Remuneration Information • Apr 8, 2020
Remuneration Information
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At the 2020 Annual General Meeting, the Board (the Board) of Hunter Group ASA (the Company) will submit the following declaration on the determination of salaries and other compensation to senior executives pursuant to the Public Limited Companies Act section 6-16a, based on the group's guidelines for compensation to senior executives.
The Board determines the salary and other compensation for the CEO and establishes guidelines for such schemes when they apply to other senior executives.
The Company's compensation philosophy, as approved by the Board, is to provide a robust and competitive total rewards package that attracts and retains talented people and provides the rewards for its employees who consistently and continually demonstrate the highest levels of performance.
The Board aims to establish remuneration arrangements that encourage the management team to work for a long-term value creation in the Company, by using a blend of components, such as: base salary, short term incentives (STI), long-term incentives (LTI) and non-financial benefits.
The remuneration of the senior executives shall create motivation and be compounded in a manner that encourages additional effort in order to improve the business activities and the Company's financial results. The remuneration of senior executives shall always be determined under proper consideration to the Company's economic situation and shall be established at a level that can be justified taken the Company's' position into account.
In 2019 the senior executives were defined as Mr. Erik A. S. Frydendal (CEO, Hunter Group) and Mr. Lars M. Brynildsrud (CFO, Hunter Group). Mr. Frydendal took on the positions as CFO and CEO from 15 May 2018. Mr. Brynildsrud replaced Mr. Frydendal as CFO with effect from 12 August 2019.
The remuneration allocated to the senior executives of the Company is set out in note 23 to the Company's financial accounts for 2019.
No short-term incentives have been paid or agreed with the senior executives in 2019. The following longterm incentives have been agreed with the senior executives in 2019 (hereinafter the 2019 LTI Options):
| Holder | Date of grant | No. 2019 LTI Options |
|---|---|---|
| Sagittarius Capital Ltd., controlled by CEO Erik A. S. Frydendal | 25 April 2019 | 1,000,000 |
| Sujoy Seal, COO of the Company | 25 April 2019 | 500,000 |
| Lars M. Brynildsrud, CFO of the Company | 12 August 2019 | 500,000 |
| SUM | 2,000,000 |
The 2019 LTI Options shall vest on the date falling 12 months following the date of grant. Each 2019 LTI Option entitles one share in the Company (the LTI PIK Settlement), with a strike price at NOK 3.65.
The Company is obliged to have an occupational pension scheme for employees in accordance with The Norwegian Mandatory Occupational Pension Act. The Company has a defined contribution pension scheme that complies with the Norwegian occupational pension legislation (called OTP). The pension contributions range from 4 % 0 - 7.1 G to 7 % 7.1 -12 G of the employee's salary - maximized to a percentage of 12 G (NOK 1,198,296). The National Insurance scheme basic amount for 2019 is NOK 99,858. The retirement age for all employees, including the management, is 67 years.
The senior executives received payments in kind which are common in comparable positions, such as free phone, home computer, free broadband connection and newspapers.
The Company's compensation philosophy, as approved by the Board, by using a blend of components, such as: base salary, short term incentives (STI), long-term incentives (LTI) and non-financial benefits; will be continued in 2020 (as the Board finds appropriate).
The size of the base salary and, as applicable, any short-term incentives, in relation to annual fixed salary, will be determined by the Board with regard to each of the senior executives. The Board will consider short term incentives that provides incentives in the form of awards to senior executives who can contribute materially to the success and profitability of the Company and its subsidiary.
The Board may remunerate the Company's executive employees in the form of shares, options or other remuneration linked to the Company's shares or share value.
The Board proposes that the general meeting approves amended long-term incentives for the Company's senior executives, cf. the Norwegian Public Limited Companies Act sections 5-6 (3) and 6-16a first paragraph third sentence no. 3 (the LTI Plan).
The Board is of the opinion that the suggested LTI Plan is highly appropriate for attraction and retention of quality personnel to the Company, and thus a proper instrument which secure the Company the required competence. On this basis, the Board has developed the LTI Plan, which will, upon vesting, consist of options to subscribe for (or acquire, as determined by the Board) ordinary shares in the Company (the LTI Options).
The LTI Plan is administered by the Board and may, within the scope of the program (the LTI Rules), in force from time to time, be allocated to current and future executives in the Company. Under the LTI Rules the Board determines (as applicable): the adoption dates, eligible participants, vesting dates, option grants, subscription price etc.
The total number of LTI Options in the Company, under the terms of the LTI Rules, in force from time to time, shall in no event exceed 1 percent of the registered number of shares in the Company as per the date of adoption of new LTI Options.
The Board intends in 2020, to the current senior executives, to issue up to 3,000,000 new LTI Options (the 2020 LTI Options), in addition to the 2019 LTI Options, which shall vest on the date falling 12 months following the date of grant. The price payable for the shares under the LTI PIK Settlement shall be market based.
The sum of the 2019 LTI Options and the suggested 2020 LTI Options aggregate to approx. 0.86% of the current number of outstanding shares in Hunter.
The Board shall make appropriate adjustments with regard to the number of shares the exercise of an LTI Option shall result in, the subscription price, or the terms of the LTI Option, in the event of any subdivision, dividends, consolidation or a reduction of the share capital or any other corporate transaction which have a material adverse effect to the value of such LTI Option.
The holders of the LTI Options (for 2019 and 2020) shall, as from the date falling 12 months following the date of grant, as an alternative to LTI PIK Settlement, be entitled settlement in cash (the LTI Cash Settlement), being the difference between the closing trading price of the Company's share as per the date of exercising LTI Cash Settlement, less the agreed strike price for the LTI Options. Following such LTI Cash Settlement (if any), the LTI Options settled with LTI Cash Settlement, will become null and void.
The Board believes the LTI Plan provides a high degree of symmetrical interest with the Company's shareholders, and that the risk of random economic outcome is reduced through the provisions of the LTI Rules (as administered by the Board).
The Board enters into separate LTI agreements with the eligible participants in the LTI Plan, specifying rights and obligations in further detail.
The remuneration policy for the senior executives of the Company in the financial year 2019 has been executed in accordance with the guidelines for determination of salary and other remuneration as set out above.
The Board of Directors of Hunter Group ASA
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