Corporate governance
Page contents
1. Group structure and shareholders
2. Capital structure
3. Board of Directors
4. Executive Board
5. Compensations, shareholdings and loans
6. Shareholders' participation rights
7. Changes of control and defence measures
8. Auditors
9. Information policy
4. Executive Board
Status as at 31 December 2003
4.1 Members of the Executive Board
John R. Coomber
Chief Executive, Officer, Member of the Executive Board Committee
Mr Coomber, a British citizen born in 1949, graduated in theoretical mechanics from Nottingham University in 1970.
Mr Coomber started his career with the Phoenix Insurance Company. He joined Swiss Re in 1973. Having qualified as an actuary in 1974, he first specialised in the company's life reinsurance. He was Swiss Re (UK)'s appointed actuary from 1983 to 1990. In 1987 he assumed responsibility for the life division, and, in 1993, was made head of the company's UK operations. Mr Coomber was appointed Member of the Executive Board in April 1995, responsible for the Group's Life & Health Division. In June 2000, he became a member of the Executive Board Committee. In November 2002, the Board of Directors appointed him CEO with effect from 1 January 2003. He also serves as a member of the Supervisory Board of Euler Hermes.
Jacques Aigrain
Head of the Financial Services Busines Group, Member of the Executive Board Committee
Mr Aigrain, a Swiss and French citizen born in 1954, received a PhD in economics in 1981 from the Sorbonne, in France, after studying law at the Sorbonne and economics at Paris-Dauphine University.
Mr Aigrain joined Swiss Re in June 2001 to assume his current position. Previously, Mr Aigrain worked for JP Morgan in various positions and locations, predominantly in investment banking, capital markets, and mergers and acquisitions. Immediately prior to joining Swiss Re, he was a managing director and a member of JP Morgan's investment banking management committee, where he was co-head of client coverage, responsible for the financial institutions and classical economy sectors.
Martin Albers
Head of the Risk Solutions business sector in the Financial Services Business Group
Mr Albers, a Swiss citizen born in 1960, graduated from the Swiss Federal Institute of Technology (ETH) in Zurich in 1985 with a master's degree in engineering, and in 1991 earned an MBA from the JL Kellogg Graduate School of Management at Northwestern University, Chicago.
Mr Albers joined Swiss Re as head of Product Controlling in 1994, after having worked for over three years with Boston Consulting Group. In 1996 he became head of property and casualty business in Canada and, in 1999, in the UK. Mr Albers was appointed to the Executive Board in January 2002. He assumed his current position in June 2002.
Walter Anderau
Head of the Communications & Human Resources Division
Mr Anderau, a Swiss citizen born in 1946, received a degree in history from the University of Zurich in 1972 after studies both in Zurich and Paris.
Mr Anderau joined Swiss Re in 1998 as head of Group Human Resources. Prior to that, he worked for ten years at Kraft Jacobs Suchard, where he was chairman of the board of Swiss operations, director on the company's European board and, as vice president of corporate affairs, member of Kraft's executive board (Europe). From 1985 to 1988, Mr Anderau headed Switzerland's "700th anniversary celebration" (CH 91). He was appointed to the Executive Board in July 1999 to take on his present position.
Andreas Beerli
Head of the Americas Division within the Property & Casualty Business Group
Mr Beerli, a Swiss citizen born in 1951, graduated in law in 1976 and received a doctorate in law from the University of Basle in 1983.
Mr Beerli joined Swiss Re in 1979, serving in various marketing functions until 1984. He then worked for Credit Suisse in private banking and the Baloise Insurance Group, where he served in the company's foreign operations. He rejoined Swiss Re in 1993. In 1997, he restructured and integrated the newly acquired Italian reinsurance company Uniorias. In 1998, he assumed an additional position as Head of the Global Clients unit. He was appointed to his current position in January 2000.
Mr Beerli is a member of the board of the Reinsurance Association of America.
