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1、Corporate Governance Report 2018Compensation Report 2018Articles of Association of Nestl S.A.Amended by the Annual General Meeting of April 12,2018Corporate Governance Report 20181Corporate GovernanceReport 2018Corporate Governance Report 20182Situation at December 31,2018 1.Group structure and shar
2、eholders1.1 Group structure1.2 Signifi cant shareholders1.3 Cross-shareholdings2.Capital structure2.1 Capital2.2 Conditional capital2.3 Changes in capital2.4 Shares and participation certifi cates2.5 Dividend-right certifi cates2.6 Limitations on transferabilityand nominee registrations2.7 Convertib
3、le bonds and options3.Board of Directors(1)3.1 Members of the Board of Directors3.2 Professional background and otheractivities and functions3.3 Mandates outside Nestl3.4 Elections and terms of offi ce3.5 Internal organizational structure3.6 Defi nition of areas of responsibility3.7 Information and
4、control instrumentsvis-vis the Executive Board(2)4.Executive Board(2)4.1 Members of the Executive Board4.2 Professional background and otheractivities and functions4.3 Mandates outside Nestl4.4 Management contracts3 46182223242526272951(1)The full Board of Directors Regulations and Committee Charter
5、s are published on term Executive Committee,as used in the SIX Directive,is replaced by Executive Board throughout this document.5.Compensation,shareholdings and loans6.Shareholders participation rights6.1 Voting rights restrictionsand representation6.2 Quorums required by the Articlesof Association
6、6.3 Convocation of the General Meetingof shareholders6.4 Inclusion of items on the agenda6.5 Entries in the share register7.Change of control anddefense measures7.1 Duty to make an offer7.2 Clauses on change of control8.Auditors8.1 Duration of the mandate and termof offi ce of the lead auditor8.2 Au
7、diting fees8.3 Additional fees8.4 Information instruments pertainingto the external audit9.Information policy General Organization of Nestl S.A.Compensation Report 2018 Articles of Association of Nestl S.A.Corporate Governance Report 20183Group structure and shareholdersPreliminary remarksThe Nestl
8、Corporate Governance Report 2018 follows the SIX Swiss Exchange Directive on Information relating to Corporate Governance.Additional information can be found in the Compensation Report.Nestl S.A.complies with the recommendations of the Swiss Code of Best Practice for Corporate Governance,as in force
9、 at December 31,2018.To avoid duplication of information,cross-referencing to other reports is made in some sections,namely the Annual Review 2018,the Financial Statements 2018 that comprise the Consolidated Financial Statements of the Nestl Group and the Financial Statements of Nestl S.A.,as well a
10、s the Articles of Association of Nestl S.A.,whose full text can be consulted in this report(page 51)or on: Consolidated Financial Statements of the Nestl Group 2018 comply with the International Financial Reporting Standards(IFRS)issued by the International Accounting Standards Board(IASB)and with S
11、wiss 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 Review 2018,page 60 for the overview of Directors and Offi cers.1.1
12、.1 Description of the issuer s operational group structureFor the general organization chart of Nestl S.A.,refer to page 27 of this document.The Group s Management structure is represented in the analysis by operating segments(refer to Note 3 of the Consolidated Financial Statements of the Nestl Gro
13、up 2018,page 83).1.1.2 All listed companies belonging to the issuer s groupThe registered offi ces of Nestl S.A.are in Vevey and Cham(Switzerland).Nestl S.A.shares are listed on the SIX Swiss Exchange in Switzerland(ISIN code:CH0038863350).At December 31,2018,the market capitalization of Nestl S.A.w
14、as CHF 237 363 463 000.For further information see also page 65 of the Annual Review 2018 and visit our website on refer to the Consolidated Financial Statements of the Nestl Group 2018,page 168,for the list of publicly listed companies of the Nestl Group,with an indication of the company name,regis
15、tered offi ce,share capital,place of listing,securities ISIN number,their market capitalization and the Company s participation.1.1.3 The non-listed companies belonging to the issuer s groupPlease refer to the Consolidated Financial Statements of the Nestl Group 2018,page 168,for the enumeration of
16、companies of the Nestl Group,joint arrangements and associates,with an indication of the company name,registered offi ce,share capital and the Company s participation.Corporate Governance Report 20184Capital structureGroup structure and shareholders1.2 Signifi cant shareholdersBlackRock,Inc.,New Yor
17、k,announced on August 31,2017,holding,directly or indirectly,4.7%of Nestl S.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.Apart from the foregoing,Nestl S.A.is not aware of any other sh
18、areholder holding,as at December 31,2018,Nestl S.A.shares in excess of 3%of the share capital.During 2018,the Company published on the electronic publication platform of the SIX Swiss Exchange two disclosure notifi cations pertaining to the holding of its own shares.On May 30,2018,the Company disclo
19、sed holding 3.01%of its own shares.This holding fell below the threshold of 3%on June 25,2018 as a consequence of the share capital reduction by cancellation of own shares effected by the Company.With respect to nominees,Chase Nominees Ltd,London,was a registered Nominee N(refer to point 2.6.3.below
20、)of 363 415 006 shares,i.e.11.87%of the shares of the Company as at December 31,2018.At the same date,Citibank N.A.,London,as depositary for the shares represented by American Depositary Receipts,was the registered holder of 243 575 492 shares,i.e.7.95%of the shares of the Company.Also on December 3
21、1,2018,Nortrust Nominees Ltd,London,was a registered Nominee N of 114 428 906 shares of the Company,representing 3.74%of the shares.1.3 Cross-shareholdingsThe Company is not aware of cross-shareholdings exceeding 5%of the capital or voting rights on both sides.2.Capital structure2.1 CapitalThe ordin
22、ary share capital of Nestl S.A.is CHF 306 300 000.The conditional share capital is CHF 10 000 000.Nestl S.A.does not have any authorized share capital.2.2 Conditional capitalThe share capital may be increased(without time limitation)in an amount not to exceed CHF 10 000 000 by issuing up to 100 000
23、000 registered shares with a nominal value of CHF 0.10 each(representing 3.26%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 subsidiaries of newly or already issued convertible debent
24、ures,debentures with option rights or other fi nancial market instruments.Thus the Board of Directors has at its disposal a fl exible instrument enabling it,if necessary,to fi nance the activities of the Company through convertible debentures.For a description of the group of benefi ciaries and of t
25、he terms and conditions of the issuance of conditional capital,refer to art.3bis of the Articles of Association of Nestl S.A.(*)2.3 Changes in capitalThe share capital was reduced twice in the last three fi nancial years as a consequence of a share buy-back program of CHF 8 billion,initiated by the
26、Company on August 25,2014,and completed on December 7,2015,and of a further share buy-back program of up to CHF 20 billion,launched on July 4,2017.The resulting cancellations of shares were approved at the 2016 and 2018 Annual General Meetings.On April 7,2016,the Annual General Meeting resolved to c
27、ancel 76 240 000 shares resulting in a reduction of the share capital to CHF 311 216 000.On April 12,2018,the Annual General Meeting resolved to reduce the share capital by 49 160 000 shares to the present CHF 306 300 000.For the breakdown of capital(“equity”)for 2018,2017 and 2016 see the consolida
28、ted statement of changes in equity in the Consolidated Financial Statements of the Nestl Group 2018,page 71,and 2017,page 69.( nancial_statements/2017-fi nancial-statements-en.pdf).(*)Nestl S.A.s Articles of Association can be found on page 51 and on Governance Report 20185Capital structure2.4 Share
29、s and participation certifi catesNestl S.A.s capital is composed of registered shares only.The number of registered shares with a nominal value of CHF 0.10 each,fully paid up,was 3 063 000 000 at December 31,2018.According to art.11 par.1 of the Articles of Association,each share recorded in the sha
30、re register as a share with voting rights confers the right to one vote to its holder.See also point 2.6.1 below.Shareholders have the right to receive dividends.There are no participation certifi cates.2.5 Dividend-right certifi catesThere are no dividend-right certifi cates.2.6 Limitations on tran
31、sferability and nominee registrations2.6.1 Limitations on transferability along with an indication of group clauses in the Articles 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
32、more than 5%of the share capital as recorded in the commercial register.This limitation on registration also applies to persons 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
33、 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 the regulations concerning the limitation on registration or the nominees,shall be counted as one person or nominee(art.5 par.7 of the Article
34、s of Association).The limitation on registration also applies to shares acquired or subscribed by the exercise of subscription,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 point 2.6.3 below.2.6.2 Reasons fo
35、r granting exceptions in the year under reviewPlease refer to points 2.6.3 and 6.1.3 below.2.6.3 Admissibility of nominee registrations,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 regulat
36、ions concerning the application of art.5 of the Articles of Association.The regulations on nominees set forth rules for the entry of nominees as shareholders in the share register.They allow the registration of:Nominees N(“N”as Name of benefi cial owner disclosed):where trading and safekeeping pract
37、ices make individual registration of benefi cial owners diffi cult or impractical,shareholders may register their holdings through a Nominee N with voting rights,subject to the specifi c understanding that the identity and holdings of benefi cial owners are to be disclosed to the Company,periodicall
38、y or upon request.Voting rights of Nominees are to be exercised on the basis of voting instructions received from the benefi cial owners.For voting purposes,holdings of a Nominee N,or Nominees N acting as an organized group or pursuant to a common agreement,may not exceed 5%of the share capital of t
39、he Company.Holdings exceeding the 5%limit(respectively the limit fi xed by the Board of Directors,see point 6.1.3 below)are registered without voting rights.The responsibility for disclosure of benefi cial owners and their holdings resides with the nominees registered in the share register.Nominees
40、A(“A”as Anonymous benefi cial owner):registration without voting rights.In line with its regulations,in order to facilitate trading of the shares 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 P
41、rocedure and conditions for cancelling statutory privileges and limitations on transferability Please refer to point 6.1.3 below.2.7 Convertible bonds and optionsAs at December 31,2018,there are no outstanding convertible bonds or warrants/options issued by Nestl S.A.or by subsidiaries on Nestl S.A.
