,share capital and the Companys participation.Corporate Governance Report 20194Capital structureGroup structure and shareholders1.2 Significant shareholdersBlackRock,Inc.,New York,announced mos
17、t recently on December 6,2019,holding,directly or indirectly,4.96%of NestlS.A.s share capital,and The Capital Group Companies,Inc.,Los Angeles,announced on October 30,2017,holding,directly or indirectly,3.55%of Nestl S.A.s share capital.As at December 31,2019,Nestl S.A.held 95 950 558 treasury share
18、s,representing 3.22%of its share capital including 88 858 659 shares repurchased under Nestl S.A.s share buyback program of CHF 20 billion completed on December 30,2019(refer to Note 19 of 2019 Financial Statements of Nestl S.A.).Apart from the foregoing,NestlS.A.is not aware of any other shareholde
19、r holding,as at December 31,2019,NestlS.A.shares in excess of 3%of the share capital.During 2019,the Company published on the electronic publication platform of the SIX Swiss Exchange 19 disclosure notifications pertaining to the holding of Nestl S.A.shares by BlackRock,Inc.,New York(the latest one
20、relating to the announcement mentioned above)and three disclosure notifications concerning the holding of its own shares.The details of these disclosure notifications can be accessed on the publication platform of the SIX Swiss Exchange following this link:www.six-exchange- respect to nominees,Chase
21、 NomineesLtd,London,was a registered NomineeN(refer to point2.6.3.below)of 364 933 310 shares,i.e.12.26%of the shares of the Company as at December 31,2019.At the same date,CitibankN.A.,London,as depositary for the shares represented by American Depositary Receipts,was the registered holder of 243 5
22、75 492 shares,i.e.8.18%of the shares of the Company.Also on December 31,2019,Nortrust NomineesLtd,London,was a registered Nominee N of 121 635 955 shares of the Company,representing 4.09%of the shares.1.3 Cross-shareholdingsThe Company is not aware of cross-shareholdings exceeding 5%of the capital o
23、r voting rights on both sides.2.Capital structure2.1 CapitalThe ordinary share capital of NestlS.A.is CHF297600000.The conditional share capital is CHF10000000.NestlS.A.does not have any authorized share capital.2.2 Conditional capitalThe share capital may be increased(without time limitation)in an
24、amount not to exceed CHF10000000 by issuing up to 100000000 registered shares with a nominal value of CHF0.10 each(representing 3.36%of the currently issued share capital)through the exercise of conversion rights and/or option rights granted in connection with the issuance by Nestl or one of its sub
25、sidiaries of newly or already issued convertible debentures,debentures with option rights or other financial market instruments.Thus the Board of Directors has at its disposal a flexible instrument enabling it,if necessary,to finance the activities of the Company through convertible debentures.For a
26、 description of the group of beneficiaries and of the terms and conditions of the issuance of conditional capital,refer to art.3bis of the Articles of Association of NestlS.A.(*)2.3 Changes in capitalThe share capital was reduced twice in the last three financial years as a consequence of a share bu
27、yback program of CHF 20 billion,launched on July 4,2017,and completed on December 30,2019.The resulting cancellations of shares were approved at the 2018 and 2019 Annual General Meetings.On April 12,2018,the Annual General Meeting resolved to reduce the share capital by 49 160 000 shares to CHF 306
28、300 000.On April 11,2019,the Annual General Meeting resolved to cancel 87 000 000 shares resulting in a reduction of the share capital to the present CHF 297 600 000.For the breakdown of capital(“equity”)for 2019,2018 and 2017 see the consolidated statement of changes in equity in the Consolidated F
29、inancial Statements of the Nestl Group 2019,page 71,and 2018,page 7172.( S.A.s Articles of Association can be found on page 51 and on Governance Report 20195Capital structure2.4 Shares and participation certificatesNestlS.A.s capital is composed of registered shares only.The number of registered sha
30、res with a nominal value of CHF0.10 each,fully paid up,was 2976000000 at December 31,2019.According to art.11 par.1 of the Articles of Association,each share recorded in the share register as a share with voting rights confers the right to one vote to its holder.See also point2.6.1 below.Shareholder
31、s have the right to receive dividends.There are no participation certificates.2.5 Dividend-right certificatesThere are no dividend-right certificates.2.6 Limitations on transferability and nominee registrations2.6.1 Limitations on transferability along with an indication of group clauses in the Arti
32、cles of Association and rules for granting exceptions According to art.5 par.5 of the Articles of Association,no person or entity shall be registered with voting rights for more than 5%of the share capital as recorded in the commercial register.This limitation on registration also applies to persons
33、 who hold some or all their shares through nominees pursuant to that article.Legal entities that are linked to one another through capital,voting rights,management or in any other manner,as well as all natural persons or legal entities achieving an understanding or forming a syndicate or otherwise a
34、cting in concert to circumvent the regulations concerning the limitation on registration or the nominees,shall be counted as one person or nominee(art.5 par.7 of the Articles of Association).The limitation on registration also applies to shares acquired or subscribed by the exercise of subscription,
35、option or conversion rights(art.5 par.10 of the Articles of Association).See also art.5 par.6 and par.9 of the Articles of Association and point2.6.3 below.2.6.2 Reasons for granting exceptions in the year under reviewPlease refer to points2.6.3 and 6.1.3 below.2.6.3 Admissibility of nominee registr
36、ations,indication of percent clauses and registration conditions Pursuant to art.5 par.6 and par.9 of the Articles of Association,the Board of Directors has issued regulations concerning the application of art.5 of the Articles of Association.The regulations on nominees set forth rules for the entry
37、 of nominees as shareholders in the share register.They allow the registration of:NomineesN(“N”as Name of beneficial owner disclosed):where trading and safekeeping practices make individual registration of beneficial owners difficult or impractical,shareholders may register their holdings through aN
38、omineeN with voting rights,subject to the specific understanding that the identity and holdings of beneficial owners are to be disclosed to the Company,periodically or upon request.Voting rights of Nominees are to be exercised on the basis of voting instructions received from the beneficial owners.F
39、or voting purposes,holdings of a NomineeN,or NomineesN acting as an organized group or pursuant to a common agreement,may not exceed 5%of the share capital of the Company.Holdings exceeding the 5%limit(respectively the limit fixed by the Board of Directors,see point6.1.3 below)are registered without
40、 voting rights.The responsibility for disclosure of beneficial owners and their holdings resides with the nominees registered in the share register.NomineesA(“A”as Anonymous beneficial owner):registration without voting rights.In line with its regulations,in order to facilitate trading of the shares
41、 on the Stock Exchange,the Board of Directors has authorized certain nominees to exceed the 5%limit to be registered as nominees with voting rights.2.6.4 Procedure and conditions for cancelling statutory privileges and limitations on transferability Please refer to point6.1.3 below.2.7 Convertible b
42、onds and optionsAs at December 31,2019,there are no outstanding convertible bonds or warrants/options issued by NestlS.A.or by subsidiaries on NestlS.A.shares.Corporate Governance Report 20196Board of Directors3.Board of Directors 3.1 Members of the Board of DirectorsNestls Board of Directors is hig
43、hly structured to ensure a high degree of diversity by age,gender,education/qualifications,professional background,present activity,sector expertise,special skills(classification),nationality and geography.This is reflected in Nestls skills and diversity grid disclosed here.NameYear of birthEducatio
44、n/Qualifications(a)Professional background1Paul Bulcke1954Economics and Business AdministrationChairman,Nestl S.A.2Ulf Mark Schneider1965Economics,Business Administration and Finance&AccountingCEO,Nestl S.A.3Henri de Castries(c)(d)1954HEC,Law and cole Nationale dAdministration(ENA)Former Chairman an
45、d CEO,AXA French Ministry,Government4Beat W.Hess1949Law,Swiss Attorney-at-lawLawyer,Former Legal Director,Royal Dutch Shell5Renato Fassbind1955Economics,Business Administration and Finance&AccountingFormer CFO,ABB and Credit Suisse Former CEO,Diethelm Keller Group6Ann M.Veneman1949Law,Public Policy
46、and Political Science Former Secretary,USDAFormer Executive Director,UNICEFLawyer7Eva Cheng1952Business Administration and HistoryFormer Amway China Chairwoman and EVP,Amway Corporation8Patrick Aebischer1954Medicine and NeurosciencePresident Emeritus,Swiss Federal Institute of Technology Lausanne(EP
47、FL)9Ursula M.Burns1958Mechanical EngineeringFormer Chairman,Xerox Corporation10Kasper B.Rorsted1962Business AdministrationCEO,Former general managementHenkel,Compaq/Hewlett Packard11Pablo Isla1964LawLawyer,Former State Attorney,Government SpainBanking,Banco Popular Espaa12Kimberly A.Ross1965Business
48、 Administration and Finance&AccountingFormer CFO,Baker Hughes,Avon Products,Royal Ahold NV13Dick Boer1957Business AdministrationFormer President and CEO,Ahold Delhaize NV14Dinesh Paliwal1957Engineering,Applied Sciences,Business AdministrationPresident and CEO,Harman International Industries Inc.,a s
49、ubsidiary of Samsung Electronics Co.,Ltd.(a)For more complete information on qualifications:please refer to section 3.2 and the individual CVs on Board members are elected annually in accordance with Swiss Corporate law and NestlS.A.s Articles of Association.(c)Vice Chairman(d)Lead Independent Direc
50、tor.The Lead Independent Director assumes the role of a prime intermediary between the Board and the Chairman.He regularly convenes and chairs Board meetings and“in camera”sessions where the Chairman is not present or conflicted.Corporate Governance Report 20197Board of DirectorsPresent functions/ma
51、ndates (listed companies)SectorClassificationNationalityFirst ElectionExpires(b)Chairman,Nestl S.A.Roche Ltd.LOral S.A.Food&BeveragesFMCG/CEOBelgian/SwissApril 10,20082020CEO,Nestl S.A.Food&BeveragesCEOGerman/USApril 06,20172020HSBC Holdings plcInsurance&FinanceInsurance/CEOFrenchApril 19,20122020Ch
52、airman,LafargeHolcim Ltd.Vice Chairman,Sonova Holding AGLegalLegalSwissApril 10,20082020Vice Chairman,Swiss Re AG Khne+Nagel International SAFinanceFinancial Management/CFOSwissApril 16,20152020Global Health Innovative Technology Fund,Full Harvest Technologies Inc.,Washington Institute for Business,
53、Government and Society,CHAI and various advisory mandatesGovernment/NGOsGovernment/NGOsUSApril 14,20112020Trinity Limited Haier Electronics Group Co.Ltd.Personal Care&NutritionFMCGChineseApril 11,20132020Lonza Group AGLogitech SAScienceScientistSwissApril 16,20152020Chairman&CEO,VEON Ltd.Exxon Mobil
54、 CorporationUber Technologies Inc.TechnologyInformation Systems/CEOUSApril 06,20172020CEO,adidas AGRetailTechnologyInformation Systems/FMCG/CEODanishApril 07,20182020Executive Chairman,InditexRetailFinance/Legal/FMCG/CEOSpanishApril 07,20182020Chubb Insurance GroupPQ CorporationFinancePersonal CareF
55、ood RetailOil&GasFinancial Management/FMCG/CFOUSApril 07,20182020Chairman,G-Star RAW CV SHV Holdings N.V.Food Retail DigitalFMCG/CEODutchApril 11,20192020Bristol-Myers Squibb Raytheon CompanyTechnology DigitalInformation Systems/CEOUS/IndianApril 11,20192020Corporate Governance Report 20198Board of