Philip Colebatch
Head of the Capital Management and Advisory business sector within the Financial Services Business Group
Mr Colebatch, an Australian citizen born in 1944, received a master of science degree from the Massachusetts Institute of Technology in 1969 and a doctorate in business administration from Harvard Business School in 1973.
Mr Colebatch joined Swiss Re in September 2002 to assume his current position, which includes responsibility for Fox-Pitt, Kelton (FPK) and Swiss Re Financial Products. Before joining, Mr Colebatch was with Credit Suisse Group, where he most recently served as a member of the group executive board and CEO of Credit Suisse Asset Management. Mr Colebatch began his career with Citicorp in New York and held a number of senior investment banking positions in Hong Kong and London.
Jacques E. Dubois
Deputy Head of the Life & Health Business Group, Chairman & CEO of Swiss Re America Holding Corporation
Mr Dubois, a US citizen born in 1949, graduated from the College of the Holy Cross in Worcester, Massachusetts in 1970 with a degree in mathematics. He also received a master's degree in business administration in 1972 from the Amos Tuck School at Dartmouth College, Hanover, New Hampshire.
Mr Dubois joined Swiss Re in conjunction with the company's acquisition of Life Re in 1999. In June 2000, he was appointed a member of the Executive Board and Deputy Head of the Life & Health Business Group.
Mr Dubois began his business career at Philo Smith & Co., a securities firm specialising in insurance stock research and the merger and acquisition of insurance companies. In 1979, he joined Insurance Investment Associates, an investment banking partnership focused exclusively on mergers and acquisitions of life insurance companies. In 1988, Jacques Dubois co-founded Life Re Corporation, which was established to purchase the General Reassurance Company from General Reinsurance Corporation in a leveraged buy-out. He served as president and chief operating officer of Life Re Corporation from 1988 to 1998. He continued as a partner of Insurance Investment Associates until December 1998, when he resigned upon the acquisition of Life Re Corporation by Swiss Re.
John H. Fitzpatrick
Head of the Life & Health Business Group, Member of the Executive Board Committee
Mr Fitzpatrick, a US citizen born in 1956, graduated from the Loyola University of Chicago with a Bachelor of Business Administration in 1979. He is a Chartered Financial Analyst (CFA) (1987) and a Certified Public Accountant (CPA) (1979).
Mr Fitzpatrick joined Swiss Re in July 1998 as Chief Financial Officer and was appointed to his current position in April 2003. Before joining, he was senior managing director and co-head of Securitas Capital, a private equity firm focused on the insurance industry. From 1996 to 1998 he was a senior managing director at Zurich Centre Resources Ltd., where he focused on startups of new insurance companies. From 1990 to 1996 he was CFO and a member of the board of directors of Kemper Corporation. He started with Kemper as a financial analyst in 1978, holding several positions in corporate finance until 1990.
Ann F. Godbehere
Chief Financial Officer, Head of the Finance Division, Member of the Executive Board Committee
Ms Godbehere, a Canadian and British citizen born in 1955, qualified as a Certified General Accountant (CGA) in Canada in 1984 and became a fellow of the Certified General Accountants' Association (FCGA) in 2003.
Ms Godbehere was appointed Group CFO with effect from 1 April 2003. Previously, she held the position of Chief Financial Officer of the Property & Casualty Business Group and, prior to this, from 1998-2001, she served as the Chief Financial Officer of the Life & Health Business Group, based in London. Ann Godbehere joined Swiss Re in 1996, following the acquisition of the Mercantile & General Reinsurance Group. Until 1998, she held a number of senior positions in Swiss Re Life & Health North America, most recently the position of Chief Executive Officer of Swiss Re Life & Health Canada. Ms Godbehere started her career with Sun Life of Canada in 1976 in Montreal, Canada. She joined the M&G Group in 1981, where she held several management roles, including senior vice president and controller for both life and health and property and casualty businesses throughout North America.
Rudolf Kellenberger
Deputy Chief Executive Officer, Member of the Executive Board Committee
Mr Kellenberger, a Swiss citizen born in 1945, studied civil engineering at the Swiss Federal Institute of Technology (ETH) in Zurich, graduating in 1970.