42、shares.The only options issued by Nestl S.A.are employee options allocated under the Nestl Management Stock Option Plan(MSOP).Grants under this plan were discontinued in 2013.Corporate Governance Report 20186Board of Directors3.Board of Directors 3.1 Members of the Board of DirectorsNestl s Board of
43、 Directors is highly structured to ensure a high degree of diversity by age,gender,education/qualifi cations,professional background,present activity,sector expertise,special skills(classifi cation),nationality and geography.This is refl ected in Nestl s skills and diversity grid disclosed here.Name
44、Year of birthEducation/Qualifi cations(a)Professional background1Paul Bulcke1954Economics and Business AdministrationChairman,Nestl S.A.2Ulf Mark Schneider1965Economics,Business Administrationand Finance&AccountingCEO,Nestl S.A.3Henri de Castries(c)(d)1954HEC,Law and cole Nationale d Administration(
45、ENA)Former Chairman and 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 SuisseFormer CEO,Diethelm Keller Group6Jean-Pierre Ro
46、th1946Economics,Political Science and FinanceFormer Chairman of the Governing Board,Swiss National Bank7Ann M.Veneman1949Law,Public Policy and Political Science Former Secretary,USDAFormer Executive Director,UNICEF8Eva Cheng1952Business Administration and HistoryFormer Amway China Chairwoman and EVP
47、,Amway Corporation9Ruth K.Oniang o1946Food Science and Human NutritionAdjunct Professor of Nutrition,Tufts UniversityFormer Member of Parliament,Kenya10Patrick Aebischer1954Medicine and NeurosciencePresident Emeritus,Swiss Federal Institute of Technology Lausanne(EPFL)11Ursula M.Burns1958Mechanical
48、EngineeringFormer Chairman,Xerox Corporation12Kasper B.Rorsted1962Business AdministrationCEO,General ManagementHenkel,Compaq/Hewlett Packard13Pablo Isla1964LawLawyer,Former State Attorney,Government SpainBanking,Banco Popular Espaa14Kimberly A.Ross1965Business Administration and AccountingFormer CFO
49、,Baker Hughes,Avon ProductsRoyal Ahold NV(a)For more complete information on qualifi cations:please refer to section 3.2 and the individual CVs on Board members are elected annually in accordance with Swiss Corporate law and Nestl S.A.s Articles of Association.(c)Vice Chairman(d)Lead Independent Dir
50、ector.The Lead Independent Director assumes the role of a prime intermediary between the Board and the Chairman.He may convene and he regularly chairs Board meetings and“in camera”sessions where the Chairman is not present or confl icted.Corporate Governance Report 20187Board of DirectorsPresent fun
51、ctions/mandates(listed companies)SectorClassifi cationNationalityFirst ElectionExpires(b)Chairman,Nestl S.A.Roche Ltd.L Oral S.A.Food&BeveragesFMCG/CEOBelgian/SwissApril 10,20082019CEO,Nestl S.A.Food&BeveragesCEOGerman/USApril 06,20172019HSBC Holdings plcInsurance&FinanceInsurance/CEOFrenchApril 19,
52、20122019Chairman,LafargeHolcim Ltd.Vice Chairman,Sonova Holding AGLegalLegalSwissApril 10,20082019Vice Chairman,Swiss Re AG Khne+Nagel International SAFinanceFinancial Management/CFOSwissApril 16,20152019Swatch GroupCentral BankPolitical/MacroeconomicsSwissApril 15,20102019Global Health Innovative T
53、echnology Fund,CHAI and various advisory mandatesGovernment/NGOsGovernment/NGOsUSApril 14,20112019Trinity Limited Haier Electronics Group Co.Ltd.Amcor Ltd.Personal Care&NutritionFMCGChineseApril 11,20132019Trustee,CABI International and various advisory mandatesNutritionScientistKenyanApril 16,20152
54、019Lonza Group AGLogitech SAScienceScientistSwissApril 16,20152019Chairman&CEO VEON Ltd.Exxon Mobil CorporationTechnologyInformation Systems/CEOUSApril 06,20172019CEO,adidas AGBertelsmann SE&Co.,KGARetailTechnologyInformation Systems/FMCG/CEODanishApril 07,20182019Chairman&CEO InditexRetailFinance/L
55、egal/FMCG/CEOSpanishApril 07,20182019Chubb Insurance GroupPQ CorporationFinancePersonal CareFood RetailOil&GasFinancial Management/FMCG/CFOUSApril 07,20182019Corporate Governance Report 20188Board of DirectorsBoard diversityThe working guidelines used for the selection of new Board members state tha
56、t 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(so as to support regular succession planning for the Board as a whole and for its various Committees
57、).The Nomination and Sustainability Committee shall periodically review the composition of the Board using various criteria,including,without limitation:the Board s cumulative experience and expertise in(international)business leadership,legal/compliance/risk management,science,fi nance,marketing,IT
58、,technology,government/politics and other relevant fi elds;diversity of competencies including education,function,industry and geographic business experience;the Board s diversity of personal attributes including gender,age,nationality,culture and leadership approach.The Board should at all times be
59、 composed of:a majority of independent members;and members with the specifi c abilities or skills to serve on one or more of the various Board Committees.3.1.1 Management tasks of the members of the Board of DirectorsWith the exception of Ulf Mark Schneider,all members of the Board of Directors are
60、non-executive members.Paul Bulcke is active Chairman and has certain responsibilities for the direction and control of the Group including Nestl Health Science S.A.,Nestl Skin Health S.A.and Nestl s engagement with L Oral.3.1.2 Information on non-executive members of the Board of DirectorsWith the e
61、xception 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 Nestl.Pursuant to Nestl s Board Regulations,a Director shall be considered independent,if he/she is not and
62、has not been employed as an executive offi cer at the Company or any of its principal subsidiaries or as employee or affi liate of the Group s external auditor for the past three years and does not maintain,in the sole determination of the Board,a material direct or indirect business relationship wi
63、th 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.Nestl s succession planning process is highly structured and managed by the Board s Nomination and Sus
64、tainability Committee with the support of outside consultants when necessary.Subject to specifi c exceptions granted by the Board,members are subject to twelve-year term limits.According to Nestl s Board Regulations(a),an age limit of 72 years applies.This allows for continuous refreshment and long-
65、term succession planning according to Nestl s skills and diversity grid.3.1.3 Cross-involvementNone.(a)Nestl S.A.s Board Regulations can be found on Governance Report 20189Board of Directors3.2 Professional background and other activities and functions(*)Paul BulckeChairmanPaul Bulcke began his care
66、er in 1977 as a fi nancial analyst for Scott Graphics International in Belgium before moving to the Nestl Group in 1979 as a marketing trainee.From 1980 to 1996,he held various responsibilities in Nestl Peru,Nestl Ecuador and Nestl Chile before moving back to Europe as Managing Director of Nestl Por
67、tugal,Nestl Czech and Slovak Republic,and Nestl Germany.In 2004,he was appointed Executive Vice President,responsible for Zone Americas.In April 2008,Paul Bulcke was elected member of the Board of Directors of Nestl S.A.and the Board appointed him Chief Executive Offi cer(CEO).As of December 31,2016
68、,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,he serves as Vice Chairman on the Board of L Oral S.A.,France.Paul Bulcke is also a Board membe
69、r of Roche Holding Ltd,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 Industrialists(ERT),Belgium,and the J.P.Morgan International Council.Ulf Mark SchneiderCEOMa
70、rk 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 Offi cer.He became CEO of Fresenius Group in 2003,a function he relinquished in 2016.Since January 2017,Mark Schneider has
71、 served as Chief Executive Offi cer(CEO)of Nestl S.A.In April 2017,Mark Schneider was elected member of the Board of Directors of Nestl S.A.As a representative of Nestl,Mark Schneider serves as Co-Chairman of the Board of Directors of Cereal Partners Worldwide S.A.,Switzerland.Furthermore,he is a me
72、mber of the Board of the Consumer Goods Forum and the International Business Council of the World Economic Forum(WEF).Henri de CastriesVice ChairmanLead Independent DirectorHenri de Castries started his career in the French Finance Ministry Inspection Offi ce,auditing government agencies from 1980 t
73、o 1984.In 1984,he joined the French Treasury Department.As of 1989,he joined AXA Corporate Finance Division.Two years later,he was appointed Senior Executive Vice President for the Group s asset management,fi nancial and real-estate business.Henri de Castries was Chairman of the AXA Management Board
74、 from May 2000 to April 2010.Since April 2010,following a modifi cation of the corporate governance structure,he was Chairman and CEO of AXA,functions he relinquished in 2016.In March 2016,Henri de Castries joined the Board of HSBC Holdings plc.and he serves on the Board of Argus Media since June 20
75、18.Beat W.HessBeat Hess started his career in 1977 at BBC Brown Boveri Ltd in Baden as Legal Counsel where he was promoted to General Counsel in 1986.From 1988 to 2003,he was Senior Group Offi cer,General Counsel and Secretary for ABB Ltd in Zurich.From 2003 until his retirement in January 2011,Beat
76、 Hess was Group Legal Director and a member of the Group Executive Committee of Royal Dutch Shell plc,The Hague,The Netherlands.Beat Hess is Chairman of LafargeHolcim Ltd.and Vice Chairman of Sonova Holding AG,Switzerland.He is also a member of the Curatorium of The Hague Academy of International La
