Remuneration Information • Mar 18, 2022
Remuneration Information
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for
Advisory vote by the general meeting on 19 April 2022
In accordance with the Norwegian Public Limited Liability Companies Act section 6-16 b, the board of directors of Aker Carbon Capture ASA has prepared a report on the salary and other remuneration of the CEO and senior executives of the Company awarded or due in 2021.
This report regards remuneration of the following executive management of 2021:
This remuneration report 2021 provides an overview of remuneration of the Executive Management of the Company in 2021 in relation to the Company's existing policy on remuneration of Executive Management as the Company will adopt its first Remuneration Policy pursuant to the Norwegian Public Limited Liability Companies Act section 6-16a in the annual general meeting to be held on 19 April 2022. This report has been prepared in accordance with the Norwegian Public Limited Liability Companies Act section 6-16 b.
The Company's Remuneration Policy is designed to align with the Company's overall business strategy, longterm interests. The main purpose of the Company's remuneration of Executive Management is to attract and retain executives, to align interests between executives and the Company's shareholders and to encourage a strong and sustainable performance-based culture which supports the Company's overall strategic ambitions and goals over time. The total remuneration of the Executive Management is therefore constructed as a combination of fixed salary and variable compensation.
A competitive fixed salary shall be paid to attract and retain high-quality and experienced executives and to provide appropriate remuneration for their important role in the Company. This is required to support the recruitment and retention of executives of the caliber required to implement the Company's strategy. The variable compensation is designed to ensure alignment between performance and remuneration and increase shareholder value while retaining key employees.
In addition to remuneration to the Executive Management, section 2 of this report contains information on compensation to the board of directors of Aker Carbon Capture for 2021.
Further information on remuneration can be found in Note 19 of the Consolidated Financial Statements in the 2021 Annual Integrated Report.
The general meeting determines the compensation to the board of directors based on a proposal from the Nomination Committee. At the 2022 ordinary general meeting the Nomination Committee proposes the compensation payable for the period between the 2021 ordinary general meeting and the 2022 ordinary general meeting.
Board member Oscar Fredrik Graff, through his firm Graff Consulting, received a payment of NOK 500 thousand in 2021 related to consultancy services performed in 2020 as a part of the initial establishment of Aker Carbon Capture. The board of directors did not receive any other fees than the aforementioned payment and those listed in the table below. The members of the board of directors have no agreements that entitle them to any extraordinary remuneration.
The fees in the table below represent expenses recognized in the income statement based on assumptions about fees to be approved at the general assembly rather than actual payments made.
| 2021 | 2020 | |||||
|---|---|---|---|---|---|---|
| Amounts in NOK thousand | Period | Audit | Board fees | Period | Audit | Board fees |
| Committee | Committee | |||||
| Henrik Overgaard Madsen | Jan – Dec 2021 | - | 533 | Aug – Dec 2020 | - | 167 |
| Kristian Monsen Røkke | Jan – Dec 2021 | 60 | 307 | Aug – Dec 2020 | - | 125 |
| Øyvind Eriksen | Jan – Dec 2021 | - | 307 | Aug – Dec 2020 | - | 75 |
| Oscar Fredrik Graff | Jan – Dec 2021 | - | 307 | Aug – Dec 2020 | - | 75 |
| Nina Jensen | Jan – Dec 2021 | - | 307 | Aug – Dec 2020 | - | 75 |
| Liv Monica Stubholt | May – Dec 2021 | 105 | 207 | n.a. | - | - |
| Linda Litlekalsøy Aase | Jun – Dec 2021 | - | 181 | n.a. | - | - |
According to Aker group policy, fees earned by a director employed in any of the Aker group companies are paid to such company, not to the director in person. Therefore, board fees for Kristian Monsen Røkke, Øyvind Eriksen and Linda Litlekalsøy Aase will be paid to employer company. For Nina Jensen, 50 percent of the fee will be paid to REV Ocean AS.