Mr Kellenberger joined Swiss Re in 1978, holding various assignments in facultative and treaty business within the engineering department. In the early 1980s, he was responsible for Southeast Asia, operating from Hong Kong. In 1990 he was appointed head of the engineering department. In 1993 he was appointed to the Executive Board, responsible for the Northern Europe reinsurance sector and special lines. In 1998 he was appointed Head of Europe Division. On 1 April 2000, he became Deputy Chief Executive Officer. Mr Kellenberger started his career as a project engineer in bridge construction before moving to England, where he worked for a major Swiss construction company.
Mr Kellenberger is a member of the board of the Swiss Insurance Association and of the supervisory board of Wüstenrot & Württembergische AG, Stuttgart, as well as chairman of the supervisory board of Atradius, Amsterdam (formerly Gerling NCM Credit and Finance AG, Cologne). In addition, he is a member of the board of directors of Swiss Life Group and a member of the international advisory council of FORTIS, Brussels.
Michel M. Liès
Head of the Europe Division within the Property & Casualty Business Group
Mr Liès, a citizen of Luxembourg born in 1954, received a degree in mathematics from the Swiss Federal Institute of Technology (ETH) in Zurich in 1974.
Mr Liès joined Swiss Re's life department in 1978. Based in Zurich, he first covered the Latin American market. From 1983 to 1993, he was responsible for France and the countries of the Iberian Peninsula. In 1994 he moved to the property & casualty department in charge of Southern Europe and Latin America, which he headed from 1997. Mr Liès became a member of the Executive Board and Head of the Latin America Division in 1998. On 1 April 2000, he assumed his current function as Head of Europe Division. He is also CEO of Swiss Re Germany, a Group company which was integrated in Europe Division in 2001.
Mr Liès is also a non-executive director of CNP Assurances, Paris, and Special Risk Insurance and Reinsurance Luxembourg S.A.
Stefan Lippe
Head of the Property & Casualty Business Group, Member of the Executive Board Committee
Mr Lippe, a German citizen born in 1955, graduated in mathematics and received a doctorate in business administration from the University of Mannheim in 1982.
Mr Lippe joined Bavarian Re in 1983. In 1986 he became head of the non-proportional underwriting department. He was appointed deputy member of the board of management in 1988 and a full member in 1991, when he assumed general responsibility for the company's operations in the German-speaking area. In 1993 he became chairman of the board of management of Bavarian Re. In 1995 he was appointed a Member of Swiss Re's Executive Board, responsible for the Bavarian Re Group. He was appointed to his current position in April 2001.
Pierre L. Ozendo
Head of the Asia Division within the Property & Casualty Business Group
Mr Ozendo, a US and French citizen born in 1950, attended the University of San Francisco from 1968 to 1971, studied political science and earned a bachelor of arts degree.
Mr Ozendo joined the Swiss Re Group in 1995, taking on an assignment as chief executive officer of the subsidiary Union Re, with effect from 1 January 1996. Mr Ozendo was appointed to Swiss Re's Executive Board on 1 July 1996. He was named Head of the Group's Asia Division in 1998 following Union Re's integration into Swiss Re. Before joining Swiss Re, Mr Ozendo worked for General Reinsurance Corporation from 1975 to 1995. In 1986 he moved to Switzerland as general manager of General Reinsurance Corporation (Europe) in Zurich. He was appointed president and managing director of General Re Europe Limited in 1994. Mr Ozendo was previously employed as an underwriter by the New York Life Insurance Company in San Francisco.
Mr Ozendo serves as a vice chairman of the Evian Group.
Bruno Porro
Chief Risk Officer, Head of the Risk & Knowledge Division, Member of the Executive Board Committee
Mr Porro, a Swiss citizen born in 1945, graduated from the Swiss Federal Institute of Technology (ETH) in Zurich in 1969 as a civil engineer. While in employment, he obtained a doctorate in economics in 1978.
