According to the Directive on Information Relating to Corporate Governance (the Directive), issuers must publish certain information relating to their corporate governance in their annual report. The Sanction Commission found that Sulzer Ltd (Sulzer) had breached the rules in its annual report for 2008 by omitting some of the required information.
The Directive demands among other things, that details be given of the content and method for determining the compensation paid to the members of the board of directors and executive board. These details must be provided in a form that is clear and comprehensible for market participants. The Sanction Commission decided that Sulzerâs description of its compensation systems for the board of directors and the executive board was too brief and that further statements needed to be added. In particular, Sulzer had used terms in connection with compensation that were not explained in further detail, and it also omitted certain information regarding the weighting of compensation components.
The Sanction Commission identified further minor breaches concerning the information on changes in capital during one of the previous three reporting years and the description of non-audit services.
As a secondary point in addition to the above breaches of the regulations regarding corporate governance, the Sanction Commission also criticized Sulzer for failing to meet a regular reporting obligation. Sulzer did not inform SIX Exchange Regulation correctly of a change in the chairman of its board of directors.
In considering the sanction, the Sanction Commission has taken into account the gravity of the breach, the degree of fault and the issuerâs sensitivity to a penalty.