The Board of Directors proposes that the Meeting approves the guidelines for remuneration for the period until the next annual general meeting offered to:
- the CEO;
- any other members of the senior management team of the Company; and
- any board member employed by the Company or any subsidiary thereof,
(collectively, the “Senior Management”).
These guidelines are also to be applied to any amendment of existing agreements as well as any execution of new agreements with the members of the Senior Management.
OBJECTIVES OF THE REMUNERATION POLICY
The main objective is to ensure that the Company can attract, motivate and retain qualified members with the skills, competence, expertise and experience required for the Company to achieve its operating goals, to promote its business strategy and to safeguard its interests (including in the long term) and its sustainability. The Remuneration Policy aims also to align the interests of the Senior Management with those of the Company’s shareholders.
In this respect, there must be transparency and alignment to the delivery of strategic objectives, both at the group and individual level. There must also be scope for the reward of exceptional efforts and achievements that deliver value to the group and the shareholders.
The remuneration offered by the Company shall be competitive and in line with market practice. It shall be designed to support the Company’s strategy and interests, through different mechanisms. In particular, besides the fixed salary and other benefits in kind, it may include the following variable components for those members of the Senior Management who do not sit on the Board of Directors of the Company:
- a possible cash variable component, in connection with the attainment of short-terms business goals (performance criteria will be applied, in connection with associated financial or non-financial goals, sometimes linked to the targets communicated to the market, to be achieved on certain quarters or on a yearly basis);
- a possible share-based incentive scheme, to secure a strong ongoing alignment with the shareholders, through the Company’s share price performance, in order to safeguard the Company’s long-term interests.
The combination of the above components seeks to create a well-balanced remuneration reflecting individual competences, responsibilities and performance, both short-term and long-term, to the benefit of the Company and its shareholders. In particular, the Company aims to balance equity and cash components, so that unnecessary risk-taking is not encouraged.
The remuneration is reviewed annually, considering all elements of the remuneration together to ensure that the remuneration package as a whole remains competitive.
TYPES OF REMUNERATION
The total remuneration of the Senior Management may consist of the following components:
Fixed base salary
The Senior Management’s fixed salary shall be competitive, in line with market practice and based on the individual member’s competence, responsibilities and performance. While the same principles apply to all employees irrespective of their geographic location, but the actual remuneration depends on local market conditions and may therefore vary by country. Senior Management do not receive remuneration for board assignments in any Group Companies.
- Provides a sound basis on which to recruit and retain senior management members of appropriate calibre to deliver the strategic objectives of the Company.
- Reflects the market value of the role and the post holder’s experience, competency, and performance within the Company.
The fixed salary is paid monthly in cash via payroll and reviewed on an annual basis for each calendar year. The Remuneration Committee reviews the CEO’s fixed base salary, and provides the CEO with a budget to review the fixed base salaries of the senior management team.
Benefits in kind
The offered benefits (including, for instance, private health, life insurance and more rarely, housing and school allowances) shall be competitive and cost-effective, in line with mandatory rules or established local practice depending on which law the individual is located. No performance metric applies.
Competitive and cost-effective pension benefits may be offered in line with mandatory rules or established local practice depending on the employee’s location of employment.
The pension benefit for member of the senior management team may amount to up to 15% of the fixed base salary. No performance metric applies.
Cash variable compensation (STI)
The Senior Management is offered a cash variable compensation, based on predetermined and measurable performance criteria.
- The on-target bonus for the CEO is up to 70% of his annual base salary and up to 40% for other senior management team members. Depending on the level of performance achieved, the annual variable remuneration can vary from no variable payment to a maximum of the defined on-target bonus.
- The remuneration committee is responsible to set the CEO’s performance criteria, whilst the CEO is responsible to set the performance criteria for senior management team members. The performance criteria applied may be financial or non-financial, corporate, divisional, or individual, and in such proportions as considered appropriate.
- Performance criteria shall be defined, documented, and communicated at the beginning of each financial year. New hires shall receive their performance criteria within 4 weeks after their date of employment.
- After the financial year has ended, the remuneration committee is responsible to evaluate the CEO’s achievement rate, and the CEO is responsible to evaluate the senior management’s achievement rates.
- The payout of the bonus shall be based on the achievement rate, measured against the agreed and documented performance criteria. When more than one performance criteria have been defined, the average achievement rate shall be used to determine the payout.
- The performance criteria in 2022 will be based on the revenue and EBITDA of the Company, as per the 2022 budget approved by the Board of Directors of the Company.