56、DirectorsBoard diversityThe working guidelines used for the selection of new Board members state that the Board of Directors should at all times be well-balanced,including with respect to Swiss and non-Swiss nationals,the members individual experiences,expertise,competencies and personal attributes(
57、so as to support regular succession planning for the Board as a whole and for its various Committees).The Nomination and Sustainability Committee periodically reviews the composition of the Board using various criteria,including,without limitation:the Boards cumulative experience and expertise in (i
58、nternational)business leadership,legal/compliance/risk management,science,finance,marketing,IT,technology,government/politics and other relevant fields;diversity of competencies including education,function,industry and geographic business experience;the Boards diversity of personal attributes inclu
59、ding gender,age,nationality,culture and leadership approach;the Boards general age and term limits.The Board should at all times be composed of:a majority of independent members;and members with the specific abilities or skills to serve on one or more of the various Board Committees.3.1.1 Management
60、 tasks of the members of the Board of DirectorsWith the exception of Ulf Mark Schneider,all members of the Board of Directors are non-executive members.PaulBulcke is active Chairman and has certain responsibilities for the direction and control of the Group with respect to Nestl Health Science and N
61、estls engagement with LOral.3.1.2 Information on non-executive members of the Board of DirectorsWith the exception of Paul Bulcke,all non-executive members of the Board of Directors are independent,were not previously members of the Nestl management and have no important business connections with Ne
62、stl.Pursuant to Nestls Board Regulations,a Director shall be considered independent,if he/she is not and has not been employed as an executive officer at the Company or any of its principal subsidiaries or as employee or affiliate of the Groups external auditor for the past three years and does not
63、maintain,in the sole determination of the Board,amaterial direct or indirect business relationship with the Company or any of its subsidiaries.Directors with immediate family members who would not qualify as independent shall not be considered independent,subject to a three-year cooling-off period.N
64、estls succession planning process is highly structured and managed by the Boards Nomination and Sustainability Committee with the support of outside consultants when necessary.Subject to specific exceptions granted by the Board,members are subject to twelve-year term limits.According to Nestls Board
65、 Regulations(a),an age limit of 72 years applies.This allows for continuous refreshment and long-term succession planning according to Nestls skills and diversity grid.3.1.3 Cross-involvementNone.(a)Nestl S.A.s Board Regulations can be found on Governance Report 20199Board of Directors3.2 Profession
66、al background and other activities and functions(*)(*)Paul BulckeChairmanPaul Bulcke began his career in 1977 as a financial analyst for Scott Graphics International in Belgium before moving to the Nestl Group in 1979 as amarketing trainee.From 1980 to 1996,he held various responsibilities in Nestl
67、Peru,Nestl Ecuador and Nestl Chile before moving back to Europe as Managing Director of Nestl Portugal,Nestl Czech and Slovak Republic,and Nestl Germany.In2004,he was appointed Executive Vice President,responsible for Zone Americas.In April 2008,Paul Bulcke was elected member of the Board of Directo
68、rs of NestlS.A.and the Board appointed him Chief Executive Officer(CEO).As of December 31,2016,Paul Bulcke relinquished his function as CEO remaining member of the Board of Directors.In April 2017,Paul Bulcke was elected Chairman of the Board of Directors of Nestl S.A.As a Nestl S.A.representative,h
69、e serves as Vice Chairman on the Board of LOral S.A.,France.Paul Bulcke is also a Board member of Roche HoldingLtd,Switzerland.In addition,he serves as Co-Chairman of the 2030 Water Resources Group(WRG)and is a member of the Board of Trustees of Avenir Suisse,Switzerland,the European Round Table of
70、Industrialists(ERT),Belgium,and the J.P.Morgan International Council.Ulf Mark SchneiderCEOMark Schneider started his career in 1989 with Haniel Group in Germany,where he held several senior executive positions.In 2001,he joined Fresenius Medical Care as Chief Financial Officer.He was CEO of Freseniu
71、s Group between 2003 and 2016.Since January2017,Mark Schneider has served as Chief Executive Officer(CEO)of Nestl S.A.In April 2017,MarkSchneider was elected member of the Board of Directors of NestlS.A.As a representative of Nestl,Mark Schneider serves as Co-Chairman of the Board of Directors of Ce
72、real Partners Worldwide S.A.,Switzerland.Furthermore,he is a member of the Board of the Consumer Goods Forum as well as of the World Economic Forum(WEF)Board of Trustees and its International Business Council.Henri de CastriesVice Chairman Lead Independent DirectorHenri de Castries started his caree
73、r in the French Finance Ministry Inspection Office,auditing government agencies from 1980 to 1984.In 1984,he joined the French Treasury Department.As of1989,he joined AXA Corporate Finance Division.Two years later,he was appointed Senior Executive Vice President for the Groups asset management,finan
74、cial and real-estate business.Henri de Castries was Chairman of the AXA Management Board from May 2000 to April 2010.Since April 2010,following a modification of the corporate governance structure,he was Chairman and CEO of AXA,functions he relinquished in 2016.In March 2016,Henri de Castries joined
75、 the Board of HSBC Holdings plc.and he serves on the Board of Argus Media since June 2018.Beat W.HessBeat Hess started his career in 1977 atBBC Brown BoveriLtd in Baden as Legal Counsel where he was promoted to General Counsel in 1986.From 1988 to 2003,he was Senior Group Officer,General Counsel and
76、 Secretary for ABBLtd in Zurich.From 2003 until his retirement in January 2011,Beat Hess was Group Legal Director and a member of the Group Executive Committee of Royal Dutch Shellplc,The Hague,The Netherlands.Beat Hess is Chairman of LafargeHolcimLtd.and ViceChairman of Sonova HoldingAG,Switzerland
77、.He is also amember of the Curatorium of The Hague Academy of International Law.(*)Mandates and functions are listed in the following order:(1)mandates in listed companies,(2)mandates in non-listed companies,(3)mandates held at the request of Nestl or companies controlled by it,(4)mandates held in a
78、ssociations,charitable organizations,foundations,trusts and employee welfare foundations.(*)For information on former members of the Board of Directors see page 33 and Governance Report 201910Board of DirectorsRenato FassbindRenato Fassbind started his career in1982 as Managing Director of KunzConsu
79、ltingAG.From 1984 until 1990,he was Auditor and ultimately Head of Internal Audit at F.Hoffmann-La RocheAG.RenatoFassbind then joined ABBLtd and served between 1990 and 1997 as Head of Corporate Staff Audit,and then as CFO and member of the Executive Board from 1997 to 2002.Subsequently,he joined Di
80、ethelm Keller HoldingAG as CEO from 2002 to 2004.He joined Credit Suisse GroupAG as CFO and member of the Executive Board from 2004 until 2010.Currently,Renato Fassbind serves as Vice Chairman and Lead Independent Director of the Board of Directors of Swiss ReAG,he is also the Chairman of its Audit
81、Committee and a member of its Compensation Committee.Furthermore,Renato Fassbind serves on the Board of Khne+Nagel InternationalAG and is a member of its Audit Committee.Ann M.VenemanAn attorney by training,Ann M.Veneman was Secretary of the United States Department of Agriculture(USDA)from 2001 to
82、2005.She then served afive-year term as the Executive Director of the United Nations Childrens Fund.Earlier in her career she practiced law and was in various positions in the USDA.She also served four years as the Secretary of the California Department of Food and Agriculture.She is currently amemb
83、er of the Boards of Full Harvest Technologies Inc.,the Global Health Innovative Technology Fund,the Clinton Health Access Initiative and The Washington Institute for Business,Government and Society.Ann M.Veneman is on a number of advisory boards including KDC Ag,Memphis Meats,Perfect Day,TerraVesco,
84、Ukko,JUST Capital and BRAC.She is a member of the Council on Foreign Relations.In addition,Ann M.Veneman is a member of the Hilton Humanitarian Prize Jury.In 2009,she was named to Forbes The Worlds 100 Most Powerful Women list,and she has been the recipient of numerous awards and honors throughout h
85、er career.Ann M.Veneman also serves as member of the Nestl CSV(Creating Shared Value)Council.Eva ChengEva Cheng joined Amway Corporation a US-based global consumer product company in 1977 as an Executive Assistant in Hong Kong and moved to become Corporate Executive Vice President in 2005 responsibl
86、e for Greater China and Southeast Asia Region,a position she held until her retirement in 2011.EvaCheng is most well-known for leading Amways entry into China in 1991.She also held Amway Chinas Chairperson and CEO position since market launch until her retreat in 2011.In 2008 and 2009,Eva Cheng was
87、twice named to Forbes The Worlds 100 Most Powerful Women list.She has also received numerous awards and honors for her business leadership and community service.Presently,Eva Cheng serves as Independent Non-Executive Director on the Boards of Trinity Limited and Haier Electronics Group Co.Ltd.in Hon
88、g Kong,China.She is also the Executive Director of the Our Hong Kong Foundation,aDirector of China Children and Teenagers Foundation and a Council Member of the Hong Kong Academy of Performing Arts.Patrick AebischerPatrick Aebischer was trained as anMD and neuroscientist at the University of Geneva
89、and the University of Fribourg,Switzerland.He is a Professor of neurosciences at the Brain Mind Institute EPFL.From 1984 to 1992,he worked at Brown University,USA,as Research Scientist,Assistant and then Associate Professor of Medical Sciences.In 1992,he returned to Switzerland as aProfessor and Dir
90、ector of Surgical Research Division and Gene Therapy Center at the University Hospital of Lausanne(CHUV).From 2000 to end2016,Patrick Aebischer was the President of the Swiss Federal Institute of Technology Lausanne(EPFL).Furthermore,Patrick Aebischer is founder of three start-ups:CytoTherapeutics I
91、nc.(1989),Modex Therapeutics Inc.(1996)and AmazentisSA(2007).Currently,he is Vice Chairman of Lonza GroupLtd,serves as a Board member of Logitech International S.A.and is Chairman of Novartis Bioventures AG.Furthermore,Patrick Aebischer is a senior partner of NanoDimension-III and is a member of the
92、 Foundation Boards of the Verbier Festival and the Montreux Jazz Festival.Corporate Governance Report 201911Board of DirectorsIn addition,Patrick Aebischer serves as Vice Chairman on the Geneva Science and Diplomacy Anticipator Foundation,Switzerland.Ursula M.BurnsUrsula M.Burns joined Xerox in 1980
93、 and advanced through engineering and manufacturing functions to leadership positions in manufacturing,operations and product development.She was Chairman of the Board of the Xerox Corporation from 2010 to 2017 and CEO from 2009 to 2016.Ursula M.Burns was appointed as Chairman of the Board of VEON L
94、td.in June 2017 and CEO since December 2018.She also serves on the Boards of Exxon Mobil Corporation and Uber Technologies Inc.,USA.Furthermore,Ursula M.Burns also provides leadership counsel to various community,educational and non-profit organizations including the Massachusetts Institute of Techn
95、ology,NAF(National Academy Foundation),the Mayo Clinic and the Ford Foundation as well as the New York Ballet,the Cornell Tech Board of Overseers and The High Line.Ursula M.Burns is a member of the National Academy of Engineering and the American Academy of Arts and Sciences.Kasper B.RorstedKasper R
