Furthermore, at the time of the IPO in February 2015, the Group Management Board and selected Other Top Management members were given the opportunity to participate on a voluntary and one-time basis in the future business performance of Sunrise by purchasing so-called Investment Shares. This is in line with the Sunrise goal of fostering long-term commitment and promoting immediate share ownership through equity holdings since the IPO. IPO Management Long-Term Investment Program (MLTIPZero) Investment Shares were financed through the private investment of the participating employees either by using parts of the proceeds resulting from the partial unwind of a pre-IPO Management Equity Program (MEP) implemented by shareholders of Sunrise Communications AG in 2011 or by paying a cash amount into the program (in cases where the participant had not invested in the MEP).
The mechanics and terms and conditions of MLTIPZero are the same as those of the MLTIP described in Management Long-Term Investment Program, with the exception that the price used to determine the number of Investment Shares to be allocated was the IPO offer price.
As stated in this section, all variable compensation at Sunrise is performance-related. While the short-term incentive rewards past performance throughout the year, the Management Long-Term Investment Programs are designed to provide a prospective incentive (Performance Shares) which is closely tied to the future success of the company through its share price development (long-term value creation for Sunrise shareholders). Furthermore, as the Group Management Board and selected Other Top Management members are encouraged to invest part of their short-term incentive into shares (Investment Shares), the plan offers immediate ownership interest (“skin in the game”). This not only serves to strengthen the managers’ long-term commitment to Sunrise, it also promotes prudent risk management and reinforces their alignment with the shareholders.