Remuneration

Remuneration to the board of directors

Fees to board members elected by the general meeting are approved by the annual general meeting. At the annual general meeting held on June 28, 2016, it was resolved that fees of GBP 12,500 was to be paid to the chairman and that fees of SEK 60,000 were to be paid to each of Luigi Costa, Olof Tydén and Ulf Jungnelius.

Name Position Fee Other remuneration Total 
Alan Hulme Chairman 12,500 (1) 975,292 1,118,290
Johan Christenson Board member 0
Jonas Brambeck Board member 0
Luigi Costa (2) Board member 30,000 30,000
Olof Tydén Board member 60,000 60,000
Per Samuelsson Board member 0
Ulf Jungnelius Board member 60,000 60,000
Total: 292,998 975,292 1,268,290
(1) Amount in GBP.
(2) Since Luigi Costa was elected board member at mid-year 2016, only half of the decided remuneration has been paid.

For the annual general meeting 2017, the nomination committee will submit proposals in regard to remuneration.

Guidelines for remuneration to members of senior management

According to the Swedish Companies Act, the general meeting shall resolve on guidelines for remuneration to the CEO and other members of senior management. At the extraordinary general meeting held on 26 October 2016, guidelines were adopted with the following content.

The Company’s starting point is that salary and other terms and conditions shall enable the group to attract and retain qualified management persons at a reasonable cost for the Company. The remuneration for management persons shall be decided in accordance with Oncopeptides remuneration policy. The remuneration for management persons consist of fixed salary, variable remuneration, pension and other benefits. In order to avoid that the management persons take unnecessary risks there shall be a fundamental balance between fixed and variable remuneration.

Furthermore, the annual general meeting in Oncopeptides may, if so is ordered, offer long-term incentive programmes such as share or share price related incentive programmes. Each management person shall be offered a market level fixed salary based on the degree of difficulty, responsibilities, experience and performance. In addition, each management person may from time to time, be offered a variable remuneration (bonus) to be paid in cash. The variable remuneration shall be based on clear predetermined and measurable performance criteria and economic results, as well as predetermined individual objectives and business objectives, and shall also be designed to promote Oncopeptides long-term value creation. Management persons shall be offered pension terms that are in accordance with market practice in the country where the management persons habitually resides. Non-monetary benefits shall facilitate the work of the management persons and shall correspond to what is considered reasonable in relation to market practice. The fixed salary during the notice period shall, together with severance pay, not exceed 24 months’ fixed salary. Insofar board members who are elected by the general meeting carry out work in addition to work on the board of directors, it shall be possible to remunerate them for such work. The remuneration shall be in accordance with market terms and shall be approved by the board of directors.

The board of directors shall be entitled to deviate from the guidelines in individual cases should there be special reasons for doing so. The board of directors shall, before every annual general meeting, consider whether or not additional share or share price-related incentive programmes shall be proposed to the general meeting.

It is the general meeting that resolves upon such incentive programmes. Incentive programmes shall promote long-term value growth. New share issues and transfers of securities resolved upon by the general meeting in accordance with the rules of Chapter 16 of the Swedish Companies Act are not covered by the guidelines to the extent the annual general meeting has taken, or will take, such decisions.

Remuneration to senior management

Remuneration to senior management consists of basic salary, variable remuneration, pension benefits, share-related incentive programmes and other benefits and terms upon severance. For the financial year 2016, the CEO and other members of senior management received salary and other remuneration as set out in the table below. All amounts are in SEK.

2016 Fixed salary and other benefits Invoiced fees Bonus Pension expenses Total
CEO Jakob Lindberg 1,511,537 385,880 278,196 2,275,613
Other senior executies 1,467,641 3,702,523 200,939 364,427 5,735,530
Total 3,272,176 3,702,523 586,819 642,623 9,280,835

In addition to his monthly salary, the CEO is entitled to an annual bonus amounting to a maximum of 30 percent of the fixed annual salary. The bonus is linked to predetermined performance criteria. The Company contract and pay premiums for the applicable pension plan up to a maximum of 19 percent of the CEOs fixed monthly salary. The notice period is mutually nine months. Otherwise, the CEO is subject to customary terms of employment, containing provisions on confidentiality, non-competition and non-solicitation.

Share-related incentive programmes

Oncopeptides has three ongoing share-related incentive programmes which are presented below. Closely-related parties of the Company are participants in the mentioned incentive programmes.