96、orsted started his career in sales and marketing positions within Oracle and Digital Equipment Corporation.From 1995,he held various international management positions at Compaq and from 2001 was General Manager for the companys Europe,Middle East&Africa(EMEA)business.In 2002,Compaq merged with Hewl
97、ett Packard.Between 2002 and 2004,Kasper Rorsted was Senior Vice President and General Manager at Hewlett Packard,where he last headed the EMEA business.In April 2005,he joined Henkel as Executive Vice President Human Resources,Purchasing,Information Technologies and Infrastructure Services.In2007,h
98、e was Vice Chairman of the Henkel Management Board.As of April 2008 until 2016,he held the position of CEO.In August 2016,Kasper Rorsted joined the Executive Board of adidas AG and became its CEO in October 2016.Pablo IslaFrom 1988 to 1991,Pablo Isla was aSpanish State Attorney at the Ministry of Tr
99、ansport,Tourism and Communication.From 1992 to 1996 he was Group General Counsel for Banco Popular Espaol.In 1996,Pablo Isla was appointed General Manager for the National Heritage Department of the Treasury Ministry,Government of Spain.In 1998,he rejoined the Banco Popular Espaol as General Secreta
100、ry.From 2000 to 2005,Pablo Isla was Co-Executive Chairman of Altadis Group,Spain.In 2005,he was named CEO and Deputy Chairman of Inditex S.A.,Spain,and was appointed Executive Chairman of the company in 2011.From 2003 until 2017,he served as Independent Director of the Spanish telecom company,Telefo
101、nica S.A.Kimberly A.RossKimberly A.Ross started her finance career at the Anchor Glass Container Corporation,USA,in 1992.In 1995,she joined Joseph E.Seagram&Sons Inc.,USA,where she held a number of management positions.In 2001,Kimberly A.Ross joined Ernst&Young Global Limited,USA,as a Senior Manager
102、.In the same year,she joined Royal Ahold NV,Netherlands,and advanced through a series of successively responsible positions in treasury,tax and finance before her appointment as CFO in 2007.From 2011 until 2014,Kimberly A.Ross served as CFO and Executive Vice President of Avon Products Inc.,USA.She
103、served as CFO and Senior Vice President at Baker Hughes LLC,USA,from 2014 until 2017.Kimberly A.Ross is also a member of the Boards of both Chubb Limited,Switzerland,and PQ Corporation,USA.Corporate Governance Report 201912Board of DirectorsDick BoerDick Boer spent more than 17 years in various reta
104、il positions for SHV Holding N.V.and Unigro N.V.in the Netherlands.Thereafter he became CEO of Ahold Czech Republic in 1998,and subsequently President and CEO of Albert Heijn B.V.,Netherlands,from 2000 to 2010.From 2006 to 2011,he held the position of Chief Operating Officer of Ahold Europe and from
105、 2011 to 2016,Dick Boer was president and CEO of Ahold N.V.From 2016 until his retirement in 2018,he was President and CEO of Ahold Delhaize N.V.Currently,Dick Boer serves as Chairman of the Advisory Board of G-Star RAW CV and the Rijksmuseum Fonds,Netherlands.He is also a member of the Supervisory
106、Board of the Royal Concertgebouw,Netherlands,as well as a non-executive Board member of SHV Holdings N.V.,Netherlands.Dinesh PaliwalDinesh Paliwal began his career in various technical and management roles in the ABB Group for 22 years.He then became President Global markets and Technology of ABB Lt
107、d.In 2007,Dinesh Paliwal joined Harman International Industries Inc.,USA,as Chairman and CEO and as from 2017,he is President and CEO of Harman International Industries Inc.,USA since then a subsidiary of Samsung Electronics Co.,Ltd.Furthermore,Dinesh Paliwal serves on the Boards of Bristol-Meyers S
108、quibb and Raytheon Company,USA.He is also a member of the Business Roundtable,Washington and of the Board of the U.S.-India Business Council(USIBC).3.3 Mandates outside NestlPursuant to art.21sexies of the Articles of Association,no member of the Board of Directors may hold more than 4additional man
109、dates in listed companies and 5additional mandates in non-listed companies.The following mandates are not subject to these limitations:a)mandates in companies which are controlled by Nestl;b)mandates which a member of the Board of Directors holds at the request of Nestl or companies controlled by it
110、.No member of the Board of Directors shall hold more than 10 such mandates;andc)mandates in associations,charitable organizations,foundations,trusts and employee welfare foundations.No member of the Board of Directors shall hold more than 10 such mandates.Mandates shall mean mandates in the supreme
111、governing body of a legal entity which is required to be registered in the commercial register or a comparable foreign register.Mandates in different legal entities which are under joint control are deemed one mandate.The Board of Directors has promulgated regulations that determine additional restr
112、ictions.All members of the Board of Directors comply with the provisions set out in art.21sexies.3.4 Elections and terms of officePursuant to art.6 par.2 of the Articles of Association,the General Meeting has the competence to elect and remove the members of the Board of Directors.The Chairman of th
113、e Board of Directors,the members of the Board of Directors and the members of the Compensation Committee are elected individually by the General Meeting for a term of office until completion of the next Annual General Meeting(art.15 of the Articles of Association).Members of the Board of Directors w
114、hose term of office has expired are immediately eligible for re-election.The Board of Directors elects one or two Vice Chairmen and the members of the Committees other than the Compensation Committee.The term of office of a Board member shall expire no later than at the Annual General Meeting follow
115、ing the members 72nd birthday.Rules in the Articles of Association reflect the statutory legal provisions with regard to the appointment of the Chairman,the members of the Compensation Committee and the independent proxy.For the principles of the selection procedure,see points3.1.2 above and 3.5.2 b
116、elow.For the time of first election and term of office,see point3.1 above.Corporate Governance Report 201913Board of Directors(a)For complete information please refer to the Board Regulations and Committee Charters on Internal organizational structure3.5.1 Allocation of tasks within the Board of Dir
117、ectorsChairmans and Corporate Governance CommitteeCompensation CommitteeNomination and Sustainability CommitteeAudit CommitteePaul Bulcke Chairman(Chair)Ulf Mark Schneider CEOHenri de Castries Vice Chairman Lead Independent Director(Chair)Beat W.Hess(Chair)Renato Fassbind(Chair)Ann M.VenemanEva Chen
118、gPatrick AebischerUrsula M.BurnsKasper B.RorstedPablo IslaKimberly A.RossDick BoerDinesh Paliwal3.5.2 Tasks and area of responsibility for each Committee ofthe Board of Directors(a)The powers and responsibilities of each Committee are established in the applicable Committee Charter,which isapproved
119、by the Board.Each Committee is entitled to engage outside counsel.After each Committee meeting,its Chairman reports to the full Board.Chairmans and Corporate Governance CommitteeThe Chairmans and Corporate Governance Committee consists of the Chairman,the Vice Chairman and Lead Independent Director,
120、the CEO(Administrateur dlgu)and any other member elected by the Board.It liaises between the Chairman and the full Board of Directors in order to act as a consultant body to the Chairman and to expedite whenever necessary the handling of the Companys business.The Committee regularly reviews the corp
121、orate governance of the Company and prepares recommendations for the Board.It also advises on certain finance-related matters including the Companys financing and financial management and periodically reviews its asset and liability management.While the Committee has limited authority as per the Boa
122、rd Regulations,it may in exceptional and urgent matters deal with business matters which might arise between Board meetings.In all cases it keeps the Board fully appraised.It reviews the Boards annual work plan.Compensation CommitteeThe Compensation Committee consists of a minimum of three non-execu
123、tive members of the Board.All members are independent(art.19bis par.1 of the Articles of Association).The members of the Compensation Committee are elected individually by the General Meeting for a term of office until completion of the next Annual General Meeting.Members of the Compensation Committ
124、ee whose term of office has expired are immediately eligible for re-election.The Compensation Committee determines the system and principles for remuneration of the members of the Board of Directors and submits them to the Board for approval.It oversees and discusses the remuneration principles for
125、NestlS.A.and the Nestl Group.It prepares the proposals of the Board to be submitted for approval by the General Meeting in relation to the compensation of the Board of Corporate Governance Report 201914Board of DirectorsDirectors and the Executive Board.In addition,it proposes the remuneration of th
126、e Chairman and the CEO,and approves the individual remuneration of the members of the Executive Board.It reports on its decisions to the Board and keeps the Board updated on the overall remuneration policy of the Nestl Group.It reviews the annual Compensation Report.Nomination and Sustainability Com
127、mitteeThe Nomination and Sustainability Committee consists of aChairperson,who is an independent and non-executive member of the Board,preferably the Lead Independent Director;the other members are the Chairman of the Board of Directors and a minimum of two independent and non-executive members of t
128、he Board.The Nomination and Sustainability Committee oversees the long-term succession planning of the Board,establishes the principles and criteria for the selection of candidates to the Board,performs a regular gap analysis,selects candidates for election or re-election to the Board and prepares a
129、 proposal for the Boards decision.It is regularly supported by external search firms.The succession planning for the Board of Directors is highly structured and seeks to ensure a balance of relevant competencies and an appropriate diversity of its members over time.The Nomination and Sustainability
130、Committee regularly reviews the Companys skills and diversity grid (see 3.1.above).It ensures an appropriately wide net is cast on key successions.The candidates to the Board must possess the necessary profile,qualifications and experience to discharge their duties.Newly appointed Board members rece
131、ive an appropriate introduction into the business and affairs of the Company and the Group.If required,the Nomination and Sustainability Committee arranges for further training.The Nomination and Sustainability Committee reviews,at least annually,the independence of the members of the Board as well
132、as their outside mandates,and prepares the annual self-evaluation of the Board and its Committees.Importantly,we have expanded the role of our Nomination and Sustainability Committee to oversee all aspects of our environmental,social and governance performance.It reviews reports and gives advice on
133、measures which ensure the long-term sustainability of the Company in its economic,social and environmental dimension(including its response to climate change and related reporting)and monitors the Companys performance against selected external sustainability indexes.It reviews the Companys commitmen
134、ts on environmental,social and governance aspects as well as the annual Nestl in society report and discusses periodically how other material non-financial issues affect the Companys financial performance and how its long-term strategy relates to its ability to create shared value.It reviews as well
135、 the Companys shareholder base and other significant stakeholders and their material interests.It meets as frequently as necessary to fulfil its tasks and prepares the relevant in camera sessions of the Board of Directors.Audit CommitteeThe Audit Committee consists of a Chairperson,who is anindepend