77、w.(*)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 associations,charitable organizations,foundations,trusts and employee welfare f
78、oundations.Corporate Governance Report 201810Board of DirectorsRenato FassbindRenato Fassbind started his career in 1982 as Managing Director of Kunz Consulting AG.From 1984 until 1990,he was Auditor and ultimately Head of Internal Audit at F.Hoffmann-La Roche AG.Renato Fassbind then joined ABB Ltd
79、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 Diethelm Keller Holding AG as CEO from 2002 to 2004.He joined Credit Suisse Group AG as CFO and member of the Executive Board from 2004 until 2
80、010.Currently,Renato Fassbind serves as Vice Chairman of the Board of Directors of Swiss Re AG,is the Chairman of its Audit Committee and member of its Compensation Committee.Furthermore,Renato Fassbind serves on the Board of Khne+Nagel International AG and is a member of its Audit Committee.Jean-Pi
81、erre RothJean-Pierre Roth spent his whole career at the Swiss National Bank,which he joined in 1979.After various senior positions,he was appointed a member of the Governing Board in 1996 before becoming its Chairman in 2001 until 2009.From 2001,he was a member of,and since 2006 the Chairman of the
82、Board of Directors of the Bank of International Settlements until his retirement in 2009.Jean-Pierre Roth also served as Swiss Governor of the International Monetary Fund from 2001 until 2009 and as a Swiss representative on the Financial Stability Board from 2007 until 2009.As of 2010,Jean-Pierre R
83、oth has been a member of the Board of Swatch Group.Between 2010 and 2016,he was a member of the Board of Swiss Re and,until April 2017,Chairman of the Cantonal Bank of Geneva.In May 2014,he joined the Board of MKS(Switzerland)SA,and in July 2017 he became Vice Chairman of Arab Bank(Switzerland)Ltd.F
84、urthermore,Jean-Pierre Roth is a member of the Feris Endowment Fund IHEI,Geneva,and the Foundation of the Swiss Pontifi cal Guard,Vatican City.Ann M.VenemanAn attorney by training,Ann M.Veneman was Secretary of the United States Department of Agriculture(USDA)from 2001 to 2005.She then served a fi v
85、e-year term as the Executive Director of the United Nations Children s 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 a member of the Boards of the
86、 Global Health Innovative Technology Fund and Clinton Health Access Initiative.Ann M.Veneman is on a number of advisory boards including JUST Capital,BRAC,TerraVesco,Ukko,KDC Ag,Memphis Meats,Perfect Day and Full Harvest Technologies,Inc.She is a member of the Council on Foreign Relations and the Tr
87、ilateral Commission.In addition,Ann M.Veneman is a member of the Hilton Humanitarian Prize Jury.In 2009,she was named to Forbes The World s 100 Most Powerful Women list,and she has been the recipient of numerous awards and honors throughout her career.Ann M.Veneman also serves as member of the Nestl
88、 CSV 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 responsible for Greater China and Southeast Asia Region,a position she held until her reti
89、rement in 2011.Eva Cheng is most well-known for leading Amway s entry into China in 1991.She also held Amway China s Chairperson and CEO position since market launch until her retreat in 2011.In 2008 and 2009,Eva Cheng was twice named to Forbes The World s 100 Most Powerful Women list.She has also r
90、eceived 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,Haier Electronics Group Co.Ltd.in Hong Kong,China,and Amcor Ltd.,Australia.She is also the Executive Director of the
91、Our Hong Kong Foundation,a Director of China Children and Teenagers Foundation and a Council Member of the Hong Kong Academy of Performing Arts.Corporate Governance Report 201811Board of DirectorsRuth K.OniangoRuth K.Oniango was formerly Professor of Food Science and Nutrition at Jomo Kenyatta Unive
92、rsity of Agriculture and Technology,Nairobi,Kenya,and is adjunct Professor of Nutrition at Tufts University,USA.She is also Founder and Executive Director of the Rural Outreach Program Kenya,as well as Founder and Editor-in-Chief of the African Journal of Food,Agriculture,Nutrition and Development(A
93、JFAND).She has steered the development of nutrition policies across Africa and advocated for healthy diets globally.She has special focus on maternal and child nutrition.Ruth K.Oniang o is a former Member of Parliament in Kenya and she works in rural developments focused on women smallholder farmers
94、,and the youth.Furthermore,she chairs the Board of the Sasakawa Africa Association(SAA).Other engagements include being a Board member of the USTADI Foundation,Kenya,and a Trustee of the Board of CABI Centre for Agriculture and Biosciences International.Furthermore,she has earned a distinguished ser
95、vice medal from the Government of Kenya.She is the 2017 recipient of the Africa Food Prize.Ruth K.Oniang o serves as a member of the Nestl CSV Council.Patrick AebischerPatrick Aebischer was trained as an MD and neuroscientist at the University of Geneva and the University of Fribourg,Switzerland.He
96、is a Professor of neurosciences and Director of the Neurodegenerative Disease Research Laboratory 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 a
97、s a Professor and Director of Surgical Research Division and Gene Therapy Center at the University Hospital of Lausanne(CHUV).From 2000 to end 2016,Patrick Aebischer was the President of the Swiss Federal Institute of Technology Lausanne(EPFL).Furthermore,Patrick Aebischer is founder of three start-
98、ups:CytoTherapeutics Inc.(1989),Modex Therapeutics Inc.(1996)and Amazentis SA(2007).Currently,he serves as Board member of Lonza Group Ltd,and 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
99、of the Foundation Boards of the Verbier Festival and the Montreux Jazz Festival,Switzerland.Ursula M.BurnsUrsula M.Burns joined Xerox in 1980 and advanced through engineering and manufacturing functions to leadership positions in manufacturing,operations and product development.She was Chairman of t
100、he 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 Ltd.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
101、also provides leadership counsel to various community,educational and non-profi t organizations including the Massachusetts Institute of Technology,NAF(National Academy Foundation),the Mayo Clinic and the Ford Foundation as well as the New York Ballet and the Cornell Tech Board of Overseers and The
102、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 Rorsted started his career in sales and marketing positions within Oracle and Digital Equipment Corporation.From 1995,he held various international managem
103、ent positions at Compaq and from 2001 was General Manager for the company s Europe,Middle East&Africa(EMEA)business.In 2002,Compaq merged with Hewlett Packard.Between 2002 and 2004,Kasper Rorsted was Senior Vice President and General Manager at Hewlett Packard,where he last headed the EMEA business.
104、In April 2005,he joined Henkel as Executive Vice President Human Resources,Purchasing,Information Technologies and Infrastructure Services.In 2007,he 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 Exec
105、utive Board of adidas AG and became its CEO in October 2016.Kasper Rorsted also serves on the Board of Bertelsmann SE&Co.,KGA,Germany.Corporate Governance Report 201812Pablo IslaFrom 1988 to 1991,Pablo Isla was a Spanish State Attorney at the Ministry of Transport,Tourism and Communication.From 1992
106、 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 Secretary.From 2000 to 2005,Pablo Isla was Co-Exec
107、utive Chairman of Altadis Group,Spain.In 2005,he was named CEO and Deputy Chairman of Inditex S.A.,Spain,and was appointed Chairman of the company in 2011.From 2003 until 2017,he served as Independent Director on the Spanish telecom company,Telefonica S.A.Kimberly A.RossKimberly A.Ross started her f
108、i nance 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.In the same year,she joined Royal Ahold NV,Netherla
109、nds,and advanced through a series of successively responsible positions in treasury,tax and fi nance 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 served as CFO and Senior Vice President at Baker Hu
110、ghes LLC,USA,from 2014 until 2017.Kimberly A.Ross is also a member of the Boards of both Chubb Insurance Group and PQ Corporation,USA.3.3 Mandates outside NestlPursuant to art.21sexies of the Articles of Association,no member of the Board of Directors may hold more than 4 additional mandates in list
111、ed companies and 5 additional 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.No member o
112、f 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 governing bo
113、dy 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 restrictions.All
114、members of the Board of Directors comply with the provisions set out in art.21sexies.3.4 Elections and terms of offi cePursuant 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 the Board of
115、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 offi ce until completion of the next Annual General Meeting(art.15 of the Articles of Association).Members of the Board of Directors whose term
116、of offi ce 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 offi ce of a Board member shall expire no later than at the Annual General Meeting following the
117、member s 72nd birthday.Rules in the Articles of Association are compliant with 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 points 3.1.2 above and 3.