Aker Carbon Capture was established as a standalone company in the summer of 2020, following more than 15 years of developing carbon capture technology and solutions in the Aker Group. The company's revenues increased from NOK 16 million in 2020 to NOK 363 million in 2021, primarily driven by increased activity on the Brevik CCS project. Operating loss ended at negative NOK 195 million, compared to negative NOK 45 million in 2020. The higher operating loss was primarily caused by an increase in salary and personnel costs as well as other operating expenses in line with increasing activity levels and growth ambitions of the company. Loss for the period was negative by NOK 192 million, compared to NOK 44 million in 2020.
Information about key events for the financial year 2021 and Aker Carbon Capture's overall performance is found in the 2021 Annual Integrated Report on the Aker Carbon Capture home page: www.akercarboncapture.com.
The main performance objectives used in 2021 for the Executive Management's achievement of variable remuneration, which is described in further detail under section 3.3 below, are related to the following:
In January 2021, the company formally established its executive management team consisting of the CEO, CCO, CPO, CTO and General Counsel. Through the year, the company externally recruited the CFO and People & Organization Director. In 2020, the CEO alone represented the company's Executive Management.
In 2021, the remuneration to Executives consisted of a combination of fixed salary and variable pay. The executive management received between 25-45% of their total remuneration as variable pay (excluding extraordinary items). The ratio of the CEO's compensation to median compensation for all employees was 3.6 for 2021. The average base salary for non-executive employees was NOK 1,008 thousand in 2021, and NOK 1,012 thousand in 2020.
A competitive remuneration contributes to attract and retain high-quality and experienced executives of the caliber required to implement the Company's strategy. The variable compensation is designed to ensure alignment between performance and remuneration and increase shareholder value while retaining key employees.
The fixed remuneration to the CEO is recommended by the chairman of the Board and approved by the Board of Directors on an annual basis. The remuneration to the remaining executive management shall be approved by the CEO, in consultation with the chairman of the Board, and informed to the Board of Directors of Aker Carbon Capture on an annual basis.
The fixed base salaries are based on the following objective criteria:
The annual variable pay program for Executive Management is assessed against annual performance targets that signal and reward the strategic and operational results and behaviors expected for the year that contribute to the long-term, sustainable value creation for Aker Carbon Capture.
Payment under the variable pay program is recommended by the CEO and approved by the board on an annual basis. The payments are subject to a discretionary assessment based on the two components:
The variable remuneration is earned over a period of one year and the maximum achievable payment is 100% of annual base salary for the CEO and between 40-70% for the other members of the Executive Management team.
The definition of the Company objectives and fulfilment assessment is subject to the Chairman and Board of Directors' approval and subsequent discretionary assessment. For the CEO, individual objectives are approved and assessed by the Chairman. For executives the individual objectives are set and assessed by the CEO.
In 2021, the executives received variable remuneration between 80%-85% of the individual bonus potential, due to the combination of achieved company objectives and individual performance objectives. The fulfillment of company measures is mainly connected to the achievements described in section 2.
For further information about the remuneration awarded or due in 2021 see Table 1 below.
For variable pay, the fees below represent what has been recognized in the income statement rather than actual payments made in the year.
| Fixed remuneration | Variable | Extra | Total | Proportion | |||||
|---|---|---|---|---|---|---|---|---|---|
| Name of Director, position | Period 1 | Base salary |
Fringe benefits 5 |
One-year variable |
Multi-year variable |
ordinary items 2 |
remunera tion 3 |
Pension expense 4 |
fixed vs variable remuneration |
| Valborg Lundegaard, CEO | Jan - Dec 2021 | 3 406 | 30 | 3 330 | ‑ | ‑ | 6 766 | 96 | 51/49 |
| Aug – Dec 2020 | 1 237 | 15 | 1 456 | ‑ | ‑ | 2 707 | 107 | 46/54 | |
| Egil Fagerland, CFO | Apr – Dec 2021 | 1 129 | 6 | 826 | ‑ | 125 | 2 086 | 63 | 54 / 46 |
| Pernille Brente, General counsel | Jan – Dec 2021 | 1 426 | 32 | 510 | ‑ | ‑ | 1 968 | 199 | 74/26 |
| Erik Langholm, CPO | Jan – Dec 2021 | 1 842 | 18 | 1 166 | ‑ | ‑ | 3 026 | 91 | 61/39 |
| Jon Christopher Knudsen, CCO | Jan – Dec 2021 | 1 858 | 10 | 1 169 | 3 037 | 85 | 61/39 | ||
| Jim Stian Olsen, CTO | Jan – Dec 2021 | 1 411 | 8 | 840 | 2 259 | 85 | 63/37 | ||
| Nina Westgaard, People & Org | Sep – Dec 2021 | 510 | 3 | 255 | 768 | 30 | 67/33 |
Amounts in NOK thousand
1) In January 2021, the company formally established is executive management team consisting of the CEO, CCO, CPO, CTO and General Counsel. The company also recruited the CFO and People & Organization Director positions in 2021. In 2020 the executive management consisted solely of the CEO, thus comparable figures are only available for the CEO
adjustment of the pensionable income, and accrued interest according to market interest. The compensation plan is an unfunded plan and is calculated using an earned balance method.