136、ent and non-executive member of the Board,and a minimum of two other non-executive members of the Board,excluding the CEO(Administrateur dlgu)and any former member of the Executive Board.All members shall be independent.At least one member has to have recent and relevant financial expertise,the othe
137、rs must be familiar with the issues of accounting and audit.In discharging its responsibilities,the Audit Committee has unrestricted access to the Companys management,books and records.The Audit Committee supports the Board of Directors in its supervision of financial controls through a direct link
138、to the external auditors(KPMG)and Nestl Internal Audit(corporate internal auditors).The Audit Committees main duties include the following:to review,and challenge where necessary,the actions and judgements of management,in relation to the Companys year-end financial accounts;to make recommendations
139、to the Board of Directors regarding the nomination of external auditors to be appointed by the shareholders;to discuss the audit procedures,including the proposed scope and the results of the internal and external audit;to keep itself regularly informed on important findings of the audits and of the
140、ir progress;to oversee the quality of the internal and external auditing;to present the conclusions on the approval of the Financial Statements to the Board of Directors;to review certain reports regarding internal controls,compliance and the Groups annual risk assessment.The Audit Committee regular
141、ly reports to the Board on its findings and proposes appropriate actions.The responsibility for approving the annual Financial Statements remains with the Board of Directors.Corporate Governance Report 201915Board of Directors3.5.3 Work methods of the Board of Directors and its CommitteesThe Board m
142、eets as often as necessary,at least quarterly,and on notice by the Chairman or by the person designated by him.In addition,the Board must be convened as soon as a Board member requests the Chairman to call a meeting.All Committees provide a detailed report to the full Board at each meeting in a dedi
143、cated Chairmans session.The Board regularly meets for in camera sessions(without CEO)and independent director meetings(without Chairman and CEO).The Board reserves at least one day per year to discuss the strategic long-term plan of the Company.In addition,every year the Board visits one operating c
144、ompany for three to five days(in 2019,Nestl in Switzerland).The average attendance at the Board meetings in 2019 was 94%.All Board members attended all Committee meetings.The Company would individually disclose each member of the Board of Directors with an attendance rate of less than 75%and will in
145、dividually disclose director attendance as from 2020.All Board meetings,with the exception of certain Chairmans and incamera sessions,are attended by all members of the Executive Board.In addition,members of the Executive Board and senior management participate in Committee meetings,if appropriate,w
146、hen a Committee discusses matters in relation to their respective responsibilities.The CEO may partially attend the meetings of the Audit Committee,the Nomination and Sustainability Committee and the Compensation Committee as an invited guest,except on matters where he may have a conflict of interes
147、t.Furthermore,both the external auditor and the Head of Nestl Internal Audit participate in the Audit Committee meetings except for regular in camera sessions.No external subject matter experts were invited to the Board and Committee meetings in 2019.The Company performs annual self-evaluations of t
148、he Board and its Committees including confidential,anonymous feedback and individual interviews.Findings are appropriately addressed.For example,in 2019 the Board committee structure and reporting were reviewed and a new Science&Technology Advisory Council was introduced.The purpose of this Council
149、is to give specific advice with the aim of identifying actions that will strengthen our Science and Technology roadmaps,support the translation into innovation pipelines of the different businesses,and facilitate deployment.In particular,it reviews strategic research programs and technological devel
150、opments across the Company and discusses how to best translate new scientific findings and cutting-edge technologies into business relevant innovations.An open,transparent and critical board room culture forms the basis for the Board of Directors annual review of its own performance and effectivenes
151、s.The Board of Directors conducts the self-assessment on the basis of anonymous questionnaires which deal with the Boards composition,organization and processes,the Boards responsibilities governed by the Board Regulations as well as the focus areas and goals of the year under review.The topics are
152、discussed and take-aways defined to be incorporated in the goals for the upcoming year.In addition,each Board Committee annually reviews the adequacy of its composition,organization and processes as well as the scope of its responsibilities,assesses its accomplishments and evaluates its performance.
153、3.5.4 Lead Independent DirectorThe Lead Independent Director assumes the role of a prime intermediary between the Board and the Chairman.He may convene and chair Board meetings and in camera sessions,where the Chairman is not present.He serves as an advisor to the Chairman and acts as an intermediar
154、y between the Chairman,the Board and the Boards stakeholders.He chairs meetings of the independent directors to evaluate the performance of the Chairman and the effectiveness of the relationship between the Chairman and the CEO.Meetings held in 2019FrequencyAverage duration(hours)Board of Directors
155、of NestlS.A.9 times3:30Chairmans and Corporate Governance Committee7 times3:30Compensation Committee3 times1:10Nomination and Sustainability Committee5 times1:00Audit Committee5 times2:55Corporate Governance Report 201916Board of Directors3.6 Definition of areas of responsibilityThe governing bodies
156、 have responsibilities as follows:3.6.1 Board of Directors(1)The Board of Directors is the ultimate governing body of the Company.It is responsible for the long-term strategy and the ultimate supervision of the Group.It oversees the Groups economic,social and environmental sustainability.The Board a
157、ttends to all matters which are not reserved for the Annual General Meeting or another governance body of the Company by law,the Articles of Association or specific regulations issued by the Board of Directors.Under Nestls governance model,the CEO(Administrateur dlgu)is a full member of the Board of
158、 Directors,ensuring full alignment on its critical responsibilities and proper checks and balance between Chairman and CEO.The Board has the following main duties:a)the ultimate direction of the Company,in particular the conduct,management and supervision of the business of the Company,and the provi
159、sion of necessary directions;b)the determination of the Companys organization;c)the determination of accounting and financial control principles,as well as the principles of financial planning;d)the appointment and removal of any Vice Chairman,the Committee members(except the members of the Compensa
160、tion Committee)and their Chairmen and members of the Executive Board;e)the ultimate supervision of the Chairman and the members of the Executive Board,in particular with respect to their compliance with the law,the Articles of Association,the Board Regulations and instructions given from time to tim
161、e by the Board;f)the preparation of the Annual Report including the Compensation Report as well as the General Meetings and execution of their resolutions;g)the notification of the court in the event of over indebtedness;h)the discussion and approval of:the Groups long-term strategy and annual inves
162、tment budget;major financial operations;any significant policy issue dealing with the Companys or the Groups general structure or with financial,commercial and industrial policy;Corporate Governance Principles of the Company;the review of and decision on any report submitted to the Board;the Groups
163、annual risk assessment;and the compensation proposals to the General Meeting.3.6.2 Executive BoardThe Board of Directors delegates to the CEO,with the authorization to subdelegate,the power to manage the Companys and the Groups business,subject to law,the Articles of Association and the Board Regula
164、tions.The CEO chairs the Executive Board and delegates to its members individually the powers necessary for carrying out their responsibilities,within the limits fixed in the Executive Board Regulations.3.7 Information and control instruments vis-vis the Executive BoardThe Board of Directors is,at e
165、ach of its meetings,informed on material matters involving the Companys and the Groups business.Except for regular in camera sessions,the members of the Executive Board attend the Board of Directors meetings and report on current developments,significant projects and events.Other members of manageme
166、nt attend Board meetings to report on areas of the business for which they are responsible.Each Board member is entitled to request and receive information from the CEO and from other members of the Executive Board.In preparation for each Board meeting,the Board is provided with an overview of busin
167、ess performance and consolidated financial information.In addition,regular written reports by the Executive Board are provided,including e.g.capital investment,risk,audit,compliance and strategy progress reports.The Chairman and the CEO ensure the proper information flow between the Executive Board
168、and the Board of Directors.The Board pays a visit to a major market every year,where it meets members of senior management.The Board visited the U.S.and the Swiss Market in 2018 and 2019,respectively.The Chairman receives the agenda,documents and minutes of the meetings of the Executive Board as wel
169、l as of the key markets and senior management meetings.He has regular meetings with the CEO and may request information about any matters relating to the Company.He may examine reports,proposals and minutes of meetings of any functions or committees of the Corporate Center or the markets or business
170、es.(1)For complete information,please refer to the Board Regulations and Committee Charters on Governance Report 201917Board of DirectorsThe Chairmans and Corporate Governance Committee is regularly informed about the strategic management of the Groups financial assets and liabilities and financial
171、risk policies.It performs twice a year a review of the assets and liabilities management by the Companys treasury,pensions and insurance departments with the Chief Financial Officer and the Head of Treasury,Pensions&Insurance being present.The Audit Committee reviews the financial performance and as
172、sesses the effectiveness of the internal and external audit processes as well as the internal risk management organization and processes.It reviews the reports on the effectiveness of the systems for internal control and on the performance of the annual risk assessment at least once a year.It also r
173、eviews managements reports on the companys compliance and risk management processes.It has complete and unrestricted access to the Companys management,books and records and may obtain any information it requires from the appropriate services.Members of the Executive Board and other senior management
174、,in particular the Heads of Group Accounting&Reporting,Internal Audit and Legal and Compliance,attend the Audit Committee meetings,except for certain in camera sessions.The Nomination and Sustainability Committee reviews reports on measures that ensure the long-term sustainability of the Company in