118、5.2 below.For the time of fi rst election and term of offi ce,see point 3.1 above.Corporate Governance Report 201813Board of Directors3.5 Internal organizational structure3.5.1 Allocation of tasks within the Board of Directors Chairman s Nomination and and Corporate Compensation Sustainability Audit
119、 Governance Committee Committee Committee CommitteePaul Bulcke (Chair)ChairmanUlf Mark Schneider CEO(Administrateur dlgu)Henri de Castries (Chair)Vice ChairmanLead Independent DirectorBeat W.Hess (Chair)Renato Fassbind (Chair)Jean-Pierre Roth Ann M.Veneman Eva Cheng Ruth K.Oniang o Patrick Aebischer
120、 Ursula M.Burns Kasper B.Rorsted Pablo Isla Kimberly A.Ross 3.5.2 Tasks and area of responsibility for each Committee of the Board of Directors(a)The powers and responsibilities of each Committee are established in the applicable Committee Charter,which is approved by the Board.Each Committee is ent
121、itled to engage outside counsel.Chairman s and Corporate Governance CommitteeThe Chairman s and Corporate Governance Committee consists of the Chairman,the Vice Chairman and Lead Independent Director,the CEO(Administrateur dlgu)and any other member elected by the Board.It liaises between the Chairma
122、n 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 Company s business.The Committee regularly reviews the corporate governance of the Company and prepares recommendations for the Board.It also advises on certa
123、in fi nance-related matters including the Company s fi nancing and fi nancial management and periodically reviews its asset and liability management.While the Committee has limited authority as per the Board Regulations,it may in exceptional and urgent matters deal with business matters which might
124、arise between Board meetings.In all cases it keeps the Board fully appraised.It reviews the Board s annual work plan.Compensation CommitteeThe Compensation Committee consists of a minimum of three non-executive members of the Board.All members are independent(art.19bis par.1 of the Articles of Assoc
125、iation).The members of the Compensation Committee are elected individually by the General Meeting for a term of offi ce until completion of the next Annual General Meeting.Members of the Compensation Committee whose term of offi ce has expired are immediately eligible for re-election.The Compensatio
126、n 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 Nestl S.A.and the Nestl Group.It prepares the proposals of the Board to be submitted for app
127、roval by the General Meeting in relation to the compensation of the Board of(a)For complete information please refer to the Board Regulations and Committee Charters on Governance Report 201814Board of DirectorsDirectors and the Executive Board.In addition,it proposes the remuneration of the Chairman
128、 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 CommitteeThe
129、Nomination and Sustainability Committee consists of a Chairperson,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 the Board.
130、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 proposal
131、 for the Board s decision.The nomination process for the Board of Directors is highly structured and long-term and seeks to ensure a balance of relevant competencies and an appropriate diversity of its members over time.The NSC regularly reviews the Companys skills and diversity grid(see 3.1.above).
132、It ensures an appropriately wide net is cast on key successions.The candidates to the Board must possess the necessary profi le,qualifi cations and experience to discharge their duties.Newly appointed Board members receive an appropriate introduction into the business and affairs of the Company and
133、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 as their outside mandates,and prepares the annual self-evaluation of the Board an
134、d its Committees.Furthermore,it reviews reports and gives advice on measures which ensure the long-term sustainability of the Company in its economic,social and environmental dimension and monitors the Company s performance against selected external sustainability indexes.It reviews the Company s co
135、mmitments on environmental,social and governance aspects as well as the annual Nestl in society report and discusses periodically how other material non-fi nancial issues affect the Company s fi nancial performance and how its long-term strategy relates to its ability to create shared value.It revie
136、ws as well the Company s shareholder base and other signifi cant stakeholders and their material interests.It meets as frequently as necessary to fulfi l its tasks and prepares the relevant in camera sessions of the Board of Directors.Audit CommitteeThe Audit Committee consists of a Chairperson,who
137、is an independent and non-executive member of the Board,and a minimum of two other non-executive members of the Board,excluding the CEO and any former member of the Executive Board.All members shall be independent.At least one member has to have recent and relevant fi nancial expertise,the others mu
138、st be familiar with the issues of accounting and audit.In discharging its responsibilities,it has unrestricted access to the Company s management,books and records.The Audit Committee supports the Board of Directors in its supervision of fi nancial controls through a direct link to KPMG(external aud
139、itors)and the Nestl Group Audit(corporate internal auditors).The Audit Committee s main duties include the following:to review,and challenge where necessary,the actions and judgements of management,in relation to the Company s year-end fi nancial accounts;to make recommendations to the Board of Dire
140、ctors 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 fi ndings of the audits and of their progress;to over
141、see 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 Group s annual risk assessment.The Audit Committee regularly reports to the
142、Board on its fi ndings and proposes appropriate actions.The responsibility for approving the annual Financial Statements remains with the Board of Directors.Corporate Governance Report 201815Board of Directors3.5.3 Work methods of the Board of Directors and its CommitteesThe Board meets as often as
143、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 dedicated Chairman s
144、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 company for three
145、 to fi ve days(in 2018,Nestl in the USA).The average attendance at the Board meetings was 98%.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%.Board meetings,with the exception of
146、certain Chairman s and in camera sessions,are attended by all members of the Executive Board.In addition,selected members of the Executive Board and senior management participate in certain Committee meetings.The Company performs annual self-evaluations of the Board and its Committees including conf
147、i dential,anonymous feedback and individual interviews.Findings are appropriately addressed.For example,the Board committee structure and reporting were reviewed.An open,transparent and critical board room culture forms the basis for the Board of Directors annual review of its own performance and ef
148、fectiveness.The Board of Directors conducts the self-assessment on the basis of anonymous questionnaires which deal with the Board s composition,organization and processess,the Board s responsibilities governed by the Board Regulations as well as the focus areas and goals of the year under review.Th
149、e topics are discussed and take-aways defi ned 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 it
150、s performance.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
151、an intermediary between the Chairman,the Board and the Board s 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.3.6 Defi nition of areas of responsibilityThe governing b
152、odies 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 Group s economic,social and environmental sustainability.The B
153、oard attends 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 specifi c regulations issued by the Board of Directors.Under Nestl s governance model,the CEO is a full member of the Board of Directors,e
154、nsuring full alignment on its critical responsibilities and proper checks and balance between Chairman and CEO.(1)For complete information,please refer to the Board Regulations and Committee Charters on held in 2018 Frequency Average duration(hours)Board of Directors of Nestl S.A.15 times 2:20Chairm
155、an s and Corporate Governance Committee 10 times 3:40Compensation Committee 3 times 1:15Nomination and Sustainability Committee 7 times 1:05Audit Committee 4 times 2:45Corporate Governance Report 201816Board of DirectorsThe Board has the following main duties:a)the ultimate direction of the Company,
156、in particular the conduct,management and supervision of the business of the Company,and the provision of necessary directions;b)the determination of the Company s organization;c)the determination of accounting and fi nancial control principles,as well as the principles of fi nancial planning;d)the a
157、ppointment and removal of any Vice Chairman,the Committee members(except the members of the Compensation 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 wi
158、th the law,the Articles of Association,the Board Regulations and instructions given from time to time 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 notifi cation of the court in the event
159、 of over indebtedness;h)the discussion and approval of:the Group s long-term strategy and annual investment budget;major fi nancial operations;any signifi cant policy issue dealing with the Company s or the Group s general structure or with fi nancial,commercial and industrial policy;Corporate Gover
160、nance Principles of the Company;the review of and decision on any report submitted to the Board;the Group s 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
161、 manage the Company s and the Group s business,subject to law,the Articles of Association and the Board Regulations.The CEO chairs the Executive Board and delegates to its members individually the powers necessary for carrying out their responsibilities,within the limits fi xed in the Executive Boar
162、d Regulations.3.7 Information and control instruments vis-vis the Executive BoardThe Board of Directors is,on a regular basis,informed on material matters involving the Company s and the Group s business.The members of the Executive Board attend the Board of Directors meetings and report on signifi
163、cant projects and events.In addition,regular written reports are provided,including consolidated fi nancial information,capital investment,compliance and strategy progress reports.The Chairman and the CEO ensure the proper information fl ow between the Executive Board and the Board of Directors.The
164、Board of Directors receives regular and ad hoc reports from the Board s Committees,the Chairman,the CEO as well as from the Executive Board.The minutes of Committee meetings are made available to the full Board.The Board pays a visit to a major market every year,where it meets members of senior mana