5) Fringe benefits include membership in the standard employee benefit scheme and an additional executive group life and disability insurance.
The Company has not granted remuneration to the Executive Management in the form of shares, subscription rights, options, and other forms of remuneration linked to shares or the development of the share price in the Company or in other companies within the group.
No remuneration has been reclaimed in 2021.
Fornebu, 17 March 2022 Board of Directors and Chief Executive Officer of Aker Carbon Capture ASA
KPMG AS Sørkedalsveien 6 Postboks 7000 Majorstuen 0306 Oslo
Telephone +47 45 40 40 63 Fax Internet www.kpmg.no Enterprise 935 174 627 MVA
To the General Meeting of Aker Carbon Capture ASA
Opinion
We have performed an assurance engagement to obtain reasonable assurance that Aker Carbon Capture ASA report on salary and other remuneration to directors (the remuneration report) for the financial year ended 31 December 2021 has been prepared in accordance with section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation.
In our opinion, the remuneration report has been prepared, in all material respects, in accordance with section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation.
We draw attention to section 1. "Introduction, scope and purpose" in the remuneration report. The Company was listed on Oslo Stock Exchange after the annual General Meeting in 2021. Due to this, no remuneration policy prepared in accordance with section 6-16 a of the Norwegian Public Limited Liability Companies Act has been approved by the General Meeting in 2021. Remuneration of the directors in the financial year 2021 is based on the principles described in the remuneration report section 1. "Introduction, scope and purpose". Our opinion is not modified in respect of this matter.
The board of directors is responsible for the preparation of the remuneration report and that it contains the information required in section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation and for such internal control as the board of directors determines is necessary for the preparation of a remuneration report that is free from material misstatements, whether due to fraud or error.
We are independent of the company as required by laws and regulations and the International Ethics Standards Board for Accountants' Code of International Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. Our firm applies International Standard on Quality Control 1 (ISQC 1) and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.
Our responsibility is to express an opinion on whether the remuneration report contains the information required in section 6-16 b of the Norwegian Public Limited Liability Companies Act and the accompanying regulation and that the information in the remuneration report is free from material misstatements. We conducted our work in accordance with the International Standard for Assurance Engagements (ISAE) 3000 – "Assurance engagements other than audits or reviews of historical financial information".
We obtained an understanding of the principles for remuneration of the directors in the financial year 2021. Our procedures included obtaining an understanding of the internal control relevant to the preparation of the remuneration report in order to design procedures that are appropriate in the
| Oslo | Elverum | Mo i Rana | Stord |
|---|---|---|---|
| Alta | Finnsnes | Molde | Straume |
| Arendal | Hamar | Skien | Tromsø |
| Bergen | Haugesund | Sandefjord | Trondheim |
| Bodø | Knarvik | Sandnessjøen | Tynset |
| Drammen | Kristiansand | Stavanger | Ålesund |
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. Further we performed procedures to ensure completeness and accuracy of the information provided in the remuneration report, including whether it contains the information required by the law and accompanying regulation. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Oslo, 18 March 2022 KPMG AS
Vegard Tangerud State Authorised Public Accountant
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