175、its economic,social and environmental dimension.It monitors the Companys performance against selected external sustainability indexes and reviews the annual Nestl in society report.It regularly discusses how other material non-financial issues affect financial performance and how the Companys long-t
176、erm strategy relates to its ability to create shared value.The Compensation Committee reviews the Companys compensation system and principles.The Head of Human Resources is invited to the meetings,except when questions of compensation for Executive Board members are deliberated.Additional informatio
177、n and control instruments include the external auditors,KPMG,auditors of Nestl S.A.and of the Consolidated Financial Statements of the Nestl Group,who conduct their audit in compliance with Swiss law and in accordance with Swiss Auditing Standards and International Standards on Auditing,and the Nest
178、l Internal Audit function.Nestl Internal Audit comprises an organisation of one Center Team and eleven Regional units of auditors covering all the businesses(i.e.head offices,factories,distribution centers and business units)worldwide,completing audit assignments on the basis of the annual internal
179、audit plan based on an independent risk assessment that is approved by the Audit Committee.The role of Nestl Internal Audit is to enhance and protect organisational value by providing risk-based and objective assurance,advice and insight,contributing to the continuous improvement of the Companys ris
180、k management and control systems.Nestl Internal Audit assesses the reliability of financial and operational information,the effectiveness of controls and processes for compliance with internal,legal,regulatory and statutory requirements.Any findings are communicated in the form of an audit report,wh
181、ich is shared with management and the Audit Committee.The Head of the Nestl Internal Audit reports administratively to the Chief Financial Officer and has a functional reporting line to the Chairman of the Audit Committee.He reports at all the Audit Committee meetings,has direct access to the Chairm
182、an of the Audit Committee and regularly meets with him for interim updates.The Audit Committee regularly receives a report on the results of the internal auditors work that is also provided to the Chairman of the Board of Directors,Executive Board members and other stakeholders.It reviews and monito
183、rs managements responsiveness to internal audit findings and recommendations.In case of major findings,a follow-up audit is planned to ensure proper remediation.Group Risk Management provides assistance to all corporate entities with regard to risk management.Group Risk Services provides assistance
184、to all corporate entities with regard to loss prevention,claims handling and insurance.Enterprise Risk Management(ERM)is a process applied across the Group,designed to identify potential events that may affect the Groups achievement of its strategic objectives and support the Group to ensure it acts
185、 in accordance with external regulations and internal policies.It supports Nestls management to raise risk awareness and to anticipate emerging risks,as well as the process of identifying appropriate mitigation actions.The Nestl Group adopts a dual approach using“Top-Down”and“Bottom-Up”assessments.T
186、he“Top-Down”assessment occurs annually and focuses on the Groups global risks.A“Bottom-up”assessment occurs in parallel resulting in the aggregation of individual assessments by all Markets,Regionally and Globally Managed Businesses.Additionally,Nestl engages with external stakeholders to better und
187、erstand the issues that are of most concern to them.For each issue,the materiality matrix(reported in the Annual Review 2019,please refer to page 47)rates the degree of stakeholder concern and potential business impact.Corporate Governance Report 201918Board of DirectorsGroup ERM combines the output
188、 of the“Top-Down”assessment,the“Bottom-Up”assessments and the external stakeholder assessments which is presented annually to the Executive Board.The Annual Risk Report is reviewed by the Audit Committee,and material risks are reviewed by the Board of Directors on an annual basis.For more informatio
189、n on the Nestl Group Enterprise Risk Management,please refer to page 62 of the Annual Review 2019.Group Compliance and other risk-and control-related functions provide additional guidance and oversight.Risk and compliance activities are coordinated through the Group Compliance Committee to ensure a
190、holistic,entity-wide approach.The Audit Committee is provided yearly with the Group Compliance Report,a comprehensive documentation of the Companys compliance framework,systems,activities and improvement actions pursued by the various functions.It includes a summary of the feedback received on the G
191、roups internal and external integrity reporting systems as well as the functional compliance audits(CARE)through external auditors.The Group Compliance Report is also reviewed by the Board of Directors.For more information on the Groups Governance and Compliance program,please refer to page 69 and 7
192、4 of the Annual Review 2019.Corporate Governance Report 201919Executive Board4.Executive Board4.1 Members of the Executive Board(December 31,2019)NameYear of birthNationalityEducation/Current functionUlf Mark Schneider1965German/USEconomics,Business Administration and Finance&AccountingCEO:Nestl S.A
193、.Laurent Freixe1962FrenchBusiness AdministrationEVP&CEO:Zone AmericasChris Johnson1961US/SwissEconomics and Business AdministrationEVP&CEO:Zone Asia,Oceania and sub-Saharan AfricaPatrice Bula1956SwissEconomics and Business AdministrationEVP:Strategic Business Units,Marketing,Sales and NespressoMarco
194、 Settembri1959ItalianBusiness AdministrationEVP&CEO:Zone Europe,Middle East and North AfricaFranois-Xavier Roger1962FrenchBusiness Administration and Finance&Accounting EVP:CFO(includes Finance and Control,Tax,Treasury,Investor Relations)Magdi Batato1959SwissMechanical Engineering and PhD in Thermod
195、ynamicsEVP:OperationsStefan Palzer1969GermanPhD-Professorships Process Engineering,Food Technology,Industrial Engineering and Chemical EngineeringEVP:Chief Technology Officer:Innovation,Technology and R&DBatrice Guillaume-Grabisch1964FrenchBusiness AdministrationEVP:Group Human Resources&Business Se
196、rvicesLeanne Geale1965CanadianLawEVP:General Counsel,Corporate Governance and ComplianceMaurizio Patarnello1966ItalianBusiness AdministrationDeputy EVP:Nestl WatersGrgory Behar1969SwissMechanical Engineering and Business AdministrationDeputy EVP&CEO:Nestl Health Science(EVP:Executive Vice President;
197、CEO:Chief Executive Officer)For complete information,please refer to individual CVs on Governance Report 201920Executive Board4.2 Professional background and other activities and functions(*)(*)Ulf Mark SchneiderPlease refer to point 3.2 above.Laurent FreixeLaurent Freixe joined Nestl France in 1986
198、 as a sales representative and got increasing responsibilities in the field of sales and marketing.In 1999,he became a member of the Management Committee and was nominated Head of the Nutrition Division.In 2003,Laurent Freixe became Market Head of Nestl Hungary.In January 2007,he was appointed Marke
199、t Head of the Iberian Region taking responsibility for Spain and Portugal.From November 2008 to October 2014,Laurent Freixe served as Executive Vice President in charge of Zone Europe.Effective October 2014,he was appointed Executive VicePresident for Zone Americas.As a representative of Nestl,he is
200、 a member of the Board of Directors of Cereal Partners WorldwideS.A.,Switzerland,and of the Regional Board of Directors of the Consumer Goods Forum in Latin America.Since June 2019,he is Chairman of the Global Apprenticeship Network(GAN).Laurent Freixe has been named International Youth Ambassador b
201、y the International Youth Organization for Ibero-America.Chris JohnsonChris Johnson started his career with Nestl in 1983 as a marketing trainee at Carnation Inc.During his first eight years,he took on increasing responsibilities mainly in the commercial area at NestlUSA and then,from 1991,in Japan.
202、Senior Area Manager for the Asian region of Nestl Waters in Paris from 1995,he was then transferred to Taiwan in 1998 as Market Head.From 2000,Chris Johnson led the worldwide development and implementation of GLOBE(Global Business Excellence;IS/IT),the Strategic Supply Chain as well as eNestl.He was
203、 appointed Deputy Executive Vice President in April 2001,and later moved back to Japan in 2007 as Market Head.From January 2011 to October 2014,Chris Johnson was Executive Vice President responsible for Zone Americas.Effective October 2014,he was appointed Executive VicePresident of NestlS.A.in char
204、ge of Nestl Business Excellence.From August 2018 to end December 2018,Chris Johnson was appointed Head of Group Human Resources&Business Services in addition to his responsibilities for Nestl Business Excellence.Effective January 2019,he was appointed Executive VicePresident for Zone Asia,Oceania an
205、d sub-Saharan Africa.As a representative of Nestl,Chris Johnson serves on the Board of Blue Bottle Coffee Inc.,USA.Chris Johnson is also Treasurer of the Swiss-American Chamber of Commerce.Patrice BulaPatrice Bula joined Nestl S.A.in 1980 and was entrusted with various responsibilities in Marketing
206、and Sales in Kenya,Japan and Taiwan before being promoted to Market Head for Taiwan in 1992,Market Head for Czech Republic in 1995,then Head for the South and Eastern Africa Region in 1997.In 2000,he was appointed Head of Chocolate,Confectionery and Biscuits Strategic Business Unit based at Nestls I
207、nternational Headquarters in Vevey.In October 2003,Patrice Bula was transferred as Market Head of Nestl Germany and in August 2007 he took up the role as Market Head for the Greater China Region.Effective May 2011,Patrice Bula was appointed to the Executive Board of NestlS.A.as Executive Vice Presid
208、ent with responsibility for the Strategic Business Units,Marketing,Sales and Nespresso.Patrice Bula serves on the Boards of Novartis AG and Schindler HoldingLtd.,Switzerland.As a representative of Nestl,Patrice Bula serves as Chairman of Blue Bottle Coffee Inc.,USA,as aBoard member of Cereal Partner
209、s Worldwide S.A.,Switzerland,and of Froneri Ltd.,UK.He is also a Board member of Hsu Fu Chi Group Companies,China.(*)Mandates and functions are listed in the following order:(1)mandates in listed companies,(2)mandates in non-listed companies,(3)mandates held at the request of Nestl or companies cont
210、rolled by it,(4)mandates held in associations,charitable organizations,foundations,trusts and employee welfare foundations.(*)For information on former members of the Executive Board see page 45 and Governance Report 201921Executive BoardMarco SettembriMarco Settembri joined the Nestl Group with Nes
211、tl Italiana S.p.A.in1987 and was entrusted with various responsibilities,mainly in the PetCare area.He was appointed Managing Director of the Sanpellegrino water business in 2004 and largely contributed to the successful consolidation of the water activities in Italy and to the development of a stro
212、ng export stream of the emblematic Italian brands.In 2006,he took over the position of Market Head in Italy in addition to his responsibility as Head of Nestl Waters Italy.In 2007,Marco Settembri was appointed CEO of Nestl Purina PetCare Europe.Effective December 2013,Marco Settembri was appointed t
213、o the Executive Board of NestlS.A.as Executive Vice President,Head of Nestl Waters of the Nestl Group.As of January 2017,Marco Settembri was appointed Executive Vice President in charge of Zone EMENA (Europe,Middle East and North Africa).As a representative of Nestl,he is Board member of Lactalis Ne
214、stl Produits Frais S.A.S,France,and of Cereal Partners Worldwide S.A.,Switzerland.In addition,Marco Settembri is a member of the Boards of FoodDrinkEurope and of the Association des Industries de Marque de lUnion Europenne(AIM)in Belgium.Franois-Xavier Roger In July2015,Franois-Xavier Roger joined N