165、gement.In 2018,the Board visited the United States of America.Furthermore,the Audit Committee reviews the fi nancial performance and assesses the effectiveness of the internal and external audit processes as well as the internal risk management organization and processes.Members of the Executive Boa
166、rd and other senior management attend the Audit Committee meetings,except for certain in camera sessions.Additional information 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
167、 compliance with Swiss law and in accordance with Swiss Auditing Standards and International Standards on Auditing;the Nestl Group and Market Audit function,the corporate internal auditors,which has a direct link to the Audit Committee.It comprises a unit of international auditors who travel worldwi
168、de,completing audit assignments;Group Risk Management provides assistance to all corporate entities with regard to risk management and a top-level risk assessment is performed once a year for all businesses.Group Risk Services provides assistance to all corporate entities with regard to loss prevent
169、ion,claims handling and insurance.For more information,please refer to page 54 of the Annual Review 2018;Corporate Governance Report 201817Board of Directors Group Compliance and other risk-and control-related functions provide additional guidance and oversight.Risk and compliance activities are reg
170、ularly coordinated through the Group Compliance Committee to ensure a holistic,entity-wide approach.For more information,please refer to page 64 of the Annual Review 2018.Corporate Governance Report 201818Executive Board4.Executive Board4.1 Members of the Executive Board(December 31,2018)Name Year o
171、f birth Nationality Education/Current functionUlf Mark Schneider 1965 German/US Economics,Business Administration and Finance&Accounting CEO:Nestl S.A.Laurent Freixe 1962 French Business Administration EVP&CEO:Zone AmericasChris Johnson 1961 US Economics and Business Administration EVP:Group Human R
172、esources&Business ServicesPatrice Bula 1956 Swiss Economics and Business Administration EVP:Strategic Business Units,Marketing,Sales and NespressoWan Ling Martello 1958 US Business Administration and Accountancy,Postgraduate in Management Information Systems EVP&CEO:Zone Asia,Oceania and sub-Saharan
173、 AfricaMarco Settembri 1959 Italian Business Administration EVP&CEO:Zone Europe,Middle East and North AfricaFranois-Xavier Roger 1962 French Business Administration and Accounting EVP:CFO(includes Finance and Control,Legal,IP,M&A,Tax,Treasury,Investor Relations)Magdi Batato 1959 Swiss Mechanical Eng
174、ineering and PhD in Thermodynamics EVP:OperationsStefan Palzer 1969 German PhD Process Engineering,Food Technology,Industrial Engineering and Chemical Engineering EVP:Chief Technology Offi cer:Innovation,Technology and R&DMaurizio Patarnello 1966 Italian Business Administration Deputy EVP:Nestl Wate
175、rsGrgory Behar 1969 Swiss Mechanical Engineering and Business Administration CEO:Nestl Health ScienceDavid P.Frick 1965 Swiss Law SVP:Corporate Governance,Compliance and Corporate Services(EVP:Executive Vice President;SVP:Senior Vice President,CEO:Chief Executive Offi cer)For complete information,pl
176、ease refer to individual CVs on Governance Report 201819Executive 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 as a sales representative and got increasing responsibili
177、ties in the fi eld 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 Market Head of the Iberian Region taking responsibility for Sp
178、ain 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 Vice President for Zone Americas.As a representative of Nestl,he is a member of the Board of Directors of Cereal Partners W
179、orldwide S.A.,Switzerland,and of the Regional Board of Directors of the Consumer Goods Forum in Latin America.Laurent Freixe has been named International Youth Ambassador by the International Youth Organization for Ibero-America.Chris JohnsonChris Johnson started his career with Nestl in 1983 as a m
180、arketing trainee at Carnation Inc.During his fi rst eight years,he took on increasing responsibilities mainly in the commercial area at Nestl USA and then,from 1991,in Japan.Senior Area Manager for the Asian region of Nestl Waters in Paris from 1995,he was then transferred to Taiwan in 1998 as Marke
181、t 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 appointed Deputy Executive Vice President in April 2001,and later moved back to Japan in 2007 as Market Head.From January 201
182、1 to October 2014,Chris Johnson was Executive Vice President responsible for Zone Americas.Effective October 2014,he was appointed Executive Vice President of Nestl S.A.in charge of Nestl Business Excellence.As of August 2018,Chris Johnson assumes new responsibilities in addition to his current ones
183、 and was appointed Head of Group Human Resources&Business Services.Chris Johnson is a Board member of GS1,Belgium,and 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 and Sales in Kenya,
184、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 Nestl s International Headq
185、uarters 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 Nestl S.A.as Executive Vice President with responsi
186、bility for the Strategic Business Units,Marketing,Sales and Nespresso.Patrice Bula serves on the Boards of Schindler Holding Ltd.and Bobst Group SA,both in Switzerland.As a representative of Nestl,Patrice Bula serves as Chairman of Blue Bottle Coffee Inc.,USA,as a Board member of Cereal Partners Wor
187、ldwide 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 controlle
188、d by it,(4)mandates held in associations,charitable organizations,foundations,trusts and employee welfare foundations.Corporate Governance Report 201820Executive BoardWan Ling MartelloWan Ling Martello joined Nestl S.A.as Executive Vice President in November 2011 and was the Chief Financial Offi cer
189、 from April 2012 until May 2015.As of May 2015,she was appointed Executive Vice President of Nestl S.A.in charge of Zone AOA(Asia,Oceania and sub-Saharan Africa).Wan Ling Martello came to Nestl S.A.from Walmart Stores Inc.,where she was EVP,Global eCommerce in 2010 and 2011.From 2005 to 2009,she was
190、 SVP,CFO&Strategy for Walmart International.Prior to Walmart,Wan Ling Martello built her career in the consumer packaged goods industry.She worked at Kraft in increasingly broader fi nance roles from 1985 to 1995.She was the Corporate Controller at Borden Foods during its turnaround years owned by K
191、KR in 1995 until 1998.Wan Ling Martello was the CFO and then the President of the U.S.business of NCH,a former subsidiary of AC Nielsen,from 1998 to 2005.Wan Ling Martello serves on the Boards of Alibaba Group Holding Ltd.,China,and Uber Technologies Inc.,USA.As a representative of Nestl,Wan Ling Ma
192、rtello is a member of the Board of Cereal Partners Worldwide S.A.,Switzerland,and Blue Bottle Coffee Inc.,USA.Marco SettembriMarco Settembri joined the Nestl Group with Nestl Italiana S.p.A.in 1987 and was entrusted with various responsibilities,mainly in the PetCare area.He was appointed Managing D
193、irector 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 strong export stream of the emblematic Italian brands.In 2006,he took over the position of Market Head in Italy in addition to his
194、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 to the Executive Board of Nestl S.A.as Executive Vice President,Head of Nestl Waters of the Nestl Group.As of January 2017,Marco
195、 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 Nestl Produits Frais S.A.S,France,and of Cereal Partners Worldwide S.A.,Switzerland.In addition,Marco Settembri is a member of th
196、e Boards of FoodDrinkEurope and of the Association des Industries de Marque de l Union Europenne(AIM)in Belgium.Franois-Xavier Roger In July 2015,Franois-Xavier Roger joined Nestl S.A.as Executive Vice President and Chief Financial Offi cer.Franois-Xavier Roger came to Nestl S.A.from Takeda Pharmace
197、utical,Tokyo,where he was CFO since 2013.From 2008 to 2013,he was Chief Financial Offi cer of Millicom based in Luxembourg.From 2000 to 2008,he worked as Chief Financial Offi cer for Danone Asia,followed by Head of Finance,Treasury and Tax for the Danone Group based in Paris,France.Magdi Batato Magd
198、i 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 university and consulting before joining Nestl S.A.in 1991 in Switzerland as Engineer in Industrial Services,Energy&Environ
199、ment.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,in 2009,he moved to Nestl UK&Ireland as Head of Group Technical.In May 2012,he took up the position of Market Head Pakist
200、an.Effective October 2015,he was appointed Executive Vice President of Nestl S.A.in charge of Operations.Magdi Batato is a member of the Board of Carlsberg A/S.Corporate Governance Report 201821Executive BoardStefan PalzerStefan Palzer studied food engineering and marketing.He obtained a PhD in Chem
201、ical Engineering from the Technical University of Munich and was appointed Professor for Food and Chemical Engineering by the Universities of Hamburg,Stuttgart and Sheffi eld.Stefan Palzer joined the Nestl Group in 2000 as project manager in the Product Technology Centre,Kemptthal.From 2003 to 2010,
202、he held positions of increasing responsibility at 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,Stefan Palzer was Global R&D Manager in the Strategic Business Unit
203、 for Beverages.In 2016,he was appointed Head of the 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 Offi cer.In addition,he is a member of the Executive Board of the European Academy of Food E
204、ngineering(EAFE),a Board member of the Nutrition Cluster Berlin and a member of the Strategic 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).Maurizio PatarnelloMaurizio Pata
205、rnello joined Nestl S.A.in 1993 and held several positions in Finance 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
206、in Dubai and was promoted Chief Operating Offi cer and Regional Business 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 Patarnell
207、o took up the position of Market Head for Nestl Russia and Eurasia Region in October 2012.Effective January 2017,he was appointed Deputy Executive Vice President of Nestl S.A.and Head of Nestl Waters.Grgory BeharGrgory(Greg)Behar joined Nestl S.A.in 2014 as CEO of Nestl Health Science.Greg Behar cam
208、e to Nestl S.A.from Boehringer Ingelheim Pharmaceuticals Inc.,USA,where 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 th
209、e Cardiovascular and Metabolism Franchise from 2009 to 2010.Furthermore,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 in
210、vestments,including Nutrition Science Partners,HK,Cerecin Inc.,USA,Seres Therapeutics Inc.,USA,Aimmune Therapeutics Inc.,USA,and Axcella Health Inc.,USA.David P.FrickDavid P.Frick began his career at the Meilen District Court in Zurich and as an assistant to the Banking Law Chair at Zurich Universit