Mr Porro joined Swiss Re in 1978, where he established a group involved with the assessment of natural hazards. In 1987 he became head of the development and capacity utilisation section and assumed responsibility for the Group's catastrophe fund covers. From 1989 he had marketing responsibilities in the Latin American and Iberian areas. He was appointed to the Executive Board in 1995. In 1998, he was named Chief Risk Officer and became a member of the Executive Board Committee. Prior to joining Swiss Re, Mr Porro had various assignments at the Swiss Federal Institute of Technology (ETH).
W. Weldon Wilson
Head of Swiss Re's North American life & health operations
Mr Wilson, a US citizen born in 1961, graduated from the Vanderbilt University School of Law in Nashville, Tennessee in 1986. He also holds a BA in political science from the University of Alabama in Huntsville, Alabama.
Mr Wilson has been associated with Swiss Re, and previously Life Re, since 1991, as general counsel, secretary, and director of Swiss Re Life & Health America Inc. and its subsidiaries. Before his appointment in 2003 to the Executive Board, he held the position of executive vice president and head of the business engineering services unit, where he was responsible for overseeing the firm's Admin ReSM programme as well as other non-traditional reinsurance solutions for life and health clients in North America. Mr Wilson formerly served as general counsel for the Life & Health Business Group. Before joining Life Re, Mr Wilson worked for two Texan law firms as an associate attorney.
Yuri Zaytsev
Group Information Officer, Head of the Information, Processes & Technology Division
Mr Zaytsev, a US citizen born in 1949, studied engineering and computer technology at the Technical University of Lvov, Ukraine, graduating in 1971 with a master's degree in mechanical engineering.
Mr Zaytsev joined Swiss Re in 1992 as head of corporate information resources for US subsidiaries, based in New York. In 1995 he was seconded to head office in Zurich, where he was put in charge of Group Information and Technology and the Group's Data Centre. Mr Zaytsev was appointed to the Executive Board in 1999 as Group Information Officer. Prior to joining Swiss Re, Mr Zaytsev developed the IT systems for the 1980 Olympic Games in Moscow. He then emigrated to the US, where he first worked as an IT project manager for the retail group K-Mart in New Jersey. He then spent seven years working for the American International Group, New York, where he handled the firm's domestic and international IT applications.
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4.2.1 Changes in the course of the business year 2003 (in chronological order)
John J. Hendrickson stepped down from the Executive Board on 31 March 2003, following a reorganisation of the company's Asset Management operations. He became a Senior Advisor in the Capital Management and Advisory business sector.
John H. Fitzpatrick, the former Chief Financial Officer, became Head of the Life & Health Business Group with effect from 1 April 2003. He was succeeded as CFO by Ann F. Godbehere.
Ann F. Godbehere took over as Chief Financial Officer on 1 April 2003. At the same time she joined the Executive Board and became a member of the Executive Board Committee.
Giuseppe Benelli, who was Chief Investment Officer until 30 April 2003, decided to pursue a professional opportunity outside the Group. Jacques Aigrain, Head of the Financial Services Business Group, assumed his responsibilities.
Chris C. Stroup, who was in charge of Swiss Re's North American life and health operations until 31 August 2003, decided to adjust his work/life balance and to devote more time to his family. He has remained with the company in a part-time position, focusing on strategic initiatives in Swiss Re's Life & Health Business Group. Mr Stroup was succeeded by W. Weldon Wilson.
W. Weldon Wilson was appointed a member of the Executive Board with responsibility for Swiss Re's North American life and health operations from 1 September 2003.
4.2.2 Changes since 31 December 2003
Benjamin Meuli was appointed Chief Investment Officer and Member of the Executive Board on 19 February 2004 with effect from 19 April 2004.
Mr Meuli, a British citizen born in 1956, was educated at Oxford University where he graduated with an MSc in Economics in 1978. He then embarked on a 20-year career with JP Morgan, where he became a managing director, in charge of the European Debt Capital Markets and the European Financial Institutions Group. He also held the positions of chief executive of JP Morgan Life Assurance Ltd. and chief operating officer of the global fixed income division. In 1998 he joined Morgan Stanley as managing director with primary responsibility for investment banking, fixed income, equities, real estate, and associated asset and liability management issues linked to large multinational insurance groups.
