7.3 Share-based compensation
The members of the Board of Directors can choose whether to receive all or part of their remuneration in Rieter shares. In the context of their remuneration for 2024, four members of the Board of Directors received in total 5 868 shares on January 17, 2025. The cost of CHF 0.5 million was charged to the consolidated income statement 2024. On January 17, 2024, five members of the Board of Directors received in total 7 880 shares in connection with their remuneration for 2023. The market value of the shares granted was CHF 0.7 million and was charged to the consolidated income statement 2023. The shares are taken from treasury shares of Rieter Holding Ltd. and cannot be sold for three years.
In the context of the variable remuneration for 2024, the members of the Group Executive Committee will receive Rieter shares with a market value of CHF 1.3 million in April 2025. The respective cost of CHF 1.3 million was charged to the consolidated income statement 2024. In the context of the variable remuneration for 2023, the members of the Group Executive Committee received 5 707 shares with a market value of CHF 0.7 million on April 17, 2024. The respective cost of CHF 0.7 million was charged to the consolidated income statement 2023. These shares are taken from treasury shares of Rieter Holding Ltd. and cannot be sold for three years.
Rieter operates an incentive plan for the members of the senior management (excluding the members of the Group Executive Committee). In January 2024, it was decided that a defined percentage of the existing short-term incentive will be settled by transferring it to the new incentive plan. The participants will receive Rieter shares with a market value of CHF 2.1. million in April 2025. The respective cost of CHF 2.1 million was charged to the consolidated income statement 2024. The shares are taken from treasury shares of Rieter Holding Ltd. and cannot be sold for three years.
The previous long-term incentive plan, granting the participants rights to receive a certain number of Rieter shares free of charge or to receive cash compensation in the amount of the same number of shares at the market price after three years, expires on May 4, 2025. The exercise of the rights in three years is subject to an unterminated employment contract. If employment is terminated within three years, the rights expire. Exceptions can be granted by the Remuneration Committee. There are no further performance-related criteria.
The movement of the outstanding rights was as follows:
Number of rights | 2023 | 2024 |
|---|---|---|
Outstanding rights at January 1 | 12 033 | 5 172 |
Granted | – | – |
Exercised/paid-out | – 5 690 | – |
Expired | – 1 171 | – 915 |
Outstanding rights at December 31 (non-exercisable) | 5 172 | 4 257 |
The estimated fair value of the outstanding rights amounts to the market value of a Rieter share of CHF 84.90 at December 31, 2024. In 2024, the cost of the long-term incentive plan in the amount of CHF 0.1 million affected the income statement (2023: CHF 0.1 million). The liability recognized in the balance sheet at the end of the year was CHF 0.4 million (December 31, 2023: CHF 0.3 million).
Material accounting policies
Rieter uses share-based awards in the context of the compensation of the members of the Board of Directors, the Group Executive Committee, and senior management. There are equity-settled and cash-settled share-based awards.
Share-based payments are measured at fair value at the grant date and recognized in the consolidated income statement over the vesting period. For share-based payments that are settled with equity instruments, a corresponding increase in equity is recognized.