215、estlS.A.as Executive Vice President and Chief Financial Officer.Franois-Xavier Roger came to NestlS.A.from Takeda Pharmaceutical,Tokyo,where he was CFO since 2013.From 2008 to 2013,he was Chief Financial Officer of Millicom based in Luxembourg.From 2000 to 2008,he worked as Chief Financial Officer f
216、or Danone Asia,followed by Head of Finance,Treasury and Tax for the Danone Group based in Paris,France.Magdi Batato Magdi Batato is a mechanical engineer and holds a PhD in Energetics of the human body from the Swiss Federal Institute of Technology Lausanne(EPFL).He spent a few years teaching in uni
217、versity and consulting before joining Nestl S.A.in 1991 in Switzerland as Engineer in Industrial Services,Energy&Environment.His factory and production management experiences took him to Germany,Lebanon and South Africa.In 2004,he was transferred to Malaysia as Executive Director of Production and,i
218、n 2009,he moved to Nestl UK&Ireland as Head of Group Technical.In May 2012,he took up the position of Market Head Pakistan.Effective October 2015,he was appointed Executive VicePresident of Nestl S.A.in charge of Operations.Magdi Batato is a member of the Board of Carlsberg A/S and a member of the e
219、xecutive committee of the World Business Council for Sustainable Development.As of May 2018,he is a member of the Swiss Academy of Technical Sciences.Stefan PalzerStefan Palzer studied food engineering and marketing.He obtained a PhD in Chemical Engineering from the Technical University of Munich an
220、d was appointed Professor for Food and Chemical Engineering by the Universities of Hamburg,Stuttgart,Sheffield and Copenhagen.Stefan Palzer joined the Nestl Group in 2000 as project manager in the Product Technology Centre,Kemptthal.From 2003 to 2010,he held positions of increasing responsibility at
221、 the Product Technology Centre Singen and the Nestl Research Center in Lausanne.In 2010,he took over the responsibility as Head of the Product Technology Centre York.From 2013 to 2017,StefanPalzer was Global R&D Manager in the Strategic Business Unit for Beverages.In 2016,he was appointed Head of th
222、e Nestl Research Center in Lausanne.As of January 2018,Stefan Palzer joined the Executive Board of Nestl S.A.as Executive Vice President and Chief Technology Officer.In addition,he is a member of the Executive Board of the European Academy of Food Engineering(EAFE),a Board member of the Nutrition Cl
223、uster Berlin and a member of the Corporate Governance Report 201922Executive BoardStrategic Advisory Board of the cole Polytechnique Fdrale de Lausanne(EPFL).In 2018,he was conferred the title“Fellow”by the International Union of Food Science and Technology(IUFOST).Batrice Guillaume-GrabischBatrice
224、Guillaume-Grabisch joined Nestl in 2013 as Vice President,Regional Manager of Zone EMENA based in Vevey,Switzerland.She served as CEO of Nestl Germany AG from 2015 to 2018.Before joining Nestl,she held various leadership roles at Colgate,Beiersdorf,Johnson&Johnson and “LOral Paris”in Germany.She hea
225、ded the LOral Consumer Division in Switzerland between 2004 and 2006.From 2006 to 2010,she was President of The Coca-Cola Company in Germany.In 2010,she became the CEO of Zurich-based Beverage Partners Worldwide,a former joint venture between Nestl and Coca-Cola.Effective January 2019,Batrice Guilla
226、ume-Grabisch was appointed Executive Vice President in charge of Group Human Resources&Business Services.As a representative of Nestl,she is a Board member of LOral S.A.,France,and member of its audit committee.Leanne GealeLeanne Geale joined Nestl S.A.in August 2019 as Executive Vice President and
227、General Counsel.In her role,Leanne Geale oversees the legal and compliance function.From 2014 to 2019,Leanne Geale was Chief Ethics&Compliance Officer for Royal Dutch Shell plc.Former positions at Shell include Associate General Counsel,Heavy Oil and Head of Legal for Shell Canada from 2011 to 2014,
228、Shell Legal Services Coordinator for Royal Dutch Shell plc and its subsidiaries from 2006 to 2011 as well as Senior Solicitor and successively Associate General Counsel,Oil Products from 2003 to 2006.Prior to her functions at Shell,she was a Senior Counsel for the Royal Bank of Canada,Senior Counsel
229、 and Assistant Secretary for Rio Algom Limited as well as Counsel for Alcan Aluminium Limited in Canada.Leanne Geale is a member of the Management Board of the CEELI Institute,o.p.s,Prague,Czech Republic.Maurizio PatarnelloMaurizio Patarnello joined Nestl S.A.in 1993 and held several positions in Fi
230、nance before moving to Sanpellegrino in 1999.In 2002,he was appointed as Country Business Manager for Lebanon and Jordan,where he led the development of the Nestl Waters business.In September 2004,he joined the regional management team in Dubai and was promoted Chief Operating Officer and Regional B
231、usiness Head of Nestl Waters for Middle East and Africa.In 2007,Maurizio Patarnello took over the additional responsibility for Nestl Waters Asia.In October 2010,he was promoted to Market Head for Ukraine and Moldava.Maurizio Patarnello took up the position of Market Head for Nestl Russia and Eurasi
232、a Region in October 2012.Effective January 2017,he was appointed Deputy Executive Vice President of Nestl S.A.and Head of NestlWaters.Grgory BeharGrgory(Greg)Behar joined NestlS.A.in 2014 as CEO of Nestl Health Science.Greg Behar came to NestlS.A.from Boehringer Ingelheim Pharmaceuticals Inc.,USA,wh
233、ere he was President and CEO since 2011.From 2010 to July 2011,Greg Behar was Corporate Vice President Region NECAR(North European Union,Canada and Australasia)for Boehringer-Ingelheim GmbH and was its Corporate Vice President of the Cardiovascular and Metabolism Franchise from 2009 to 2010.Furtherm
234、ore,Greg Behar held previous roles at Bula&Fils,Nestl and Novartis Pharma.As of January 2017,he was appointed to the Executive Board of Nestl S.A.He represents Nestl S.A.on the Boards of various companies in which Nestl S.A.holds investments,including Cerecin Inc.,USA,Seres Therapeutics Inc.,USA,Aim
235、mune Therapeutics Inc.,USA,Axcella Health Inc.,USA and Precision IBD Inc.,USA.Corporate Governance Report 201923Executive BoardCompensation,shareholdings and loans4.3 Mandates outside NestlPursuant to art.21sexies of the Articles of Association,no member of the Executive Board may hold more than 2ad
236、ditional mandates in listed companies and 4additional mandates in non-listed companies.Each of these mandates is subject to a specific approval by the Board of Directors.The following mandates are not subject to these limitations:mandates in companies which are controlled by Nestl;mandates which a m
237、ember of the Executive Board holds at the request of Nestl or companies controlled by it.Nomember of the Executive Board shall hold more than 10 such mandates;and mandates in associations,charitable organizations,foundations,trusts and employee welfare foundations.Nomember of the Executive Board sha
238、ll hold more than 10 such mandates.Mandates shall mean mandates in the supreme governing body of a legal entity which is required to be registered in the commercial register or a comparable foreign register.Mandates in different legal entities which are under joint control are deemed one mandate.The
239、 Board of Directors has promulgated regulations that determine additional restrictions.All members of the Executive Board comply with the provisions set out in art.21sexies.4.4 Management contracts There are no management contracts with third parties atNestl.5.Compensation,shareholdings and loansPle
240、ase refer to the Compensation Report 2019,page 29.Corporate Governance Report 201924Shareholders participation6.Shareholders participation rights6.1 Voting rights restrictions and representation 6.1.1 Voting rights restrictions and rules on granting exceptions and6.1.3 Reasons for granting exception
241、s in the year under review Each share registered with the right to vote entitles the holder to one vote at General Meetings(“one share,one vote”).Only persons entered in the share register as shareholders with voting rights may exercise the voting rights or the other rights related thereto(art.5 par
242、.2 of the Articles of Association).No person may exercise,directly or indirectly,voting rights,with respect to own shares or shares represented by proxy,in excess of 5%of the share capital as recorded in the commercial register.Legal entities that are linked to one another through capital,voting rig
243、hts,management or in any other manner,as well as all natural persons or legal entities achieving an understanding or forming a syndicate or otherwise acting in concert to circumvent such a limit shall be counted as one shareholder(art.11 par.2 of the Articles of Association;see art.11 par.3 of the A
244、rticles of Association for exceptions to this voting restriction).To permit the exercise of voting rights in respect of shares held by nominees,in line with art.11 par.4 of the Articles of Association,the Board of Directors may by means of regulations or agreements depart from the limit of 5%of the
245、share capital as recorded in the commercial register(art.5 par.6 andpar.9 of the Articles of Association).The Board of Directors has granted exceptions to vote shares that in aggregate are in excess of 5%of the share capital to the following Nominees N:Chase Nominees Ltd,London,and Citibank N.A.,Lon
246、don,as depositary for shares represented by American Depositary Receipts(please refer to point2.6.3).Pursuant to art.5 par.9 and 11 par.4 of the Articles of Association,the Board of Directors has conferred to Credit Suisse AG and UBSAG as custodians the right to vote shares in excess of 5%on the bas
247、is of specific instructions provided by their clients for General Meetings.6.1.4 Procedure and conditions for abolishing voting rights restrictions in the Articles of AssociationA resolution to amend the provisions of the Articles of Association relating to:(i)restrictions on the exercise of voting
248、rights and the change or removal of such restrictions,or(ii)the limitation on registration or the limitation on voting rights and the change or removal of such limitations requires a majority of two-thirds of the shares represented and the absolute majority of the nominal value represented at the Ge
249、neral Meeting(art.13 of the Articles of Association).See also art.11 par.4 of the Articles of Association.6.1.5 Rules on participation in the General Meeting of shareholdersThere are no restrictions to the legal regime set out by Swiss law in the Articles of Association.Shareholders with voting righ
250、ts may have their shares represented by the proxy of their choice.6.1.6 Rules on instructions to the independent representative and on the electronic participation in the General Meeting of shareholdersThe legal regime set out by Swiss law applies to instructions in written or electronic form to the
251、 independent representative for participation in the General Meeting of shareholders.There are no specific provisions related thereto in the Articles of Association.6.2 Quorums required by the Articles of AssociationPlease refer to art.13 of the Articles of Association.6.3 Convocation of the General
252、 Meeting of shareholdersNestlS.A.statutory rules(art.7 to 9 of the Articles of Association)do not differ from applicable legal provisions.An Extraordinary General Meeting requested by one or more shareholders whose combined holdings represent at least 10%of the share capital as recorded in the comme
253、rcial register must be held as promptly as practicable following such request(art.8 par.2 of the Articles of Association).Corporate Governance Report 201925Change of control and defence measuresShareholders participation6.4 Inclusion of items on the agendaOne or more shareholders with voting rights
254、whose combined holdings represent at least 0.15%of the share capital as recorded in the commercial register may request that an item be included in the agenda of the General Meeting by making the request in writing to the Board of Directors at the latest 45days before the meeting and specifying the