- 50% of the achieved bonus amount is paid within four weeks after the assessment has been completed, documented, and communicated to the employee. The remaining 50% shall be deferred for 6 months and only payable if the receiving employee is actively employed with the Company or any of its companies at the date of payout.
- The Remuneration Committee may at any time withdraw or modify the bonus scheme, and any bonus payment is in the full discretion of the Remuneration Committee. The fact that any participating employees may have received a bonus at any time does not give rise to any expectation or entitlement to receive any bonus in the future, or as to the size of any future
Share-based incentive schemes
The Board of Directors may also propose for the general meeting to resolve on long-term share incentive programs.
Please find below a brief summary of the last share incentive programs approved by the Company.
|2019 ESIP||2020 ESIP||2021 ESIP||2022 ESIP|
|Date||Resolved by AGM on 8 May 2019||Resolved by AGM on 15 May 2020||Resolved by AGM on 17 May 2021.||Resolved by AGM on 17 May 2022.|
|Number of shares and participants||Program comprises in the aggregate up to 758,012 share options which may entitle to the same number of new shares||Program comprises not more than 25 participants and in total up to 561,204 share options, which may entitle to the same number of new shares.||Same as 2020 ESIP||Program comprises not more than 28 participants and in total up to 1,080,000 share options, which may entitle to the same number of new shares.|
|Vesting period||Share options will vest for 3 years from the allocation to each participant, whereby 25 per cent will vest after the first year, an additional 25 per cent after the second year and the remaining 50 per cent will vest after the third year. The vesting is subject to the participant’s continuous employment with any Group Company||Share options vest for 3 years from the allocation to each participant, whereby 1/3 vests after the first year, an additional 1/3 after the second year and the remaining 1/3 vests after the third year. The vesting is subject to the participant’s continuous employment with any Group Company.||Same as 2020 ESIP||Same as 2020 ESIP|
|Exercise period||The options can be exercised during a period of 36 months commencing from the date on which the options were granted and ending within 6 months from the third anniversary date from the date on which the same options were granted||The options can be exercised during a period of 24 months commencing from the first anniversary from the date on which the same options were granted and ending within 6 months from the third anniversary date from the date on which the same options were granted||Same as 2020 ESIP||Same as 2020 ESIP|
|Exercise price||Each share option entitles the holder to acquire one share in the Company at an exercise price corresponding to 130 per cent of the volume-weighted average price of the Company’s share as quoted on Nasdaq First North Premier during a period of 10 trading days calculated as from and including 23 May 2019.||Each share option entitles the holder to acquire one share in the Company at an exercise price corresponding to 130 per cent of the volume-weighted average price of the Company’s share as quoted on Nasdaq First North Growth Market during a period of 10 trading days calculated as from and including 13 May 2020||Each share option entitles the holder to acquire one share in the Company at an exercise price corresponding to 130 per cent of the volume-weighted average price of the Company’s share as quoted on Nasdaq First North Growth Market during a period of 10 trading days calculated as from and including 12 May 2021||Each share option entitles the holder to acquire one share in the Company at an exercise price
corresponding to 130 per cent of the volume-weighted average price of the Company’s share as quoted
on Nasdaq First North Growth Market during a period of 10 trading days calculated as from and
including 11 May 2022.
More information on such programs can be found on the “General Meetings” section of our website, in the documentation concerning the above-mentioned 2019, 2020, 2021 and 2022 annual general meetings.
FURTHER RELEVANT ASPECTS
Notice of termination and severance payment
The maximum notice of termination period in any member of Senior Management’s contract is 9 months during which time payment of salary will continue. Upon termination by the company, and in addition to their fixed monthly salary during the notice period, the Senior Management is entitled to a maximum of 6 months’ base salary as severance pay. If termination is made by the Senior Management member, the period of notice may not exceed 9 months and there is no right to severance pay.
In a situation in which a bonus, or another incentive remuneration has been provided to a member of the Senior Management on the basis of data, information, or accounts which subsequently prove to have been incorrect, the Company may reclaim such remuneration component, in full or in part, on the basis of the correct data.
Deviations from this Remuneration Policy
The Board of Directors is entitled to depart from these guidelines in special circumstances, if any part of the Remuneration Policy no longer drives business performance, the achievement of the Company’s strategy or employee motivation and retention. In the event of any major departure, the shareholders will be informed of the reason at the following annual general meeting.
The Remuneration Policy shall be reviewed at least on an annual basis