Finance and governance
As a global organization, the AO Foundation was impacted in a profound manner by the COVID-19 pandemic. Due to travel restrictions, many face-to-face events were cancelled and whenever practicable were replaced with online events, which accelerated the adoption of an online format. Despite a very challenging year, the net result reached record levels boosted by the financial performance of our portfolio thanks to the market recovery in the second half of 2020.
The Asset Management Result in the current year was CHF 74.6 million.
Compared to the previous year, third party income declined by 64 percent due to the COVID-19 pandemic and the related shift to online events. Compared to the budget, third party income was down by 67 percent. Total operating expenses declined by 30 percent in the current year with the biggest driver, educational expenses, which declined by 50 percent compared to the prior year. The net operating result for the year was -26.7 million.
Operating income
68 million
CHF
Financial result
73 million
CHF
Foundation equity
1,466 million
CHF
Income statement
The 2020 income statement is as follows in comparison to the previous year and budget:
| Income Statement Consolidated | 2019 Actual | 2020 Actual | 2020 Budget | Variance A20/B20 | Variance A20/A19 | |||||
| in million CHF | abs | % | abs | % | abs | % | abs | % | abs | % |
| Cooperation Agreements | 62.9 | 65% | 56.2 | 82% | 62.5 | 63% | -6.3 | -10% | -6.7 | -11% |
| 3rd Party Income | 33.6 | 35% | 12.1 | 18% | 36.9 | 37% | -24.8 | -67% | -21.5 | -64% |
| Total Operating Income | 96.5 | 100% | 68.3 | 100% | 99.4 | 100% | -31.1 | -31% | -28.2 | -29% |
| R&D | 28.2 | 21% | 24.2 | 26% | 29.3 | 21% | -5.1 | -17% | -4.0 | -14% |
| AO Technical Commission | 4.6 | 3% | 2.2 | 2% | 4.3 | 3% | -2.0 | -47% | -2.4 | -51% |
| Community Development | 7.1 | 5% | 5.4 | 6% | 6.9 | 5% | -1.5 | -22% | -1.7 | -24% |
| Education | 59.2 | 44% | 29.4 | 31% | 64.3 | 45% | -34.8 | -54% | -29.8 | -50% |
| General & Administrative | 17.3 | 13% | 20.6 | 22% | 20.1 | 14% | 0.5 | 2% | 3.3 | 19% |
| Global & Regional Boards | 4.1 | 3% | 2.2 | 2% | 4.1 | 3% | -1.9 | -46% | -1.8 | -45% |
| Others | 14.7 | 11% | 10.8 | 11% | 12.9 | 9% | -2.1 | -16% | -3.9 | -26% |
| Total Operating Expenses | 135.3 | 100% | 95.0 | 100% | 141.9 | 100% | -47.0 | -33% | -40.3 | -30% |
| Operating Result | -38.7 | -26.7 | -42.5 | 15.9 | -37% | 12.1 | 31% | |||
| Financial Result | 213.2 | 72.7 | 35.0 | 37.7 | 108% | -140.5 | 66% | |||
| Net Result | 174.5 | 46.0 | -7.5 | 53.6 | n/a | -128.4 | 74% | |||
Asset management
The Asset Management Result of CHF 74.6 million reflects an actual return of 5.5 percent on the underlying financial assets amounting to CHF 1,435 million by the end of 2020.
Employees
The number of permanent staff increased from 291.5 to 295.8 full-time equivalents (FTEs), the percentages of their distribution across the AO is represented below.
-
Institutes
121.4 FTEs/41%
-
Clinical Divisions
106.8 FTEs/36%
-
Support Units
65.1 FTEs/22%
-
Others
2.5 FTEs/1%
Transparency section
According to its transparency policy, the AO Foundation publishes annually the total remuneration of the AO Foundation Board (AOFB), international boards of the clinical divisions, and the AO Executive Management, in addition to disclosing all scientific grants to third parties.
Remunerations per board
The total remunerations summarized for all governance activities of the International Funding Boards in 2020 were CHF 1,309,950 (2019: CHF 1,294,500) which is 1.4 percent (2019: 1.0 percent) of the total Operating Expenses of the AO Foundation and its institutions. The table below shows the total remuneration of each individual international board in absolute amounts CHF and as a percent of the total amount of individual operational expenses, as well as the absolute amount of the highest individual remuneration amount within each board in 2020:
| 2019 | 2020 | |
| AO Foundation Board | 10 members | 10 members |
| Total AO Foundation Board | 352,500 | 352,500 |
| % of total Operating Expenses AO Foundation | 0.3% | 0.4% |
| Highest remuneration AO Foundation Board | 110,000* | 110,000 |
| AO Trauma International Board | 10 members | 10 members |
| Total AO TIB | 325,000 | 331,250 |
| % of total Operating Expenses AO Trauma | 0.9% | 1.9% |
| Highest remuneration AO TIB | 75,000 | 56,250 |
| AO Spine International Board | 11 members | 11 members |
| Total AO SIB | 312,500 | 312,500 |
| % of total Operating Expenses AO Spine | 1.4% | 2.4% |
| Highest remuneration AO SIB | 75,000 | 75,000 |
| AO CMF International Board | 9 members | 9 members |
| Total AO CMFIB | 250,000 | 262,500 |
| % of total Operating Expenses AO CMF | 2.7% | 5.6% |
| Highest remuneration AO CMFIB | 75,000 | 75,000 |
| AO VET International Board | 9 members | 9 members |
| Total AO VETIB | 54,500 | 51,200 |
| % of total Operating Expenses AO VET | 1.5% | 2.7% |
| Highest remuneration AO VETIB | 30,000 | 30,000 |
| Grand Total | 1,294,500 | 1,309,950 |
Remuneration of the AO's Executive Management
The total annual compensation of ten members of the AO Executive Management (pro-rata January until July 2020) and the six members of the AO Executive Committee (pro-rata August until December 2020) in 2020 was CHF 2,248,621 (2019: CHF 2,784,570). The highest individual compensation was CHF 331,600 resulting in a 1/6.58 relative ratio between the highest and the lowest paid individual compensation (permanent employees).
Assignment of scientific and other grants to third party organizations
In 2020, AO Foundation funded research projects with scientific and other grants in a total of CHF 2,515,328 in 33 different third-party organizations (2019: CHF 2,462,458).