211、y Law School.From 1994,he was an attorney in the International Corporate and Litigation practice groups of Cravath,Swaine&Moore,the New York law fi rm.In 1999,he became Group General Counsel and Managing Director of Credit Suisse Group,Zurich,where he was appointed a Member of the Executive Board an
212、d served as the company s Head of Legal and Compliance.David Frick joined Nestl S.A.in 2006 and serves as Senior Vice President,Corporate Governance,Compliance and Corporate Services.Furthermore,he is a member of the Board of economiesuisse and chairs its Legal Commission.David Frick represents Nest
213、l at SwissHoldings and serves on the SIX Regulatory Board,ICC Switzerland and the Legal Committee for the Swiss-American Chamber of Commerce.Corporate Governance Report 201822Compensation,shareholdings and loansExecutive Board4.3 Mandates outside NestlPursuant to art.21sexies of the Articles of Asso
214、ciation,no member of the Executive Board may hold more than 2 additional mandates in listed companies and 4 additional mandates in non-listed companies.Each of these mandates is subject to a specifi c approval by the Board of Directors.The following mandates are not subject to these limitations:a)ma
215、ndates in companies which are controlled by Nestl;b)mandates which a member of the Executive Board holds at the request of Nestl or companies controlled by it.No member of the Executive Board shall hold more than 10 such mandates;and c)mandates in associations,charitable organizations,foundations,tr
216、usts and employee welfare foundations.No member of the Executive Board shall 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 differe
217、nt legal entities which are under joint control are deemed one mandate.The 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 cont
218、racts with third parties at Nestl.5.Compensation,shareholdings and loansPlease refer to the Compensation Report 2018,page 29.Corporate Governance Report 201823Shareholders participation6.Shareholders participation rights6.1 Voting rights restrictions and representation 6.1.1 Voting rights restrictio
219、ns and rules on granting exceptions and6.1.3 Reasons for granting exceptions 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 m
220、ay exercise the voting rights or the other rights related thereto(art.5 par.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 regist
221、er.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 acting in concert to circumvent such a limit shall be counted as one shareh
222、older(art.11 par.2 of the Articles of Association;see art.11 par.3 of the Articles 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 m
223、ay by means of regulations or agreements depart from the limit of 5%of the share capital as recorded in the commercial register(art.5 par.6 and par.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
224、 to the following Nominees N:Chase Nominees Ltd,London,and Citibank N.A.,London,as depositary for shares represented by American Depositary Receipts(please refer to point 2.6.3).Pursuant to art.5 par.9 and 11 par.4 of the Articles of Association,the Board of Directors has conferred to Credit Suisse
225、AG and UBS AG as custodians the right to vote shares in excess of 5%on the basis of specifi c 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
226、 Articles of Association relating to:(i)restrictions on the exercise of voting 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 r
227、epresented and the absolute majority of the nominal value represented at the General 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 se
228、t out by Swiss law in the Articles of Association.Shareholders with voting rights 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 se
229、t out by Swiss law applies to instructions in written or electronic form to the independent representative for participation in the General Meeting of shareholders.There are no specifi c provisions related thereto in the Articles of Association.6.2 Quorums required by the Articles of AssociationPlea
230、se refer to art.13 of the Articles of Association.6.3 Convocation of the General Meeting of shareholdersNestl S.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 comb
231、ined holdings represent at least 10%of the share capital as recorded in the commercial register must be held as promptly as practicable following such request(art.8 par.2 of the Articles of Association).Corporate Governance Report 201824Shareholders participationChange of control and defence measure
232、s6.4 Inclusion of items on the agendaOne or more shareholders with voting rights 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 t
233、he Board of Directors at the latest 45 days before the meeting and specifying the 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
234、the basis of the registrations appearing in the share register is set by the Board of Directors.7.Change of control and defense measures7.1 Duty to make an offerNestl S.A.does not have a provision on opting out or opting up in the Articles of Association.Thus,the provisions regarding the legally pre
235、scribed threshold of 33%of the voting rights for making a public takeover offer 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 201825Auditors8.Auditors8.1 Duration of the mand
236、ate and term of offi ce of the lead auditorKPMG Klynveld Peat Marwick Goerdeler SA were fi rst appointed on May 22,1993,and KPMG SA(replacing KPMG Klynveld Peat Marwick Goerdeler SA)were fi rst appointed on April 23,2009 as auditors of Nestl S.A.On April 12,2018,KPMG SA(hereafter“KPMG”)were appointe
237、d as auditors of the Financial Statements of Nestl S.A.and of the Consolidated Financial Statements of the Nestl Group for a term of offi ce of one year.The audit report is signed jointly by two KPMG partners on behalf of KPMG.The fi rst year that Mr.Scott Cormack,in his capacity as lead auditor,sig
238、ned the Financial Statements of Nestl S.A.and the Consolidated Financial Statements of the Nestl 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 audito
239、rs for 2018 amount to CHF 42 million.8.3 Additional feesIn addition,KPMG provided non-audit services amounting to CHF 9.7 million,including CHF 5.6 million for mergers and disposals services,CHF 1.2 million for tax services,CHF 1.0 million for IS/IT advisory support,and CHF 1.9 million for other var
240、ious non-audit services.8.4 Information instruments pertaining to the external auditKPMG presents to the Audit Committee a detailed report on the conduct of the Financial Statements audit,the fi ndings on signifi cant fi nancial accounting and reporting issues together with the fi ndings on the inte
241、rnal control system as well as an overview of issues found during the interim audit.In 2018,KPMG participated in all four Audit Committee meetings at the end of which they met with the Audit Committee without the Group s management being present.Nestl Internal Audit(corporate internal auditors)met f
242、our times with the Audit Committee.In addition,the head of internal audit regularly met with the Chairman of the Audit Committee for interim updates.The Audit Committee reviews annually the appropriateness of renewing the mandate to KPMG as the auditor of the Nestl Group and Nestl S.A.,prior to subm
243、itting to the Board and to the Annual General Meeting of Nestl S.A.its proposal for the election of the auditor.The Audit Committee assesses the effectiveness of the work of the auditors in accordance with Swiss law,based on their understanding of the Group s business,control,accounting and reportin
244、g issues,together with the way in which matters signifi cant at Group level or in the statutory accounts are identifi ed and resolved.The Audit Committee is also informed on the work of the auditors through regular briefi ngs of its Chairman.Audit fees are ultimately approved by the Audit Committee.
245、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 due diligence on mergers,acquisitions and disposals and certain tax and business risk assurance and IS/IT advisory support.These guidelines ensure KPMG s ind
246、ependence in their capacity as auditors to the Group.KPMG monitors its independence throughout the year and confi rms its independence to the Audit Committee annually.In October 2018,the Audit Committee invited several audit fi rms,including KPMG,to participate in a tender process which will lead to
247、 the selection of the audit fi rm to be proposed for election at the Annual General Meeting 2020.Corporate Governance Report 201826Information policy9.Information policy Investor Relations guiding principlesNestl is committed to managing an open and consistent communication policy with shareholders
248、and other interested parties.The objective is to ensure that the perception of those parties about the historical record,current performance and future prospects of Nestl is in line with management s understanding of the actual situation at Nestl.The guiding principles of this policy are that Nestl
249、gives equal treatment to shareholders in equal situations,that any price-sensitive information is published in a timely fashion and 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
250、,which consists of i)the Annual Review,ii)the Consolidated Financial Statements of the Nestl Group,iii)the Financial Statements of Nestl S.A.,iv)the Corporate Governance Report,and v)the Compensation Report.The Consolidated Financial Statements are prepared according to the International Financial R
251、eporting Standards(IFRS).The Half-Yearly Report,consisting of the Half-Yearly Income Statement,Balance Sheet and Cash Flow Statement,complements the Annual Report.The Company also issues annually its Creating Shared Value(CSV)report.Nestl publishes its full results for the full-year and the half-yea
252、r.Additionally,the Company publishes its sales fi gures for the fi rst three-months and nine-months.Press releases accompany the fi nancial results and sales announcements,and are also issued at the time of potentially price-sensitive events,such as signifi cant acquisitions and divestments,joint ve
253、nture agreements or alliances.These communications are publically available on the internet.Major announcements,such as results of 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.Fur
254、thermore,Nestl has an active investor relations(IR)program.Throughout the year,IR engages with investors(current or prospective)and the relevant sell-side analysts in meetings,conference calls,roadshows,broker conferences,or other events.In certain cases,members of management might also participate
255、in some meetings with the fi nancial community,including both group meetings and one-to-one meetings.Topics of discussion may include recently announced fi nancial results,recent corporate activity,or the longer-term strategy of the Group;they are not an occasion for the disclosure of new informatio
256、n which might encourage on investment decision.Specifi cally on governance topics,the Company engages into an active dialogue with investors through regular Chairman s roundtables,surveys and bilateral exchanges which are reported to the Chairman s and Corporate Governance Committee or the Board.The