4.3 Management contracts
Swiss Re Life & Health America Inc. and certain of its life insurance affiliates, each of which is a United States life insurance subsidiary of Swiss Reinsurance Company (such US insurance subsidiaries are together referred to as "Swiss Re Life"), are parties to a third party administration contract (the "TPA Agreement") with affiliates of Computer Sciences Corporation, a Nevada corporation (together "CSC"). The TPA Agreement provides for CSC to carry out most of the policyholder administration services, including customer service, claims processing, and audit and regulatory compliance support, at mutually agreed and measured service levels for over two million direct life insurance policies and annuities of Swiss Re Life and its clients. Under the TPA Agreement, CSC provides these policyholder administration services at a number of operational sites throughout the United States. Swiss Re Life & Health UK has engaged CSC's UK affiliate to provide administration services for an additional approximately 220 000 direct life policies. Subject to certain early termination provisions, the TPA Agreement has a ten year term ending in 2013. For competitive reasons, Swiss Re is contractually obliged to keep certain material commercial terms of the TPA Agreement confidential. Pricing terms, including form and extent of compensation, and termination provisions under the existing TPA Agreement, have thus not been disclosed here.
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5. Compensations, shareholdings and loans
5.1 Content and method of determining the compensation and shareholding programmes
Compensation of the Chairman of the Board of Directors, the Executive Vice Chairman, the CEO and other members of the Executive Board is set by the Board of Directors' Compensation and Appointments Committee. The Committee convenes three to four times a year and presents its proposals to the full Board for approval. The Committee's remit also includes responsibility for the compensation philosophy and approving compensation plans.
Swiss Re has a "pay for performance" philosophy. The Executive Board is paid a base salary and variable bonus. The fixed salary consists of a cash payment, while the bonus can be either in cash or shares that are deferred for four years. Furthermore, all Executive Board members are obliged to own a multiple of their base salary in shares.
Swiss Re also grants its top management options as a long-term performance incentive. The size of the option grant depends on the labour market, the degree of influence on the Group result, and the potential and acceptability of the resulting dilution. Swiss Re options have a total duration of 10 years with a four year vesting period. Entitlement to the options is forfeited in the event of resignation during this period.
The Executive Board's performance assessment is based on annual objectives involving financial and qualitative elements. The bonuses distributed for a year's service are paid in April of the following year. All amounts disclosed relate to the performance year 2003 with some elements to be credited in April 2004.
5.2 Compensation for acting members of governing bodies
The disclosure follows the SWX directive, which requires differentiation between the executive members of the Board of Directors and the management board in toto and the non-executive members of the Board of Directors in toto. This applies to the tables shown in sections 5.2 - 5.6.
|
CHF millions
|
|
|
|
|
| Executive members (20) |
36.5
|
| Non-executive members (9) |
1.2
|
|
|
|
| Total |
37.7
|
|
|
|
The total shown includes all the remuneration components except for shares and options, which are shown separately. Cash payments, allowances, value of preferential rates on loans, other financial benefits, as well as the amount of actuarial funding needed for pensions, are included in this figure. Swiss Re does not have a separate pension plan for members of the governing bodies.
5.3 Compensation for former members of governing bodies
|
CHF millions
|
|
|
|
|
| Executive members (3) |
0.4
|
| Non-executive members (0) |
none
|
|
|
|
| Total |
0.4
|
|
|
|
Three former members of the Executive Board perform periodic services on behalf of the firm.
