Guidelines for remuneration of the Board of Directors and the Executive Board as adopted on the annual general meeting 10 April 2008, including incentive schemes, cf. the Danish Companies Act, Article 69b, par. 2.
General guidelines for the Company's remuneration of members of the Board of Directors and the Executive Board, including incentive scheme
Board of Directors
Members of the Board of Directors receive a fixed annual fee. The amount of the fee is approved by the shareholders and disclosed in the annual report. Fees are fixed based on a comparison with fees paid by other companies.
Members of the Board of Directors receive no incentive pay.
Executive Board
The Chairman and Vice Chairman of the Board perform an annual review of the remuneration paid to members of the Executive Board.
The remuneration paid to members of the Executive Board consists of a fixed and a variable part. The fixed pay consists of a net salary, pension contribution and other benefits. The value of each of those components is disclosed in the annual report.
As an element of the variable pay, members of the Executive Board may receive an annual bonus, subject to achievement of certain benchmarks. The bonus proportion varies among the members of the Executive Board, but is subject to a maximum of 80% of the annual net salary. The actual bonus paid to the Executive Board is disclosed in the Annual Report. At the date of adoption of these guidelines the bonus benchmarks comprise the Group's result before tax, but they may also comprise individual benchmarks.
Another element of the variable pay is made up of options and is intended to ensure that the Executive Board's incentive correlates with creation of shareholder value. The option plan is revolving and not subject to achievement of defined benchmarks.
Members of the Executive Board are awarded a number of options each year with a value equal to one years' net pay. The value is calculated in accordance with the Black Scholes formula. Options are awarded with a exercise price which is 5% higher than the market price at the award date. No fee is payed to the Company for the options. The options have a term of five years and are exercisable after three years. For tax purposes, the terms of the award entail that the gain is taxed as share income while the costs of the award are not tax-deductible for the Company. The number of options awarded to each member of the Executive Board and their value is disclosed in the Annual Report. Options in the Executive Board share option plan are covered by the Company's holding of treasury shares.
In addition, the Chairman and Vice Chairman of the Board perform an annual review of the remuneration paid to members of the Executive Board relative to the managements of other Danish companies.
Copenhagen, 10 April 2008