255、agenda items and the proposals made (art.9 par.2 and par.3 of the Articles of Association).6.5 Entries in the share registerThe relevant date to determine the shareholders right to participate in the General Meeting on the basis of the registrations appearing in the share register is set by the Boar
256、d of Directors.7.Change of control and defence measures7.1 Duty to make an offerNestlS.A.does not have a provision on opting out or opting up in the Articles of Association.Thus,the provisions regarding the legally prescribed threshold of 33 3%of the voting rights for making a public takeover offer
257、set out in art.135 of the Swiss Financial Market Infrastructure Act are applicable.7.2 Clauses on change of controlThere are no such agreements.Corporate Governance Report 201926Auditors8.Auditors8.1 Duration of the mandate and term of office of the lead auditorKPMG Klynveld Peat Marwick GoerdelerSA
258、 were first appointed on May 22,1993,and KPMGSA(replacing KPMG Klynveld Peat Marwick GoerdelerSA)were first appointed on April 23,2009 as auditors of NestlS.A.On April 11,2019,KPMGSA(hereafter“KPMG”)were appointed as auditors of the Financial Statements of NestlS.A.and of the Consolidated Financial
259、Statements of the Nestl Group for a term of office of one year.The audit report is signed jointly by two KPMG partners on behalf of KPMG.The first year that Mr.Scott Cormack,in his capacity as lead auditor,signed the Financial Statements of NestlS.A.and the Consolidated Financial Statements of the N
260、estl Group was for the year ending December 31,2013.The lead auditor is rotated every seven years in accordance with Swiss law.8.2 Auditing feesThe auditing fees paid to KPMG in their capacity as Group auditors for 2019 amount to CHF37 million.8.3 Additional feesIn addition,KPMG provided non-audit s
261、ervices amounting to CHF24.4million,including CHF20.6million for mergers and disposals services,CHF 1.5 million for tax services,CHF0.7million for IS/IT advisory support,and CHF1.4million for other various non-audit services.8.4 Information instruments pertaining to the external audit KPMG presents
262、to the Audit Committee a detailed report on the conduct of the Financial Statements audit,the findings on significant financial accounting and reporting issues together with the findings on the internal control system as well as an overview of issues found during the interim audit.In 2019,KPMG parti
263、cipated in four Audit Committee meetings at the end of which they met with the Audit Committee without the Groups management being present.The Audit Committee assesses the effectiveness of the work of the auditors in accordance with Swiss law,based on their understanding of the Groups business,contr
264、ol,accounting and reporting issues,together with the way in which matters significant at Group level or in the statutory accounts are identified and resolved.The Audit Committee is also informed on the work of the auditors through regular briefings of its Chairman.Audit fees are ultimately approved
265、by the Audit Committee.The Group and KPMG have agreed on clear guidelines as to non-audit services which it is appropriate for KPMG to provide.These services include sell side and carve out support on disposals and certain tax and business risk assurance and IS/IT advisory support.These guidelines e
266、nsure KPMGs independence in their capacity as auditors to the Group.KPMG monitors its independence throughout the year and confirms its independence to the Audit Committee annually.8.5 Auditor rotationAs disclosed in the Corporate Governance Report 2018,in October 2018,the Audit Committee invited se
267、veral audit firms,including KPMG,to participate in a tender process which would lead to the selection of the audit firm to be proposed for election at the Annual General Meeting 2020.Following a comprehensive tender process under the supervision of the Audit Committee,the Board decided to propose to
268、 the Annual General Meeting 2020 the appointment of EY as the principal audit provider for the 2020 financial year.All the“big four”audit firms,who have the footprint and experience to audit a global company with a complex spread of operations,participated in the tender process.The objective of the
269、Board was to deliver a fair,transparent and balanced tender process according to defined key success criteria and underpinned by a strong governance ensuring that all participants had equal access to management and information.In the first phase of field work,the firms visited markets,met with key f
270、unctional management at the Group head office,and had access to a data-room containing both financial and organisational information.On the basis of written proposals and presentation by the firms,a first round selection panel,including the Chairman of the Audit Committee,shortlisted two firms for p
271、resentations to a second round selection panel.The latter comprised all Audit Committee members,the Chairman of the Board of Directors as well as the CEO.The Audit Committee recommended to the Board of Directors the appointment of EY as the statutory auditors of Nestl S.A.After discussion of the mer
272、its of each of the two shortlisted firms proposals and the rationale for the Audit Committee decision,the Board of Directors approved the recommendation and proposes the election of EY as external auditors of the Company at the Annual General Meeting of April 23,2020.Corporate Governance Report 2019
273、27Information policy9.Information policy Investor Relations guiding principlesNestl is committed to managing an open and consistent communication policy with shareholders and other interested parties.The objective is to ensure that the perception of those parties about the historical record,current
274、performance and future prospects of Nestl is in line with managements understanding of the actual situation at Nestl.The guiding principles of this policy are that Nestl gives equal treatment to shareholders in equal situations,that any price-sensitive information is published in a timely fashion an
275、d that the information is provided in a format that is as full,simple,transparent and consistent as possible.Methodology Each year,Nestl produces a detailed Annual Report,which consists of i)the Annual Review,ii)the Consolidated Financial Statements of the Nestl Group,iii)the Financial Statements of
276、 Nestl S.A.,iv)the Corporate Governance Report,and v)the Compensation Report.The Consolidated Financial Statements are prepared according to the International Financial Reporting Standards(IFRS).The Half-year Report,consisting of the Half-Yearly Income Statement,Balance Sheet and Cash Flow Statement
277、,complements the Annual Report.The Company also issues annually its Creating Shared Value(CSV)report.Nestl publishes its Financial Statements for the full-year and the half-year.Additionally,the Company publishes its sales figures for the first three-months and nine-months.Press releases accompany t
278、he financial results and sales announcements,and are also issued at the time of potentially price-sensitive events,such as significant acquisitions and divestments,joint venture agreements or alliances.These communications are publicly available on the internet.Major announcements,such as results of
279、 corporate activity,are accompanied by a presentation which is broad cast“live”on the internet and which anyone can access,whether or not that person is a shareholder.Furthermore,Nestl has an active investor relations(IR)program.Throughout the year,IR engages with investors(current or prospective)an
280、d relevant sell-side analysts in meetings,conference calls,roadshows,broker conferences,or other events.In certain cases,members of management might also participate in some meetings with the financial community,including both group meetings and one-to-one meetings.Topics of discussion may include r
281、ecently announced financial results,recent corporate activity,or the longer-term strategy of the Group;they are not an occasion for the disclosure of new information which might encourage investment decisions.Specifically on governance topics,the Company engages in an active dialogue with investors
282、through regular Chairmans roundtables,surveys and bilateral exchanges which are reported to the Chairmans and Corporate Governance Committee or the Board.The Company uses its website( ensure a rapid and equitable distribution of information.There are also links to non-financial information that may
283、be of interest to investors,including areas such as the environment,sustainability and news about brands and innovation.A corporate calendar of relevant dates is displayed on page75 of the Annual Review 2019 and available on the IR events pages.( Nestl Investor Relations Department can be contacted
284、via the following coordinates:Contact Investor Relations NestlS.A.,Avenue Nestl 55 CH-1800 Vevey(Switzerland)Tel.+41(0)21 924 35 09 E-mail:Corporate Governance Report 201928Human Resources&Business ServicesBatrice Guillaume-GrabischNestl WatersMaurizio PatarnelloFinance&ControlFranois-Xavier RogerOr
285、ganizational EfficiencyWolfgang PasewaldNestl Health ScienceGreg BeharChairmanPaul BulckeZone EMENA:Europe,Middle East&North AfricaMarco SettembriOperationsMagdi BatatoGeneral Counsel,Corporate Governance&ComplianceLeanne GealeSustainable PackagingVronique CremadesChief Executive OfficerUlf Mark Sch
286、neiderSecretary to the BoardDavid FrickZone AMS:AmericasLaurent FreixeStrategic Business Units,Marketing and SalesPatrice BulaInnovation Technology and R&DStefan PalzerCorporate CommunicationsEugenio SimioniZone AOA:Asia,Oceania&AfricaChris JohnsonGeneral Organization of NestlS.A.at December 31,2019
287、Executive BoardUlf Mark SchneiderLaurent FreixeChris JohnsonPatrice BulaMarco SettembriFranois-Xavier RogerMagdi BatatoStefan PalzerBatrice Guillaume-GrabischLeanne GealeMaurizio PatarnelloGreg BeharCompensation Report 2019Compensation Report 20192930Compensation Report 2019Compensation Report 2019I
288、ntroduction The future success of Nestl is dependent on its ability to attract,motivate and retain the right talented employees.Among the various programs to support this ambition is a competitive remuneration policy.Nestl believes in a performance culture as well as good corporate governance and co
289、rporate social responsibility.Therefore,remuneration at Nestl is based on the following principles:pay for performance to support the Companys short-term and long-term objectives;compensation aligned with long-term Group strategy and shareholders interests;coherence in our remuneration plans and lev
290、els throughout the Company;competitiveness versus external market comparisons;appropriate balance of fixed and variable remuneration and short-term and long-term rewards.This Compensation Report shall be submitted to the advisory vote of the shareholders at the Annual General Meeting 2020.At the 201
291、9 Annual General Meeting,shareholders approved the total compensation budgets for the Board of Directors and the Executive Board with large majorities.To ensure complete accountability,the shareholders will be able to retrospectively vote on the Compensation Report and payouts in a consultative vote
292、.Changes to CompensationFor 2019 the following changes have been implemented:The compensation budget will be adjusted routinely to the number of Executive Board members as at December31 of the prior business year.Share ownership:Subject to an appropriate phase-in period,each Executive Board Member i
293、s required to hold shares at least equal to twice his/her annual base salary.The CEO is required to hold shares for at least five times his annual base salary.Market value(for blocked shares):We start disclosing the market value(instead of tax value)for blocked shares awarded to the Board of Directo
294、rs(50%of their remuneration)and the Executive Board(as part of their Short Term Bonus)in the Compensation Report 2019.Individual objectives of Executive Board members are integrated into the business and functional objectives.31Compensation Report 2019Compensation Report 2019GovernanceThe Board of D