5.4 Share allocation
|
Share allocation (deferred) |
Share allocation
(unre- stricted) |
|
|
|
||
| Executive members (17) |
231682
|
none
|
| Non-executive members (9) |
20069
|
21505
|
|
|
||
| Total |
251751
|
21505
|
|
|
||
Executive Board members must receive between 25% and 100% of their performance related pay in shares. All shares awarded to the Executive Board are subject to a four year deferral period. The bonus plan stipulates that Executive Board members must decide on the final split between cash and shares by April. For the purpose of this disclosure, we have assumed a take-up rate of 70% which is in line with experience from previous years. Such shares have a discounted taxable value of CHF 73.65.
Members of the Board of Directors receive an honorarium, 25% of which is in the form of shares; the remainder may be taken either in the form of cash or shares. Shares have a taxable value of CHF 73.65 if subject to a four year deferral period, and CHF 93, respectively, if not restricted.
5.5 Share ownership
|
Number of shares held on 31 December 2003
|
|
|
|
|
| Executive members (17) |
1165265
|
| Non-executive members (9) |
205777
|
|
|
|
| Total |
1371042
|
|
|
|
In addition to those shares held by the person in question on the reporting date, shareholdings consist of any shares held by his/her spouse, minors, and of directly controlled companies.
5.6 Allocated number of options
a. Executive members
|
Average exercise price (CHF)
|
|||||||||
| Grant year |
60
|
68
|
74
|
93
|
128
|
144
|
152
|
163
|
183.3
|
|
|
|||||||||
| 1996 (2) |
18000
|
||||||||
| 1997 (3) |
22000
|
||||||||
| 1998 (12) |
86400
|
||||||||
| 1999 (15) |
145200
|
||||||||
| 2000 (15) |
241000
|
||||||||
| 2001 (16) |
504000
|
||||||||
| 2002 (16) |
404500
|
||||||||
| 2003 (17) | 551000 | ||||||||
| 2004 (17) |
500000
|
||||||||
|
|
|||||||||
| in (brackets) number of participating members | |||||||||
b. Non-executive members
|
Average exercise price (CHF)
|
|||||
| Grant year |
68
|
93
|
128
|
144
|
186
|
|
|
|||||
| 2000 (1) |
20000
|
||||
| 2001 (1) |
10000
|
||||
| 2002 (1) |
40000
|
||||
| 2003 (1) |
40000
|
||||
| 2004 (1) |
40000
|
||||
|
|
|||||
in (brackets) number of participating members
All options have a four year vesting period, during which there is a risk of forfeiture, and an exercise period of six years. Each option entitles the beneficiary to purchase one share at an unadjustable strike price.
At grant, option recipients can elect to take the options granted in the form of restricted shares, exchanging four options for one restricted share. The value of the restricted share vesting after four years is CHF 93. The election period runs until April 2004.
Based on the value of the restricted shares, the option has a value of CHF 23.25 at grant date.
5.7 Additional honorariums and remuneration
Under the SWX directive, Swiss Re is required to disclose the sum of the honorariums (eg consultancy fees) and other remunerations billed to Swiss Re or any of its Group companies by a member of a governing body or parties closely linked to such persons for additional services performed during the year under review in the case of sums exceeding half of the ordinary remuneration of the member in question. No such additional payments were made.
5.8 Loans granted to members of governing bodies
|
CHF millions
|
|
|
|
|
| Mortgages and loans to executive members (10) |
35
|
| Mortgages and loans to non-executive members (0) |
none
|
|
|
|
All credit is secured against real estate or pledged shares. The terms and conditions of loans and mortgages are the same as those available to all Swiss Re employees in the respective locations. The interest rates are either variable or correspond to the five year Swiss franc swap rate plus a margin of 10 basis points and, to the extent that they are preferential, have been factored into the compensation sums given to the governing body members under "Compensation for acting members of governing bodies".
5.9 Highest total compensation
The compensation of the highest paid member of the Board of Directors (Peter Forstmoser) during the reporting year can be broken down as follows:
|
Number of shares/
options |
CHF millions |
|
|
|
||
|
Compensation (as defined in "Compensation for acting members", section 5.2) |
0.7
|
|
|
Number of shares (as defined in "Share allocation", section 5.4) |
21505
|
|
|
Number of options (as defined in "Allocated number of options", section 5.6) |
40000
|
|
|
|
||
The options run for ten years and have a four year restriction period during which there is a forfeiture risk. The value of one share is CHF 93. Based on the value of the restricted shares, the option has a value of CHF 23.25 at grant date.