Founder Option Programme

At the annual general meeting held on June 20, 2013 it was resolved to establish an option programme, “Founder Option Programme”. In total, 114 options have been assigned free of charge to participants in the programme without consideration being paid. Assigned options are vested immediately. Each founder option entitles the holder to acquire 900 new ordinary share in the Company at an exercise price of approximately SEK 8.88 (after recalculation in pursuance of the share split 1:900 decided upon at the extraordinary general meeting held on October 26, 2016). The option may be utilised at the earliest in connection with a trade sale of the Company or its assets, or in connection with the finalisation of a listing of the Company’s shares on Nasdaq Stockholm or another stock exchange of similar standing, but no later than November 2, 2019. The options are subject to customary recalculation conditions in connection with share issues etc. The delivery of shares in connection to utilisation of the options is secured through an issue of warrants to the Company’s subsidiary, to be utilised on behalf of the option holders by the subsidiary upon utilisation of the founder options. Should all the assigned founder options be exercised, the Company’s share capital will increase by SEK 11,400 through the issue of 102,600 ordinary shares (after recalculation in pursuance of the share split 1:900 decided upon at the extraordinary general meeting held on October 26, 2016), corresponding to a dilution of [0.25] percent based on the number of shares in the Company after the Offering 1).

Employee option programme 2012/2019

At the annual general meeting held on June 20, 2013 it was resolved to establish an employee option programme, “Employee Option Programme series 2012/2019”. In total, 1,505 employee options have been assigned free of charge to participants in the programme. Granted employee options are vested gradually over a four year period. Continued vesting requires that the holder is employed by the Company and that the employment is not terminated as per the day of vesting of each employee option. In the event the participant ceases to be an employee or terminates his employment with the Company prior to a vested date, employee options already vested can be exercised at the ordinary date for exercise according to that stated below, but no further vesting will occur. Each option entitles the holder to acquire 900 new ordinary shares in the Company at an exercise price of approximately SEK 0.11 (after recalculation in pursuance of the share split 1:900 decided upon at the extraordinary general meeting held on October 26, 2016). Vested employee options may be utilised at the earliest in connection with a trade sale of the Company or its assets, or in connection with a listing of the Company’s shares on Nasdaq Stockholm or another stock exchange of similar standing, but no later than November 2, 2019. The options are subject to customary recalculation conditions in connection with share issues etc. The delivery of shares in connection to utilisation of the options is secured through an issue of warrants to the Company’s subsidiary, to be utilised on behalf of the option holders by the subsidiary upon utilisation of the employee options. Should all the assigned employee options be exercised, the Company’s share capital will increase by SEK 150,500 through the issue of 1,354,500 ordinary shares (after recalculation in pursuance of the share split 1:900 decided upon at the extraordinary general meeting held on October 26, 2016), corresponding to a dilution of [3.29] percent based on the number of shares in the Company after the Offering 1). 

Employee option programme 2016/2023

At the board meeting held on November 22, 2016 it was resolved to establish an employee option programme, “Employee Option Programme series 2016/2023”. In total, 307 employee options have been assigned free of charge to participants in the programme. Granted employee options are vested gradually over a four year period. Continued vesting requires that the holder is employed by the Company and that the employment is not terminated as per the day of vesting of each employee option. In the event the participant ceases to be an employee or terminates his employment with the Company prior to a vested date, employee options already vested can be exercised at the ordinary date for exercise according to that stated below, but no further vesting will occur. Each option entitles the holder to acquire 900 new ordinary shares in the Company at an exercise price of approximately SEK 0.11 (after recalculation in pursuance of the share split 1:900 decided upon at the extraordinary general meeting held on October 26, 2016). Vested employee options may be utilised at the earliest after a trade sale of the Company or its assets, or after a listing of the Company’s shares on Nasdaq Stockholm or another stock exchange of similar standing, but no later than November 30, 2023. The options are subject to customary recalculation conditions in connection with share issues etc. The delivery of shares in connection to utilisation of the options is secured through an issue of warrants to the Company’s subsidiary, to be utilised on behalf of the option holders by the subsidiary upon utilisation of the employee options. Should all the assigned employee options in Employee Option Programme 2016/2023 be exercised, the Company’s share capital will increase by SEK 30,700 through the issue of 276,300 ordinary shares (after recalculation in pursuance of the share split 1:900 decided upon at the extraordinary general meeting held on October 26, 2016), corresponding to a dilution of [0.67] percent based on the number of shares in the Company after the Offering 1).

1) The calculation of the number of shares in the Company after the Offering is based on the assumption that the Offering is fully subscribed, that the Over-allotment Option is not utilised and that all outstanding options are utilised.