2016 Bonus (Variable Incentive Compensation)

Dear FI seeker,

First of all, a HAPPY NEW YEAR to all of you!

Last Friday, I had my 2016 performance review with my boss, where we discussed, the objectives achieved or not, what I should develop in 2017, etc.

As usual, at the end of the discussion is the long awaiting performance rating. This rating will drive my Incentive Compensation (IC or Bonus) as well as the salary increase for 2017.

To remind you how the IC is it calculated: you take your “Annual Base Salary – ABS” X “Employee Performance Rating –  EPR” X “Company Performance Rating – CPR” = IC. The scale for the EPR and CPR varies from 0% to 150%.The IC is paid cash with the February salary.

In 2015, the CPR was 130% (spectacular year) and my EPR was 105%. This gave us 53’000 CHF gross bonus (2015 Bonus (Variable Incentive Compensation)).

Ok, let’s stop the suspense now as I am sure you are waiting like me to see how much, we will cash this year.

So my 2016 EPR was 110% and our board of directors have review the company performance vs. objectives and they decided to allocate a CPR rating of 110%.

Therefore, my gross bonus is 48’000 CHF!

YES, YES, YES, that’s an excellent news and I am very very happy! ok, it’s 5000 CHF lower than last year, but it’s no due to my own performance.

This cash will be invested in high dividend stocks, I am still looking at which company(ies) in which to invest, but I have my view on Roche (ROG.VX) again to increase our position. Roche is a Swiss Pharmaceutical company which has a very nice dividend payout ratio 3.58% in 2016, which is expected to be around 3.77% in 2017.

Will keep you posted when the purchase is done.

Cheers, RA50





Blogging or resting


Dear FI seeker,

You may wonder why, our blog remains empty for weeks? The main and only reason is that I am so exhausted after 11-12 hours of work + having 1h30 min of commuting every day that my brain just need some rest, a good dinner with my lovely wife, some reading and sleep, which unfortunately these days is not always coming quickly, therefore when the alarm clock ring at 5 AM, I am like a zombie. But I am lucky, a shower a coffee and then I am like new.

As you remember, I change work in October 2015 (Job, functional move and salary increase), with more responsibilities, a team, a good project on hand and salary + bonus increase.  But due to a strategic decision from our Senior Management Team taken 18 months ago and a massive project deadline for the end of this year, we are sinking in hours of works, to identify gaps, issues and trying to solve as soon as possible.

On top, one of the project manager that is working in the same team, had a burnout, guess what, we had to relocate our resources, to ensure that his work would be done.

So, after almost on year, minus 20 days, I am very often thinking if that move was the right one for me.

Ok now from the positive side, nothing special for our apartment, I received the offer from the electrician, which we already review during a meeting. Now waiting the revised offer, hoping that would the last one. So we should be close to 6500 CHF of added-value, but if you remember my negotiation with the Architect (Discount on our future apartment), where I have been able to negotiate 15’000 CHF of reduction, we are fine, even if I had the 6000 CHF of the bathroom added-value we have a total of around 125000 CHF. So the 2500 CHF will allow buying the washing machine quite easily.

Dear friend, I wish you an excellent weekend, hopefully for you has beautiful that in Switzerland.

Cheers, RA50

The first salary after my job move

Hi All,

Yesterday, the October pay check was quite impressive, as we received the first salary with the 4.3% increase (promotion), the relocation allowance and the 13th salary adjusted to 9 months (based on my previous salary). Next month, I will receive the remaining amount of the 13th salary based on my new salary.

First thing I did is to transfer money to our broker account, now we have a new cash position of 20K CHF, which next month will increase by around 4000 CHF, with the remaining of 13th salary.

I am happy to have this cash position, as the market as been so volatile recently that good opportunities exists to buy shares at discounted prices.

For example, Roche (ROG:VX) is very attractive and with the excellent 3rd quarter results, will prove once again a very good investment.

You may have seen that Credit Suisse (CSGN.VX) will increase their capitalization and I believe the investors should have preferential positions, let’s see. My only concern we are already over-weighted in financial companies with UBS.

LafargeHolcim is another company that I believe should be invested in, they are really discounted now, and the future is bright for the cement Giant.

What about you, any tips on what to buy?



Functional move – Positive financial impact

Dear all,

Now that I have started my new job (since 5 days), I will give you some financial details about that move.

Our company is using the Hay system to define the salary grade for each jobs, so with my promotion, I received one grade promotion, which means the following:

  • A salary increase of 4.3%
  • New incentive compensation (IC) rate from 13% to 18%, if I consider last year performance remaining the same, it will increase by +/- 8’500 CHF to a level of 25k-30k.

As I mentioned, in this post (Job, functional move and salary increase), my work location is now in another city of Switzerland away by 80 Km from home. When I signed my new contract, I had the surprise to receive a bonus 18’500 CHF for transportation expenses.

We will keep this bonus in our “car” saving account to be ready to buy a new car in a couple of years.

Now, we all these additional bonuses, I will need to figure out what will be the impact on our taxes, as all the above are subject to tax imposition. The tax reimbursement  from 2014, will not go for shares investment but probably to pay the additional 2015 taxes.

What about you, any new job, are you looking to change job?

Cheers, RA50

The Universal Revenue

Dear All,

IN the plane to Tanzania, I read an amazing article in “l’hebdo”, who is talking about the Universal Revenue or the Unconditional  Base Revenue (UBR), that the Swiss people could have to vote as a popular initiative if the number of signature needed is achieved.

The concept of the UBR is that each citizen will receive a fix revenue per month to cover their vital needs.

Very interesting proposal, that would challenge all actual principle that you need to work to receive money. 

If the initiative would go through, probably voted end 2016, which I believe will not, you will ask why, because we are simply not ready to accept it and will be extremely difficult to finance on top of it.

The calculated revenue estimated would be around 2500 CHF. I need to investigate more deeply to evaluate what it will cover, but basically the health insurance and let take our case it would cover as well our monthly grocery bill but I doubt it would cover much of the rent as it one of the important expense that Swiss people have.

So what is the concept behind the UBR, in our modern world and with the technological progress, we made, we are able to produce every day more with less human activity and therefore generate a lower income for families. 

The other reason is that the revenues don’t correspond anymore to the work value, especially in our increasing collaborative economy, therefore a lot jobs are not properly paid, e.g.: child carer!

Finally the a job remunated is not anymore an obligation but a choice.

What do you think about the UBR? 

Cheers, RA50

Job, functional move and salary increase

Dear all,

I am very happy to announce that I have been offered a new job and consequently getting a promotion!

This promotion will come with a salary and an annual bonus increases. I have not yet received all the details about the previous…  Will update you as soon as the contract arrives.

What I know is that I will work in another location which is around 80km away from home compared to the 7km actually; therefore we will have more spending on gas and the car will depreciate quicker due to the additional mileage per year. Hopefully the salary increase will compensate this additional cost.

But it is a great opportunity that I cannot pass over.