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6. Shareholders' participation rights
6.1 Voting right restrictions and representation
a. Voting right restrictions, statutory group clauses, exception rules
There are no voting right restrictions, no statutory group clauses and hence no rules on making exceptions.
b. Reasons for making exceptions in the year under review
No exceptions were made.
c. Procedure and conditions for cancelling statutory voting right restrictions
As there are no voting right restrictions, there is neither a procedure nor a condition for their cancellation.
d. Statutory rules on participating in the General Meeting of shareholders if differing from legal provisions
At the Annual General Meeting of 12 May 2003, the statutory rules were aligned with the legal provisions. Accordingly, any shareholder with a voting right may have his/her shares represented at any General Meeting by another person authorised in writing or by corporate bodies, independent proxies or proxies for deposited shares. Such representatives need not be shareholders.
6.2 Statutory quorums
The Articles of Association do not provide for any statutory quorums. Any General Meeting of shareholders passes resolutions by an absolute majority of the votes validly cast, subject to the compulsory exceptions provided by law.
6.3 Convocation of the General Meeting of shareholders
The statutory rules on the convocation of the General Meeting of shareholders correspond with the legal provisions. Accordingly, the General Meeting of shareholders is summoned at least 20 days before the date of the meeting by notice published in the "Schweizerisches Handelsamtsblatt".
6.4 Agenda
The Board of Directors announces the agenda. Shareholders with voting powers whose combined holdings represent shares with a nominal value of at least CHF 100 000 may, up to 45 days before the date of the meeting, demand that matters be included in the agenda. Such demands must be in writing and must specify the items and the proposals to be submitted.
6.5 Registrations in the share register
There is no statutory rule on the deadline for registering shareholders in connection with the attendance of the General Meeting. In recent years, Swiss Re has acknowledged voting rights of shares which were registered at least two working days before the General Meeting. In 2003, the qualifying date was Thursday, 8 May, while the Annual General Meeting was held on Monday, 12 May.
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7. Changes of control and defence measures
7.1 Duty to make an offer
Swiss Re has not taken any defence measures against take-over attempts. The governing bodies believe that the best protection is a fair valuation of the shares. They believe in the efficiency of a free market rather than relying on defence measures that normally have a long-term negative effect on the share price development. Therefore, there are no statutory rules on "opting up" or "opting out". Should a shareholder reach the threshold of 33 1/3% of all voting rights, then, pursuant to the Stock Exchange Act, he/she would be required to submit a general take-over offer. ("Opting up" is a statutory rule based on which the triggering threshold would be lifted to a higher percentage, while "opting out" is a statutory rule waiving the legal duty to submit an offer.)
7.2 Clauses on change of control
Unvested bonus shares, share options, and certain other employee benefit programmes would vest upon a change of control. Rights of members of the governing bodies are identical to those of employees generally.
8. Auditors
8.1 Duration of the mandate and term of office of the head auditors
PricewaterhouseCoopers Ltd, then known as Revisuisse Price Waterhouse AG, were elected as Swiss Re's auditors at the Annual General Meeting of 25 November 1991 and, since then, have been re-elected annually.
Mr Michael P. Nelligan and Mr Ray J. Kunz took up office as head auditors responsible for the existing auditing mandate as of 1 January 1997 and 1 July 2001, respectively. As of 1 January 2004, Mr David Law took over the position of Swiss Re's lead audit partner from Mr Nelligan. However, Mr Nelligan has retained his responsibility for the audit of the 2003 financial statements and, in order to ensure a smooth transition, his involvement will extend until approximately June 2004.
8.2 Auditing honorarium
The following summarises fees for professional services for the year ended 31 December 2003.