295、irectors has the overall responsibility for defining the compensation principles used in the Group.Pursuant to art.21bis of Nestls Articles of Association(*),the total compensation of the Board of Directors and of the Executive Board is subject to approval by the shareholders,upon proposal by the Bo
296、ard of Directors.As of December 31,2019,the governance for setting the compensation of the members of the Board of Directors and the Executive Board is defined as follows:Compensation ofRecommended byApproved byBoard of Directors as a wholeBoard of DirectorsShareholdersExecutive Board as a wholeBoar
297、d of DirectorsShareholdersChairman of the Board,CEOCompensation CommitteeBoard of Directors(a)Non-executive members of the Board of DirectorsCompensation CommitteeBoard of Directors(b)Members of the Executive BoardCEO together with ChairmanCompensation Committee(c)(a)Chairman as well as CEO not voti
298、ng on own compensation,and not participating in the relevant meetings.(b)Members not voting on own compensation to the extent that Committee fees are concerned.(c)Executive Board members not participating in the relevant meetings.Compensation Committee(CC)The CC is governed by the Compensation Commi
299、ttee Charter(see point 3.5.2 in the Corporate Governance section).The Committee consists of the Chairperson who is an independent and non-executive member of the Board.The other members shall be a minimum of three other non-executive members of the Board.The members of the CC have been elected by th
300、e shareholders for one year.The Chairman was appointed by the Board of Directors.On December 31,2019,the composition of the CC is as follows:ChairmanMembersBeat W.HessPatrick AebischerUrsula M.BurnsPablo IslaThe tasks and areas of responsibility of the CC are described on page13 of the Corporate Gov
301、ernance Report 2019.(*)Nestl S.A.s Articles of Association can be found on page 51 and on Report 2019Compensation Report 2019Board of DirectorsPrinciples of compensation for the members of the Board of DirectorsGovernancePursuant to art.21bis par.1 of Nestls Articles of Association,the General Meeti
302、ng shall approve annually the proposal of the Board of Directors in relation to the maximum aggregate amount of the compensation of the Board of Directors for the period until the next Annual General Meeting(a).In the event the General Meeting has not approved a proposal of the Board of Directors,th
303、e Board of Directors shall determine the respective maximum aggregate amount or maximum partial amounts of compensation provided that:a)the Board of Directors takes into account(i)the proposed maximum aggregate amount of compensation;(ii)the decision of the General Meeting and,to the extent known to
304、 the Board of Directors,the main reasons for the negative vote;and(iii)Nestls compensation principles;andb)the Board of Directors submits the amount(s)so determined for approval by the same General Meeting,a subsequent Extraordinary General Meeting or the next Annual General Meeting(art.21bis par.2
305、of the Articles of Association).The compensation of the members of the Board of Directors is subject to“claw back”rules in accordance with art.678 of the Swiss Code of Obligations.Members of the Board of Directors could be obligated to return benefits received from the Company to the extent these ar
306、e manifestly disproportionate to the performance rendered in return and to the Companys economic situation(including as a result of fraud or accounting misstatement).PrinciplesThe remuneration of the members of the Board of Directors is set to attract and retain highly qualified individuals to serve
307、 on the Board of Directors.The level of remuneration reflects the time and effort required from the members in fulfilling their Board and Committee responsibilities.The pay structure(cash and blocked shares)is designed to ensure the Boards focus on the long-term success of the Company.There is no va
308、riable compensation for non-executive members of the Board of Directors,in order to ensure aproper level of independence.The principal benchmark used to define Board remuneration is a selection of large Swiss Market Index(SMI)companies(b),adjusted for the size of Nestl.These figures are periodically
309、 reviewed against this benchmark.Compensation 2019 for the members of the Board of DirectorsBoard membership fees and allowancesWith the exception of the Chairman and the CEO,each member of the Board of Directors receives a Board membership fee of CHF280000 and an Expense Allowance of CHF15000.These
310、 figures have remained unchanged since 2006.(a)The Board of Directors may submit for approval by the General Meeting deviating or additional proposals relating to the same or different periods.(b)Novartis,Roche,Richemont,ABB,UBS and Credit Suisse.33Compensation Report 2019Compensation Report 2019Mem
311、bers of a Board Committee receive the following additional fees(a):ChairMembersChairmans and Corporate Governance CommitteeCHF300 000CHF200 000Compensation CommitteeCHF150 000CHF 70 000Nomination and Sustainability CommitteeCHF150 000CHF 70 000Audit CommitteeCHF150 000CHF100 000(a)The Chairman and t
312、he CEO Committee fees are included in their total remuneration.Committee membership on December 31,2019Chairmans and Corporate Governance CommitteeCompensation CommitteeNomination and Sustainability CommitteeAudit CommitteePaul Bulcke,Chairman(Chair)Ulf Mark Schneider,CEOHenri de Castries,Vice-Chair
313、man,Lead Independent Director(Chair)Beat W.Hess(Chair)Renato Fassbind(Chair)Ann M.VenemanEva ChengPatrick AebischerUrsula M.BurnsKasper B.RorstedPablo IslaKimberly A.RossDick BoerDinesh PaliwalThe above fees and allowances cover the period between the Annual General Meeting 2019 and the Annual Gener
314、al Meeting 2020.They are paid in two instalments.Board membership and Committee fees are paid 50%in cash and 50%in NestlS.A.shares,which are subject to a three-year blocking period.The blocking period remains applicable upon termination of the mandate.The number of NestlS.A.shares is determined by t
315、aking the closing price of the share on the SIX Swiss Exchange on the ex-dividend date of the respective financial year.Mr.Jean-Pierre Roth and Mrs.Ruth K.Oniango did not stand in for re-election at the Annual General Meeting on April 11,2019 and left the Board of Directors.34Compensation Report 201
316、9Compensation Report 2019Compensation payout 2019At the Annual General Meeting of April 11,2019,the shareholders approved a maximum compensation for the Board of Directors of CHF 10.0 million for the period from the Annual General Meeting 2019 to the Annual General Meeting 2020.The total actual comp
317、ensation pay-out for this period including social security contributions is CHF9130292.Summary of compensation 2019*Cash in CHF(a)Number of sharesMarket value of shares in CHF(b)Total Cash&SharesSocial security&addit.Fees(c)Total CompensationPaul Bulcke,Chairman 570 000 30 734 2 900 060 3 470 060 28
318、 200 3 498 260 Ulf Mark Schneider,Chief Executive Officer(d)Henri de Castries,Vice Chairman,Lead Independent Director380 000 3 869 365 078 745 078 28 200 773 278 Beat W.Hess330 000 3 339 315 068 645 068 28 200 673 268 Renato Fassbind330 000 3 339 315 068 645 068 28 200 673 268 Ann M.Veneman190 000 1
319、 855 175 038 365 038 25 000 390 038 Eva Cheng240 000 2 385 225 049 465 049 20 355 485 404 Patrick Aebischer 190 000 1 855 175 038 365 038 27 014 392 052 Ursula M.Burns190 000 1 855 175 038 365 038 16 501 381 539 Kasper B.Rorsted155 000 1 484 140 030 295 030 13 201 308 231 Pablo Isla190 000 1 855 175
320、 038 365 038 16 501 381 539 Kimberly A.Ross205 000 2 014 190 041 395 041 395 041 Dick Boer155 000 1 484 140 030 295 030 13 201 308 231 Dinesh Paliwal155 000 1 484 140 030 295 030 13 201 308 231 Total for 20193 280 000 57 552 5 430 606 8 710 606 257 774 8 968 380*For all Board members except the Chai
321、rman and the CEO,the above table shows the annual compensation paid semi-annual-ly in April and October during the respective year covering the twelve-month period starting with the Annual General Meeting.(a)The cash amount includes the expense allowance of CHF15 000.The Chairman receives no expense
322、 allowance.(b)NestlS.A.shares received are valued at the closing price of the share on the SIX Swiss Exchange on the ex-dividend date.(c)Since Company contributions to social security are based on full earnings,whereas benefits are capped,only contributions that lead to future benefits are included.
323、The additional cost to the Company taking into account full social security employer contributions is CHF 130 745 in 2019.For details of additional fees,see page 37.(d)The CEOs compensation is disclosed in its entirety under compensation of the Executive Board.(*)Sections highlighted with a blue bar
324、 are audited by KPMG.They include all elements the Company needs to disclose pursuant to art.14 to 16 of the Ordinance against excessive compensation in listed companies.Audited(*)35Compensation Report 2019Compensation Report 2019Summary of compensation 2018*Cash in CHF(a)Number of sharesMarket valu
325、e of shares in CHF(b)Total Cash&SharesSocial security&addit.Fees(c)Total CompensationPaul Bulcke,Chairman 510 000 47 148 3 520 070 4 030 070 28 200 4 058 270 Ulf Mark Schneider,Chief Executive Officer(d)Henri de Castries,Lead Independent Director380 000 4 889 365 013 745 013 28 200 773 213 Beat W.He
326、ss330 000 4 220 315 065 645 065 28 200 673 265 Renato Fassbind330 000 4 220 315 065 645 065 28 200 673 265 Jean-Pierre Roth190 000 2 344 175 003 365 003 15 639 380 642 Ann M.Veneman190 000 2 344 175 003 365 003 25 000 390 003 Eva Cheng240 000 3 014 225 025 465 025 20 354 485 379 Ruth K.Oniango155 00
327、0 1 876 140 062 295 062 37 341 332 403 Patrick Aebischer 190 000 2 344 175 003 365 003 27 012 392 015 Ursula M.Burns190 000 2 344 175 003 365 003 16 500 381 503 Kasper B.Rorsted155 000 1 876 140 062 295 062 13 202 308 264 Pablo Isla155 000 1 876 140 062 295 062 13 202 308 264 Kimberly A.Ross205 000
328、2 545 190 009 395 009 395 009 Total for 20183 220 000 81 040 6 050 445 9 270 445 281 050 9 551 495*For all Board members except the Chairman and the CEO,the above table shows the annual compensation paid semi-annually in April and October during the respective year covering the twelve-month period s
329、tarting with the Annual General Meeting.(a)The cash amount includes the expense allowance of CHF15 000.The Chairman receives no expense allowance.(b)NestlS.A.shares received are valued at the closing price of the share on the SIX Swiss Exchange on the ex-dividend date.The 2018 amounts have been rest
330、ated from the discounted value(16.038%discount)to market value.(c)Since Company contributions to social security are based on full earnings,whereas benefits are capped,only contributions that lead to future benefits are included.The additional cost to the Company taking into account full social secu
331、rity employer contributions is CHF 155 161 in 2018.For details of additional fees,see page 37.(d)The CEOs compensation is disclosed in its entirety under compensation of the Executive Board.(*)Sections highlighted with a blue bar are audited by KPMG.They include all elements the Company needs to dis
332、close pursuant to art.14 to 16 of the Ordinance against excessive compensation in listed companies.Audited(*)36Compensation Report 2019Compensation Report 2019Paul Bulcke in his capacity as active Chairman,received acash compensation as well as NestlS.A.shares,which are blocked for three years.This
333、in particular reflects certain responsibilities for the direction and control of the Group including the support to the CEO,the chairmanship of the Nestl Science&Technology Advisory Council,the support of Nestl Health Sciencethrough its Strategic Advisory Council,and the direct leadership of Nestls interests in LOral.Paul Bulcke also chairs the 2030 Water Resources Group(WRG)and represents Nestl a