1. Remuneration - Complied with
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Recommendation:
The Committee recommends that the total remuneration (fixed pay, incentive pay covering all forms of variable pay, pension, severance pay and other benefits) be at a competitive and fair level, reflecting the independent performance and value creation in the company of the members of the executive board and the supervisory board.
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Auriga’s comments on the recommendations:
It is ensured that the remuneration of the Board of Executives and the Board of Directors is in accordance with the general practice in the market and reflects the efforts required.
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2. Remuneration policy - Complied with
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Recommendation:
DThe Committee recommends that the supervisory board adopt a remuneration policy and that the company disclose the contents of such policy in its annual report and on the company’s website.
DThe Committee recommends that the remuneration policy reflect the interests of the company and the shareholders, match the specific conditions of the company and be reasonable in relation to the tasks and responsibilities undertaken and that it promotes long-term behaviour and is transparent and easy to understand.
The Committee recommends that the remuneration policy include a statement explaining the fixed pay and the overall principles of the incentive pay programme (covering all forms of variable pay), including the terms of the vesting/granting of bonus/performance-related bonus and/or price-related incentive schemes, etc., as well as pension schemes and severance programmes and other benefits. Information about the relationship between the fixed pay, the incentive pay and the other elements of the pay is a part of the remuneration policy.
The Committee recommends that any defined benefit schemes be disclosed.
The Committee recommends that the company’s remuneration, including incentive pay, policy reporting include a statement explaining how such policy was implemented in the past financial year, how such policy is implemented in the current financial year and how the company plans to implement it in the next financial year.
The Committee recommends that the remuneration policy contain clear and comprehensible information that is easy to understand by the individual shareholder and which enables the shareholder to see that the supervisory board complies with the remuneration policy and the guidelines adopted for incentive pay. Thus, there must be a connection between the information communicated to and approved by the general meeting prior to the granting and the annual report stating the facts after the granting.
The Committee recommends that the company’s remuneration policy be mentioned in the statement given by the chairman at the company’s general meeting and that the remuneration of the supervisory board for the current financial year be presented for adoption at the general meeting when the annual report for the previous year is submitted for adoption.
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Auriga’s comments on the recommendations:
General guidelines concerning performance-related remuneration of the Board of Executives were adopted by the general meeting in 2008.
Members of the Board of Directors receive fixed remuneration and do not receive any performance-related remuneration.
The Board of Directors determines the remuneration for the Board of Executives once a year. The basic pay received by members of the Board of Executives is often supplemented by performance-related remuneration schemes. Other employee groups typically receive basic pay, bonus/profit-sharing and pension contributions.
The general meeting approves the remuneration for the Board of Directors and the Board of Executives, including any performance-related remuneration, which, in comparison with current law, is described in further detail in the notes in the annual report.
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3. General guidelines for incentive pay - Complied with
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Recommendation:
The Committee recommends that the general guidelines for incentive pay reflect the interests of the shareholders and the company, match the specific conditions of the company and be reasonable in relation to the tasks and responsibilities undertaken. There must be a connection between the information communicated to and approved by the general meeting prior to the granting and the annual report showing the specific results of the approved guidelines for incentive pay.
The Committee recommends that the remuneration of the members of the supervisory board not consist of share option schemes, but e.g. bonus schemes and shares at market price.
If the remuneration of the members of the executive board consists of share or subscription options, the Committee recommends that the schemes be set up as roll-over schemes (i.e. the options are granted periodically e.g. every year and expire over a number of years) and that the redemption price be higher than the market price at the time of granting.
The Committee recommends that incentive pay programmes be designed in such a way that they promote long-term behaviour and are transparent and easy to understand, even for outsiders, and that valuation at the time of granting be made according to generally accepted methods.
Comment: Section 69b of the Danish Companies Act provides that the supervisory board of the company must have specified general guidelines for incentive programmes for the company’s supervisory board or executive board before the company can enter into a specific agreement on incentive pay with a member of the supervisory board or the executive board. The guidelines must be considered and approved by the company in general meeting.
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Auriga’s comments on the recommendations:
General guidelines concerning performance-related remuneration of the Board of Executives were adopted by the general meeting in 2008. Members of the Board of Directors do not receive any performance-related remuneration.
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4. Severance programmes - Complied with
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Recommendation:
The Committee recommends that information about the most important aspects of severance programmes be disclosed in the company’s annual report.
Comment: Severance programmes cover a wide area, including number of years’ notice and qualification, change of control agreements, ‘golden handshakes’, insurance and pension schemes, payment of pension contributions after retirement, etc.
Pursuant to section 107a of the Danish Financial Statements Act a company’s annual report shall include information on special retirement agreements resulting from a successfully completed takeover bid. If, in exceptional cases, severance programmes include an element of incentive pay, such programmes shall be covered by section 3.
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Auriga’s comments on the recommendations:
No agreement has been made with any member of the Board of Executives which imposes obligations of an unusual nature on the company over and above one year of severance pay.
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5.Openness about remuneration - Complied with
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Recommendation:
The Committee recommends that the annual report include information about the amounts of total remuneration of the individual members of the supervisory board and the executive board provided by the company or other companies within the same group
Comment: The annual report should contain all, clear and comprehensible information about the remuneration of the individual members of the management body that is easy to understand by the individual shareholder and which enables the shareholder to follow up on the compliance with the remuneration policy and the general guidelines adopted for incentive pay.
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Auriga’s comments on the recommendations:
The remuneration paid to the Chairman of the Board, the Deputy Chairman and the other board members was stated at the company’s general meeting on 2 April 2009 and mentioned in the subsequent company announcement to the market.
In future, Auriga’s website and annual report will contain comprehensible information on the remuneration paid to members of the Board of Directors and the Board of Executives as well as the audit committee.
The remuneration paid to the Board of Directors in 2008 amounted to DKK 2.3 million, and the same amount will be paid in 2009. The Chairman of the Board of Directors receives remuneration of DKK 500,000 a year, while the Deputy Chairman is paid DKK 300,000 a year, and ordinary members are paid DKK 225,000 a year.
The Board of Directors has decided to appoint an audit committee consisting of two members. The Board of Directors has decided that the committee chairman will receive remuneration of DKK 200,000, while the ordinary member will be paid DKK 100,000 a year.
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