Audit fees
PricewaterhouseCoopers |
CHF 18.0 million |
Audit related feesPricewaterhouseCoopers |
CHF 5.1 million |
Audit related fees comprise, among other things, amounts for due diligences, comfort letters, accounting advice, information systems reviews and reviews on internal controls.
8.3 Additional honorarium
In addition to the fees described above, aggregate fees of CHF 2.4 million were billed by PricewaterhouseCoopers during the year ended 31 December 2003, primarily for the following:
| Income tax compliance and related tax services | CHF 1.3 million |
| Other fees | CHF 1.1 million |
Other fees comprise, among other things, amounts for accounting, actuarial and legal advisory, benchmarking studies and treasury advisory services.
8.4 Supervisory and control instruments vis-à-vis the external auditor
The Board of Directors has established the Audit Committee, which holds four meetings a year and to which the two head auditors are regularly invited as advisory guests. The Audit Committee evaluates external auditors annually and recommends one firm to the Board for election at the Annual General Meeting of shareholders. The Audit Committee cooperates closely with the elected external auditors. In particular, it consults them in respect of significant risks, contingencies or other obligations of the company; it reviews and approves the planned audit services and discusses the audits with them; it approves in advance non-audit services expected to be provided by the external auditors and reviews and approves other non-audit services that have been pre-approved by the Chairman of the Audit Committee between Audit Committee meetings; it reviews major changes to the company's accounting principles and practice brought to its attention by the external auditors; together with the external auditors, it reviews the adequacy and efficacy of the financial reporting process, the system of internal controls and quality control procedures, as well as any other significant findings and recommendations; it discusses with them the results of the annual audit, and in particular their report on the financial statements, necessary changes in the audit plan, any serious difficulties or differences of opinion encountered with management during the audit, critical accounting policies and alternative accounting treatments that have been discussed with management. The Audit Committee's discussions include considering the possible consequences of using such alternatives and investigating the treatment preferred by the external auditors. It also discusses other material written communications with management, such as management letters or schedules of unadjusted differences; external auditors are requested, at least once a year, to supply a formal written statement delineating all relationships with the company that might affect auditor independence; it actively engages in a dialogue with the auditors in respect of any disclosed relationships or services that might impact their objectivity and independence, and recommends to the Board of Directors appropriate action in response to the aforementioned statement; it obtains from them and reviews, at least annually, a report describing the external auditors' own quality control procedures, and any material issues raised by the most recent internal reviews, or inquiries or investigations by governmental or professional authorities within the preceding five years, and any steps taken to deal with any such issues; and it reviews the audit fees and the fees paid to the external auditors in respect of non-audit services.
9. Information policy
One of the guiding principles in Swiss Re's Corporate Philosophy is "clear and open communication". As a result, the Group's information policy goes beyond legal requirements, aiming to meet best practice standards established by global industry peers.
Swiss Re maintains a close relationship with the financial community and the broader public by using all available communication channels. The company's website includes full details of its corporate disclosure. Swiss Re is strongly committed to treating all investors equally. Meetings dealing with important corporate information are held with institutional investors and analysts; they can also be followed by private shareholders via telephone conference or on the Internet.
Swiss Re prevents selective disclosure by observing ad-hoc publicity rules, and a policy of restrictions for the so-called "close period" during which the financial results are finalised. The close period commences on a given date preceding the official publication of the financial results and lasts until such publication has been made. No meetings are held with analysts or investors during this close period. In addition, members of the governing bodies, their secretariats and employees preparing or communicating material non-public financial information are subject to close period communication and trading prohibitions.
Swiss Re reports semi-annually on its financial performance and on an ad-hoc basis to announce important corporate news. Furthermore, Swiss Re organises events with investors and analysts where specific topics are discussed.
9.1 Communication of major corporate news in 2003
Please refer to the section "Key events" for details on major corporate news in 2003.
In addition to these events, Swiss Re holds frequent meetings with institutional investors and participates in investors' conferences organised by investment banks. Presentations which are used to present Swiss Re at such conferences are made available to the public on the company's website.
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