Loading
Corporate Governance
The Norwegian Public Limited Liability Companies Act established guidelines for the remuneration of the CEO and other senior executives of the company. The remuneration guidelines have been approved by the general meeting. The remuneration guidelines shall be clear and understandable and shall contribute to Kitron's business strategy, long-term interests, and financial sustainability. The arrangements for salary and other remuneration shall be simple and shall ensure convergence of the financial interests of the senior executives and shareholders.
The remunerations consist of fixed annual compensation that includes annual base salary and other possible benefits (such as pension plan). The total possible compensation also includes a short-term incentive scheme (STI) and a long-term incentive scheme (LTI).
Performance-related remuneration of the executive personnel in the form of share options, bonus programs, or the like should be linked to value creation for shareholders or the company’s earnings performance over time. Such arrangements, including share option arrangements, should incentivize performance and be based on quantifiable factors over which the employee in question can have influence. Performance-related remuneration should be subject to an absolute limit.
The actual level of annual base salaries (ABS) is based on market conditions and salary levels related to the actual position in the country in question. Kitron uses the Hay tool for determining market levels on an annual basis. The executive positions are evaluated using the Hay positioning grading tool.
Pension plans, based on defined contribution plans, are in place following the practice and regulations in each country. Other benefits are according to company policy and regulations in the country of residence.
The Board may grant specific purpose bonuses to members of the senior executive management.
The STI system has specific targets and defined maximum pay-outs and is set on an annual basis. The possible maximum pay-out is 85 percent of the annual basic salary. The STI system is based on performance of Revenue growth, EBIT, Return on Operating capital (ROOC) and ESG (sustainable energy at the sites).
The LTI system was established in 2013 as an option-based program with a three-year validity (2013-2016), and in 2015 the Board continued the share option program for executive management for another three-year period (2016-2019).
In 2018 the Board introduced a new share option program for executive management comprising of up to 5 000 000 shares. The program is divided into four three-year subprograms, each with an allocation of 1 250 000 option, where the first program started in 2019, followed by one program every year until 2023.
The total program corresponds to approximately 3 percent of the market capitalization.
Separate agreements describing the LTI systems and related conditions are in place for each senior executive. Maximum possible share options are defined per individual among the senior executives. Any possible pay-out will be depending on the Kitron group share price at the start of the program in comparison with the share price at the time of the expiry.
A more detailed description is provided in note 19 in the Consolidated Financial Statements.
Kitron reports all forms of remuneration received by the chief executive and each of the other members of the executive management.
Details on remuneration to senior executives and board members for 2023 are provided in the Remuneration Report available at www.kitron.com
