Remuneration to the Board of Directors
Fees to Board members elected by the annual general meeting are approved by the annual general meeting. It was decided at the annual general meeting on 5 May 2020 that fees be paid at a rate of SEK 440,000 to the Chairman and SEK 240,000 to each of the other Board members who are not employed by the Company. In addition, it was decided that compensation for committee work shall be paid at a rate of SEK 100,000 to the Chairman of the Audit Committee and SEK 24,000 to each of the other members of the Audit Committee and SEK 20,000 to the Chairman of the Remuneration Committee.
Guidelines for remuneration to senior executives
According to the Swedish Companies Act, the Annual General Meeting shall decide on guidelines for remuneration to the CEO and other senior executives. The following guidelines were adopted at the Annual General Meeting on May 5, 2020.
The Company’s starting point is that remuneration shall be paid on market and competitive terms that allow senior executives to be recruited and retained. Remuneration to senior executives may consist of basic salary, variable remuneration, pension, other benefits and share-based incentive programs. The CEO and other senior executives can be entitled to other customary benefits of 20 percent of the basic salary per year, but not more than 15,000 SEK per month.
Remuneration to the CEO and other senior executives shall be based on factors such as work responsibilities, competence, experience, position and performance. Variable compensation shall be linked to predetermined and measurable criteria, designed to promote Alligator’s business strategy and long-term interests, including its sustainability. The compensation shall not be discriminatory on grounds of sex, ethnic background, national origin, age, disability or other irrelevant circumstances.
The CEO and other senior executives shall be offered a fixed salary that is market-based and based on the individual’s responsibility, competence and performance. In addition to salary, the CEO and
other senior executives are generally entitled to an annual bonus of no more than 30 percent of the basic salary.
Pension benefits, including health insurance, shall be defined contribution stake, to the extent that the executive is not covered by defined benefit pension under mandatory collective agreement
provisions. Pension premiums for defined-contribution pensions may not exceed 30 per cent of the fixed annual salary.
Additional variable cash compensation may be paid in extraordinary circumstances, provided that such extraordinary arrangements are made only at the individual level either for the purpose of recruiting or retaining executives, or in return for extraordinary work in addition to the person’s regular duties. Such remuneration may not exceed an amount equal to 30% of the fixed annual salary and shall not be paid more than once a year per individual. The Decision on such remuneration shall be taken by the Board of Directors after preparation by the Remuneration Committee.
At the termination of the employment, the notice period may not exceed six months. Severance pay, in addition to salary and other benefits during the notice period, may not exceed an amount equal to six times the monthly cash salary. However, in the event of termination by the executive, the notice period may be no more than six months without entitlement to severance pay. In addition to salary during the notice period, severance pay and compensation for the commitment to any restriction of competition may be paid. Such compensation shall compensate for any loss of income and shall be paid only to the extent that the former executive is not entitled to severance pay for the period for which the commitment relates. The remuneration shall be paid on the basis of the fixed salary at the end of the employment and shall not exceed 60 % of the fixed salary at the end of the employment, subject to mandatory collective agreements, and shall be paid for the period of commitment which shall be no more than 12 months after the termination of employment.
The Board of Directors may deviate from the guidelines in whole or in part if, in an individual case, there are special reasons for doing so and a deviation is necessary to satisfy the long-term interests of the company, including its sustainability, or to ensure the company’s financial viability. It is part of the Remuneration committee’s task to prepare the Board’s decisions on remuneration issues, which includes decisions on deviations from the guidelines.
Share-related incentive programs
Warrant program 2016/2020
The annual general meeting of 20 April, 2016 decided in favor of a warrant program with the issue of no more than 1,000,000 warrants to a Group subsidiary for transfer on to employees of the Company. In total, 1,000,000 warrants were subscribed for by the subsidiary of which 877,000 warrants have thus far been transferred to participants in the program while the remaining 123,000 warrants have been reserved for transfers to future employees. The transfer to the participants was made at market value calculated according to the Black-Scholes formula. Each warrant gives the right to subscribe for one new share in the Company at an exercise price of SEK 75 per share. The warrants can be exercised during the periods as of 1 June 2019 until and including 31 August 2019, and as of 1 March 2020 until and including 31 May 2020. With full exercise of the warrants, the Company's share capital will increase by SEK 400,000 through the issue of 1,000,000 shares. The warrants are subject to normal recalculation conditions in connection with share issues etc.
Employee stock option program 2016/2020
The annual general meeting of 20 April, 2016 decided to introduce an employee stock option program for a maximum of 1,000,000 employee stock options. In total, 900,000 employee stock options were issued free of charge to participants in the program. Granted employee stock options are vested with 1/3 on 1 May 2017, 1/3 on 1 May 2018 and 1/3 on 1 May 2019. Vesting requires that the participant continues to be employed by the Company and has not terminated his/her employment as of the date when the respective entitlement is vested. In the event the participant ceases to be an employee or terminates his employment with the Company prior to a vested date, stock options already vested can be exercised at the ordinary date for exercise according to that stated below, but no further vesting will occur. Each vested option entitles the holder to acquire one share of the Company at an exercise price of SEK 75. Vested employee stock options can be exercised during the periods from and including 1 June 2019 up to and including 31 August 2019, and from and including 1 March 2020 up to and including 31 May 2020. The employee stock options are subject to normal recalculation conditions in connection with share issues etc.
To enable the Company's delivery of shares under the employee stock option program and thereby to secure ancillary costs, primarily social security expenses, the annual general meeting also decided to issue up to 1,314,200 warrants to a wholly owned subsidiary. Total issued subsidiary 1,182,780 warrants. With full exercise of the warrants, the Company's share capital will increase by SEK 473,112 through the issue of 1,182,780 shares.
Employee stock option program 2018/2022
The annual general meeting of 26 April, 2018 decided to introduce an employee stock option program for a maximum of 2,300,000 employee stock options.
To enable the Company's delivery of shares under the employee stock option program and thereby to secure ancillary costs, primarily social security expenses, the annual general meeting also decided to issue up to 3,022,660 warrants to a wholly owned subsidiary.