257、 Company uses the internet( ensure a rapid and equitable distribution of information.There are also links to non-fi nancial information that may be of interest to investors,including areas such as the environment,sustainability and news about brands and innovation.A Corporate calendar of relevant da
258、tes is displayed on page 65 of the Annual Review 2018 and available on the IR events pages.( Nestl Investor Relations Department can be contacted via the following coordinates:Contact Investor Relations Nestl S.A.,Avenue Nestl 55 CH-1800 Vevey(Switzerland)Tel.+41(0)21 924 35 09 E-mail:Corporate Gove
259、rnance Report 201827General Organization of Nestl S.A.at December 31,2018Executive BoardUlf Mark SchneiderLaurent FreixeChris JohnsonPatrice BulaWan Ling MartelloMarco SettembriFranois-Xavier RogerMagdi BatatoStefan PalzerMaurizio PatarnelloGreg BeharDavid P.FrickChairman of the Board of DirectorsCh
260、ief Executive Offi cerNestl Skin HealthNestl Health ScienceZone AOA:Asia,Oceania and sub-Saharan AfricaZone AMS:AmericasCorporate CommunicationsOrganizational Effi ciencyHuman Resources&Business ServicesCorporate Governance Compliance&Corporate ServicesOperationsFinance&ControlNestl WatersZone EMENA
261、:Europe,Middle East&North AfricaStrategic Business Units,Marketing and SalesInnovation Technology and R&DPaul BulckeUlf Mark SchneiderStuart RaetzmanGreg BeharWan Ling MartelloLaurent FreixeEugenio SimioniWolfgang PasewaldChris JohnsonDavid P.FrickMagdi BatatoFranois-Xavier RogerMaurizio PatarnelloP
262、atrice BulaStefan PalzerMarco SettembriCorporate Governance Report 201828CompensationReport 2018Compensation Report 20182930Compensation Report 2018Compensation Report 2018Introduction The future success of Nestl is dependent on its ability to attract,motivate and retain the right talented employees
263、.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 corporate social responsibility.Therefore,remuneration at Nestl is based on the following principles:pay for performance to suppo
264、rt the Company s short-term and long-term objectives;compensation aligned with long-term Group strategy and shareholders interests;coherence in our remuneration plans and levels throughout the Company;competitiveness versus external market comparisons;appropriate balance of fi xed and variable remun
265、eration and short-term and long-term rewards.As in previous years,this Compensation Report shall be submitted to the advisory vote of the shareholders at the Annual General Meeting 2019.At the 2018 Annual General Meeting,shareholders approved the total compensation budgets for the Board of Directors
266、 and the Executive Board with large majorities.As explained at that time,to ensure complete accountability,the shareholders will this year be able to retrospectively vote on the Compensation Report and payouts in a consultative vote.In light of the signifi cant changes to Nestl s Long-Term Incentive
267、 plan in 2018,no additional structural changes will be introduced for 2019 to maintain consistency.31Compensation Report 2018Compensation Report 2018GovernanceThe Board of Directors has the overall responsibility for defi ning the compensation principles used in the Group.Pursuant to art.21bis of Ne
268、stl s 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 Board of Directors.As of December 31,2018,the governance for setting the compensation of the members of the Board of Directors
269、and the Executive Board is defi ned as follows:Compensation of Recommended by Approved byBoard of Directors as a whole Board of Directors ShareholdersExecutive Board as a whole Board of Directors ShareholdersChairman of the Board,CEO Compensation Committee Board of Directors(a)Non-executive members
270、of the Board of Directors Compensation Committee Board of Directors(b)Members of the Executive Board CEO together with Chairman Compensation Committee(a)Chairman as well as CEO not voting on own compensation,and not participating in the relevant meetings.(b)Members not voting on own compensation to
271、the extent that Committee fees are concerned.Compensation Committee(CC)The CC is governed by the Compensation Committee 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
272、 shall be a minimum of three other non-executive members of the Board.The members of the CC have been elected by the shareholders for one year.The Chairperson was appointed by the Board of Directors.On December 31,2018,the composition of the CC is as follows:Chairman MembersBeat W.Hess Jean-Pierre R
273、oth Patrick Aebischer Ursula M.BurnsThe tasks and areas of responsibility of the CC are described on page 13 of the Corporate Governance Report 2018.(*)Nestl S.A.s Articles of Association can be found on page 51 and on Report 2018Compensation Report 2018Board of DirectorsPrinciples of compensation f
274、or the members of the Board of DirectorsGovernancePursuant to art.21bis par.1 of Nestl s Articles of Association,the General Meeting 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
275、until the next Annual General Meeting(a).In the event the General Meeting has not approved a proposal of the Board of Directors,the 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
276、account(i)the proposed maximum aggregate amount of compensation;(ii)the decision of the General Meeting and,to the extent known to the Board of Directors,the main reasons for the negative vote;and(iii)Nestl s compensation principles;andb)the Board of Directors submits the amount(s)so determined to a
277、pproval by the same General Meeting,a subsequent Extraordinary General Meeting or the next Annual General Meeting(art.21bis par.2 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 Ob
278、ligations.Members of the Board of Directors could be obligated to return benefi ts received from the Company to the extent these are manifestly disproportionate to the performance rendered in return and to the Company s economic situation(including as a result of fraud or accounting misstatement).Pr
279、inciplesThe remuneration of the members of the Board of Directors is set to attract and retain highly qualifi ed individuals to serve on the Board of Directors.The level of remuneration refl ects the time and effort required from the members in fulfi lling their Board and Committee responsibilities.
280、The pay structure(cash and blocked shares)is designed to ensure the Board s focus on the long-term success of the Company.There is no variable compensation for non-executive members of the Board of Directors,in order to ensure a proper level of independence.The principal benchmark used to defi ne Bo
281、ard remuneration is a selection of large Swiss Market Index(SMI)companies(b),adjusted for the size of Nestl.These fi gures are periodically reviewed against this benchmark.Compensation 2018 for the members of the Board of DirectorsBoard membership fees and allowancesWith the exception of the Chairma
282、n and the CEO,each member of the Board of Directors receives a Board membership fee of CHF 280 000 and an Expense Allowance of CHF 15 000.These fi gures have remained unchanged since 2006.(a)The Board of Directors may submit for approval by the General Meeting deviating or additional proposals relat
283、ing to the same or different periods.(b)Novartis,Roche,Richemont,ABB,Syngenta,UBS and Credit Suisse.33Compensation Report 2018Compensation Report 2018Members of a Board Committee receive the following additional fees(a):Chair MembersChairman s and Corporate Governance Committee CHF 300 000 CHF 200 0
284、00Compensation Committee CHF 150 000 CHF 70 000Nomination and Sustainability Committee CHF 150 000 CHF 70 000Audit Committee CHF 150 000 CHF 100 000(a)The Chairman and the CEO Committee fees are included in their total remuneration.Committee membership on December 31,2018 Chairman s Nomination and a
285、nd Corporate Compensation Sustainability Audit Governance Committee Committee Committee CommitteePaul Bulcke,Chairman (Chair)Ulf Mark Schneider,CEO Henri de Castries,Vice Chairman,Lead Independent Director (Chair)Beat W.Hess (Chair)Renato Fassbind (Chair)Jean-Pierre Roth Ann M.Veneman Eva Cheng Ruth
286、 K.Oniang o Patrick Aebischer Ursula M.Burns Kasper B.Rorsted Pablo Isla Kimberly A.Ross The above fees and allowances cover the period between the Annual General Meeting 2018 and the Annual General Meeting 2019.They are paid in two instalments.Board membership and Committee fees are paid 50%in cash
287、 and 50%in Nestl S.A.shares,which are subject to a three-year blocking period.The blocking period remains applicable upon termination of the mandate.The number of Nestl S.A.shares is determined by taking the closing price of the share on the SIX Swiss Exchange on the ex-dividend date of the respecti
288、ve fi nancial year.For valuation purposes,the shares are discounted by 16.038%to account for the blocking period of three years.In 2018,the value was CHF 62.69.Compensation Payout 2018At the Annual General Meeting of April 12,2018,the shareholders approved a maximum compensation for the Board of Dir
289、ectors of CHF 10.0 million for the period from the Annual General Meeting 2018 to the Annual General Meeting 2019.The total actual compensation pay-out for this period including social security contributions is CHF 8 707 990.34Compensation Report 2018Compensation Report 2018Summary of compensation 2
290、018*Cash in CHF(a)Numberof sharesDiscount value ofshares in CHF(b)Total Cash&SharesSocial security&addit.Fees(c)TotalCompensationPaul Bulcke,Chairman 510 000 47 148 2 955 708 3 465 708 28 200 3 493 908 Ulf Mark Schneider,Chief Executive Offi cer(d)Henri de Castries,Vice Chairman,Lead Independent Dir
291、ector380 000 4 889 306 491 686 491 28 200 714 691 Beat W.Hess330 000 4 220 264 552 594 552 28 200 622 752 Renato Fassbind330 000 4 220 264 552 594 552 28 200 622 752 Jean-Pierre Roth190 000 2 344 146 945 336 945 15 639 352 584 Ann M.Veneman190 000 2 344 146 945 336 945 25 000 361 945 Eva Cheng240 00
292、0 3 014 188 948 428 948 20 354 449 302 Ruth K.Oniang o155 000 1 876 117 606 272 606 37 341 309 947 Patrick Aebischer 190 000 2 344 146 945 336 945 27 012 363 957 Ursula M.Burns190 000 2 344 146 945 336 945 16 500 353 445 Kasper B.Rorsted155 000 1 876 117 606 272 606 13 202 285 808 Pablo Isla155 000
293、1 876 117 606 272 606 13 202 285 808 Kimberly A.Ross205 000 2 545 159 546 364 546 364 546 Total for 20183 220 000 81 040 5 080 395 8 300 395 281 050 8 581 445*For all Board members except the Chairman and the CEO,the above table shows the annual compensation paid semi-annually in April and October d
294、uring the respective year covering the twelve-month period starting with the Annual General Meeting.(a)The cash amount includes the expense allowance of CHF 15 000.The Chairman receives no expense allowance.(b)Nestl S.A.shares received as part of Board membership and Committee fees are valued at the
295、 closing price of the share on the SIX Swiss Exchange on the ex-dividend date,discounted by 16.038%to account for the blocking period of three years.(c)Since Company contributions to social security are based on full earnings,whereas benefi ts are capped,only contributions that lead to future benefi
