The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).
36. Transactions and relations with members of the Board of Directors and senior management
Key management compensation
Board of Directors
In 2015, sixteen non-executive members of the Board of Directors received a total remuneration of CHF 5.5 million (2014: CHF 3.7 million) in the form of cash of CHF 3.8 million (2014: CHF 2.3 million), post-employment benefits of CHF 0.1 million (2014: CHF 0.1 million), share-based payments of CHF 1.4 million (2014: CHF 1.0 million) and other compensation of CHF 0.2 million (2014: CHF 0.2 million).
The total annual compensation for the fourteen members of senior management (including CEO) amounted to CHF 35.0 million (2014: CHF 32.3 million). This amount comprises of base salary and variable cash compensation of CHF 24.7 million (2014: CHF 19.6 million), share-based compensations of CHF 4.0 million (2014: CHF 5.0 million), employer contributions to pension plans of CHF 5.6 million (2014: CHF 7.2 million) and “Others” compensation of CHF 0.7 million (2014: CHF 0.5 million). The base salary and the variable cash compensation are disclosed, including foreign withholding tax. Further included in the contribution to pension plans are the employer’s contributions to social security (AHV/IV).
Compensation for former members of governing bodies
In the year under review, compensation in the amount of CHF 0.2 million (2014: CHF 3.5 million) was paid to six (2014: six) former members of senior management.
As at December 31, 2015 and December 31, 2014, there were no loans outstanding to members of the Board of Directors and members of senior management.
As part of the employee share purchase plan, LafargeHolcim manages employees’ shares. It sells and purchases LafargeHolcim Ltd shares to and from employees and on the open market. In 2015, the company did not purchase any LafargeHolcim Ltd share from members of senior management (2014: CHF 0.1 million).
As a result of the merger, LafargeHolcim has identified the following transactions with other parties or companies related to the Group:
Lafarge S.A. has received indemnifications guarantees from (in relation to an acquisition in 2008) and entered into a cooperation agreement with Orascom Construction Industries S.A.E (OCI). Mr Nassef Sawiris is Chief Executive Officer and Director of Orascom Construction Industries N.V., parent company of OCI, former director of Lafarge S.A. and current director of LafargeHolcim and Mr Jérôme Guiraud is a member of audit committee of OCI and a Director of Lafarge S.A. The cooperation agreement dated December 9, 2007 aims to allow OCI to participate in tenders in respect of the construction of new plants in countries where OCI has the capability to meet certain of LafargeHolcim’s construction needs.
At this stage, the construction agreements entered into with the OCI Group are considered to be at arm’s length business transactions, intervening within the framework of consortia, OCI being one of the members. There is no conflict of interest between Mr Nassef Sawiris and LafargeHolcim on this subject. Under these agreements, the outstanding balances with the OCI Group are not significant as at December 31, 2015.
No compensation was paid or loans granted to parties closely related to members of the governing bodies.