RBR Capital Advisors


EQS Group-News: RBR Capital Advisors / Key word(s): Miscellaneous

04.04.2016 / 17:31
The issuer is solely responsible for the content of this announcement.


April 4, 2016

Dear shareholders of gategroup,

In its latest press release gategroup continues to mislead investors with false
information. The calculations and assumptions in our letter to shareholders from
March 30 regarding the executive compensation of gategroup management are
correct. In particular, we reiterate that the calculation of CHF 7.5 million in
annualized compensation for the CEO for 2015 is a fair representation and stands
in stark contrast to the CHF 4.4 million reported by gategroup in its annual
report. We simply adjust for the fact that the company has used a much lower
share price than the market price at year-end and for the fact that the CEO only
worked for nine months. For further information regarding the compensation
excesses at gategroup please consult the letter to shareholders from March 30
which can be found onwww.savegategroup.com.

We are not surprised that gategroup continues to make false and misleading
statements under the leadership of Chairman Andreas Schmid and continues with
its calamitous record of poor corporate governance. This is just another piece
of an ever larger puzzle of damaging and selfserving behavior. We encourage you
to visit the websitewww.savegategroup.comand review the corporate governance
presentation from March 2016 which lists the most recent corporate governance

We are convinced that gategroup cannot progress under a leadership that lacks
ethical and moral standards and that the chairman should under no circumstance
continue to lead this company. It is essential that you, as shareholders,
properly assess all public information and cast an informed vote at the upcoming
AGM. A victory for good corporate governance for gategroup's shareholders will
set the precedent that public shareholders should not tolerate the kind of
shenanigans gategroup shareholders have endured over the last seven years.

Some might argue that it is acceptable for the chairman to stay on the company's
board for another year since he has announced he will step down next year. We
strongly oppose this view for two reasons:

First, re-electing the chairman for another year would indicate a sanctioning of
past mismanagement, which would have far-reaching consequences beyond the case
of gategroup. It signals that shareholders are passive and can easily be
appeased. It is time to change the company for the better to prevent the further
destruction of value for shareholders.

Second, as long as the current chairman is in office he will be able to exert
influence on who his successor will be. Given his track record, we believe that
is a very dangerous proposition. We have spoken to potential candidates, all of
whom have an excellent track record as CEOs and chairmen of listed Swiss
companies. They all represent the best in great operational performance and good
corporate governance. We cannot miss the opportunity to instigate change for the
better. By re-electing the current chairman, you risk that a successor of the
same breed will be chosen.

To show how gategroup compares with best-in-class Swiss companies regarding
compensation we have put togetherFigure 1, which you can find in the appendix.
All these companies have a strong track record for long-term value creation and
reward their management teams accordingly. It is false to claim that the
compensation of top management at gategroup is market based or performance
oriented. As a matter of fact, gategroup's operating performance significantly
deteriorated in 2015. Sales increased 3.3% in local currency while the number of
employees increased by 4%. Other operating expenses, excluding restructuring
charges, increased by 7% in Swiss francs and significantly more in local
currency. Consulting and legal fees increased by a shocking 35% in Swiss francs.
To claim, as the company does, that the operating performance is improving is
simply wrong. Furthermore, compensation for gategroup management was
significantly lower in 2010, a year when profits for shareholders were
significantly higher than in 2015 (even adjusted for all exceptional items). We
fail to understand the logic behind this.

The culmination of disinformation in the latest press release from gategroup was
reached when the company claimed that there is no connection between EBITDA and
EPS. For the benefit of all shareholders, we have addedFigures 2aand2bwhich show
how EPS targets translate into EBITDA margins. Our earlier statement that the
shares from the ELTIP 2015 program will vest even if the margin falls below the
guided target range remains unchanged.

In summary, it is not enough to vote'No'on the 2015 compensation report and
maximum executive management compensation for 2017. The chairman should bear the
consequences for the disastrous past eight years and this entirely inappropriate
compensation proposal. Re-electing him would sanction his damaging behavior. The
time has come to install best-in-class corporate governance and a focus on great
operational performance.


RBR Capital Advisors AG Cologny Advisors LLP

Rudolf Bohli Jonathan Herbert

Additional features:


04.04.2016  This Corporate News was distributed by EQS Schweiz AG. www.eqs.com -
news archive: http://switzerland.eqs.com/de/News

The issuer is responsible for the contents of the release.

450939  04.04.2016 

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