296、 ts are included.The additional cost to the Company taking into account full social security employer contributions is CHF 155 161 in 2018.For details of additional fees,see page 37.(d)The CEO s compensation is disclosed in its entirety under compensation of the Executive Board.(*)Sections highlight
297、ed with a blue bar 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(*)Total Cash&Shares3 465 708686 491594 552594 552336 945336 945428 948272 606336 945336 945272 606272 60
298、6364 5468 300 39535Compensation Report 2018Compensation Report 2018Summary of compensation 2017*Cash in CHF(a)Numberof sharesDiscount value ofshares in CHF(b)Total Cash&SharesSocial security&addit.Fees(c)TotalCompensationPaul Bulcke,Chairman April-Dec.450 000 51 588 3 274 806 3 724 806 21 150 3 745
299、956 Peter Brabeck-Letmathe,Chairman Jan.-March400 000 400 000 7 050 407 050 Ulf Mark Schneider,Chief Executive Offi cer(d)Andreas Koopmann,Vice Chairman270 000 3 903 247 762 517 762 24 902 542 664 Henri de Castries,Lead Independent Director355 000 4 498 285 533 640 533 28 200 668 733 Beat W.Hess330
300、000 4 167 264 521 594 521 28 200 622 721 Renato Fassbind330 000 4 167 264 521 594 521 28 200 622 721 Steven G.Hoch175 000 2 117 134 387 309 387 309 387 Nana Lal Kidwai205 000 2 514 159 589 364 589 17 913 382 502 Jean-Pierre Roth190 000 2 315 146 956 336 956 15 638 352 594 Ann M.Veneman175 000 2 117
301、134 387 309 387 25 000 334 387 Eva Cheng205 000 2 514 159 589 364 589 17 052 381 641 Ruth K.Oniang o155 000 1 852 117 565 272 565 37 338 309 903 Patrick Aebischer 190 000 2 315 146 956 336 956 27 012 363 968 Ursula M.Burns155 000 1 852 117 565 272 565 13 199 285 764 Total for 20173 585 000 85 919 5
302、454 137 9 039 137 290 854 9 329 991*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 starting with the Annual General Meeting.(a)The cash amount incl
303、udes the expense allowance of CHF 15 000.The Chairman receives no expense allowance.(b)Nestl S.A.shares received as part of Board membership and Committee fees are valued at the closing price of the share on the SIX Swiss Exchange on the ex-dividend date,discounted by 16.038%to account for the block
304、ing period of three years.(c)Since Company contributions to social security are based on full earnings,whereas benefi ts are capped,only contributions that lead to future benefi ts are included.The additional cost to the Company taking into account full social security employer contributions is CHF
305、181 282 in 2017.For details of additional fees,see page 37.(d)The CEO s 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 disclose pursuant to art.14 to 16 of
306、the Ordinance against excessive compensation in listed companies.Total Cash&Shares3 724 806400 000517 762640 533594 521594 521309 387364 589336 956309 387364 589272 565336 956272 5659 039 137Audited(*)36Compensation Report 2018Compensation Report 2018Paul Bulcke in his capacity as active Chairman,re
307、ceived a cash compensation as well as Nestl S.A.shares,which are blocked for three years.This in particular refl ects certain responsibilities for the direction and control of the Group including the support to the CEO,the support of Nestl Health Science and Nestl Skin Health through the respective
308、Strategic Advisory Boards,and the direct leadership of Nestl s interests in LOral.Paul Bulcke also chairs the 2030 Water Resources Group(WRG),represents Nestl as member of the European Roundtable of Industrialists(ERT),and as member of the WEF Chairman Round Table.The remuneration includes all compe
309、nsation received in relation to these activities.His total compensation was:20182017NumberValue in CHFNumberValue in CHFCash compensation510 000450 000(b)Blocked shares(discounted value)47 1482 955 70851 5883 274 806Total Cash&Shares3 465 7083 724 806Company contribution to compulsory Swiss social s
310、ecurity(a)28 20021 150Total compensation 3 493 9083 745 956(a)Since Company contributions to social security are based on full earnings,whereas benefi ts are capped,only contributions that lead to future benefi ts are included.The additional cost to the Company taking into account full social securi
311、ty employer contributions is CHF 146 804 in 2018 and CHF 163 981 in 2017.(b)Pro-rated remuneration for the period April-December.Shares and stock options ownership of the non-executive members of the Board of Directors and closely related parties on December 31,2018Number of shares held(a)Number ofo
312、ptions held(b)Paul Bulcke,Chairman 1 391 207 Henri de Castries,Vice Chairman,Lead Independent Director 23 829 Beat W.Hess 45 649 Renato Fassbind 27 141 Jean-Pierre Roth 13 875 Ann M.Veneman 19 305 Eva Cheng 15 783 Ruth K.Oniango 7 619 Patrick Aebischer 4 659 Ursula M.Burns 4 196 Kasper B.Rorsted 1 8
313、76 Pablo Isla 1 876 Kimberly A.Ross 2 545 Total as at December 31,20181 559 560 Total as at December 31,20171 686 408 420 000(a)Including shares subject to a three-year blocking period.(b)The ratio is one option for one Nestl S.A.share.Audited37Compensation Report 2018Compensation Report 2018Audited
314、Other audited information regarding the Board of DirectorsLoansThere are no loans to members of the Board of Directors.Loans to a member of the Board of Directors may only be granted at market conditions and may,at the time of grant,not exceed the respective member s most recent total annual compens
315、ation(art.21septies of the Articles of Association).Additional fees and remuneration of the Board of DirectorsThere are no additional fees or remuneration paid by Nestl S.A.or any of its Group companies,directly or indirectly,to members of the Board of Directors,except for CHF 25 000 paid to Ann M.V
316、eneman and to Ruth K.Oniango who serve as members of the Creating Shared Value(CSV)Council,and CHF 10 000 paid to Patrick Aebischer who serves on the Steering Committee of the Nestl Institute of Health Sciences.Compensation and loans for former members of the Board of DirectorsThere is no compensati
317、on conferred during 2018 on former members of the Board of Directors who gave up their function during the year preceding the year under review or earlier.Similarly,there are no loans outstanding to former members of the Board of Directors.Compensation or loans to related parties of members of the B
318、oard of DirectorsIn 2018,no compensation was paid to related parties of members of the Board of Directors and there were no loans outstanding to related parties.38Compensation Report 2018Compensation Report 2018Executive BoardPrinciples of compensation for members of the Executive BoardGovernancePur
319、suant to art.21bis par.1 of Nestl s Articles of Association(*),the General Meeting shall approve annually the proposal of the Board of Directors in relation to the maximum aggregate amount of the compensation of the Executive Board for the following fi nancial year(*).In the event the General Meetin
320、g has not approved a proposal of the Board of Directors,the 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
321、 decision of the General Meeting and,to the extent known to the Board of Directors,the main reasons for the negative vote;and(iii)Nestl s compensation principles;andb)the Board of Directors submits the amount(s)so determined to approval by the same General Meeting,a subsequent Extraordinary General
322、Meeting or the next Annual General Meeting(art.21bis par.2 of the Articles of Association).If the maximum aggregate amount of compensation already approved by the General Meeting is not suffi cient to also cover compensation of one or more members who become members of or are being promoted within t
323、he Executive Board during a compensation period for which the General Meeting has already approved the compensation of the Executive Board,Nestl or companies controlled by it shall be authorized to pay such member(s)a supplementary amount during the compensation period(s)already approved.The total s
324、upplementary amount shall not exceed 40%of the aggregate amount of compensation of the Executive Board last approved by the General Meeting per compensation period(art.21ter of the Articles of Association).PrinciplesThe principles of compensation for members of the Executive Board are the following:
325、Pay for performanceThe Total Direct Compensation for the members of the Executive Board includes a fi xed portion(Annual Base Salary)and a variable portion(Short-Term Bonus and Long-Term Incentives).The fi xed compensation takes into account individual performance.Variable compensation is determined
326、 based on collective and individual performance.These are intended to ensure a major part of executive rewards are contingent on achieving demanding performance goals.Alignment with long-term company strategy and shareholder interestsCompensation for members of the Executive Board is aligned with co
327、mpany strategy and shareholders interests.The Short-Term Bonus payout is determined by the degree of achievement of a number of objectives aligned to annual business plans.Long-Term Incentives are provided in the form of share-based instruments,therefore ensuring alignment with shareholders interest
328、s.In 2018,the main Long-Term Incentive instrument was the Performance Share Unit Plan(PSUP).PSUs have a vesting period of three years,with a further holding period of two years for Executive Board members,leading to a total restriction period of fi ve years.Their alignment with shareholder interests
329、 is reinforced through pay-outs being tied to underlying Earnings per Share(EPS)growth,relative Total Shareholder Return(TSR)performance and Return on Invested Capital(ROIC).Coherence in remuneration plans and levels throughout the CompanyThe Company aims to align remuneration plans across the Group
330、 and to ensure that compensation rewards appropriately for the added responsibilities of positions held.This is refl ected in the relative remuneration levels of the Executive Board.(*)Nestl S.A.s Articles of Association can be found on page 51 and on Board of Directors may submit for approval by th
331、e General Meeting deviating or additional proposals relating to the same or different periods.39Compensation Report 2018Compensation Report 2018Compensation to be internationally competitive by using selected benchmarksThe compensation packages for the members of the Executive Board need to be compe
332、titive in a dynamic international environment.Nestl targets its overall remuneration policy to be between the median and the 75th percentile of the selected external benchmarks(please refer to page 43).Whenever appropriate,the benchmark values are adjusted for the size of Nestl.The market competitiv
333、eness of the Executive Board is therefore periodically assessed using the services of Willis Towers Watson,a reputed international human capital and benefi ts consultancy.The total compensation package consists of the following elements:1.Base SalaryThe Base Salary is the foundation of the total compensation.It refl ects the experience,expertise and sustained performance of the Executive Board mem