Remuneration

Remuneration to the board of directors

At the Annual General Meeting 2018, it was decided, in accordance with the Nomination Committee’s proposal, stipulated that fees to the Board, until the end of the next Annual General Meeting, will total of 2 545 000 SEK. The remuneration for regular board work shall amount to a total of 2 125 000 cash, of which the Chairman of the Board will receive SEK 625 000 and each of the other members shall receive SEK 250 000. In addition to the fees above for regular Board work, it was determined that each board member resident in the United States will receive an additional fee of SEK 85,000 and that each board member resident in Europe but outside the Nordic countries will receive an additional fee of SEK 42,500.

Name Board Position Additional Country Payment Audit Committee Remuneration Committee
Per Wold-Olsen Chairman EU Committee member Chairman
Jonas Brambeck Board member Committee member Committee member
Cecilia Daun-Wennborg Board member Chairman
Olof Tydén Board member
Per Samuelsson Board member Committee member Committee member
Ulf Jungnelius Board member EU
Brian Stuglik Board member US

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 according to the Board’s proposal to the AGM. At the general meeting held on May 17, 2018, 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, which is assumed annually by the Board and adds to the guidelines.

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.

Share-related incentive programmes

Oncopeptides has seven active programs which apply to the company’s management, certain Board members, founders and staff. Two incentive programs were established in 2013: the “Founder Option Program” and the “Employee Option Program 2012/2019”. The “Option Program 2016/2023” was established in 2016. “Co-worker LTIP 2017” and “Board LTIP 2017” in May 2017 and two additional incentive programs were adopted at the AGM in May 2018: “Co-worker LTIP 2018” and “Board LTIP 2018”. A brief description of the programs follows below. For additional information on the incentive programs see Oncopeptides annual report 2017.

Founder Option Programme

This program, which is for the company’s founders, was adopted at the 2013 AGM. In total, 114 options were allocated free of charge to participants in the program. The options were vested immediately. Each option entitles the holder to acquire 900 new ordinary shares in the company (after recalculation as a result of the 1:900 share split decided on at the extraordinary general meeting held on October 26, 2016). The options may be exercised through November 2, 2019.

Employee option programme 2012/2019

The 2013 AGM resolved to establish an employee option program referred to
as the “Employee Option Program 2012/2019”. In total, 1,505 options were allocated free of charge to participants in the program. The program has a four-year vesting period.
Each vested option entitles the holder to acquire 900 new ordinary shares in the company (after recalculation as a result of the 1:900 share split decided on at the extraordinary general meeting held on October 26, 2016). All of the options allocated have been fully vested and may be exercised through November 2, 2019. The options are subject to customary recalculation conditions in connection with share issues, etc.

Employee option programme 2016/2023

At the Board meeting held on November 22, 2016, it was resolved, with the support of the general meeting’s prior authorization, to establish an employee option program referred to as the “Employee Option Program 2016/2023”.
In total, 307 options were allocated free of charge to participants in the program. Allocated employee options are vested gradually over a four-year period (aside from 60 options in the series that vest and are allocated over a period of 12 months). 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 that the participant ceases to be an employee or terminates his or her employment with the company prior to a vesting date, employee options already vested and allocated can be exercised on 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 (after recalculation as a result of the 1:900 share split decided on at the extraordinary general meeting held on October 26, 2016). The options may be exercised through November 30, 2023. The options are subject to customary recalculation conditions in connection with share issues, etc.

Co-worker LTIP 2017

This is a long-term incentive program for certain members of senior management and other key personnel (including employees and consultants). Participants in this program will be allocated options free of charge, which will entitle the holder to acquire a maximum of 1,618,939 shares in Oncopeptides after a three-year vesting period. The Board of Directors will decide on the allocation of options on an annual basis. As of December 31, 2017, 863,000 options had been allocated. Each option entitles the holder to acquire one share in the company at a predetermined price. The price per share is to be equivalent to the volume-weighted average price of Oncopeptides’ share during the five trading days preceding the allocation date. The options shall be subject to earnings over a three-year period and have seven years’ maturity calculated from the date of grant.

Board LTIP 2017

This is a performance-based long-term incentive program for certain Oncopeptides Board members. Participants in this program will be allocated performance-based options free of charge, which will entitle the holder to acquire a maximum of 34,800 shares in Oncopeptides. The share rights are subject to performance-based vesting, based on the performance of Oncopeptides’ share price during the period from the date of the 2017 AGM through May 31, 2020. The share price’s performance will be measured as the volume-weighted average price of the company’s share 90 trading days immediately after the AGM and 90 trading days immediately before May 31, 2020. If Oncopeptides’ share price has then increased by over 60 percent, 100 percent of the share rights will be vested, and if the share price has increased by 20 percent, 33 percent of the share rights will be vested. In the event of an increase in the share price by an amount between 20 and 60 percent, the share rights will vest in a linear fashion. If the share price increases by less than 20 percent there will be no vesting. Any shares are to be allocated on June 1, 2020.

Co-worker LTIP 2018

This is a long-term incentive program for certain members of senior management and other key personnel (including employees and consultants). Participants in this program will be allocated options free of charge, which will entitle the holder to acquire a maximum of 440,025 shares in Oncopeptides. The Board of Directors will decide on the allocation of options on an annual basis. Each option entitles the holder to acquire one share in the company at a predetermined price. The price per share is to be equivalent to the volume-weighted average price of Oncopeptides’ share during the five trading days preceding the allocation date. The options shall be subject to earnings over a three-year period and have seven years’ maturity calculated from the date of grant.

Board LTIP 2018

This is a performance-based long-term incentive program for certain Oncopeptides Board members. Participants in this program will be allocated performance-based options free of charge, which will entitle the holder to acquire a maximum of 43,120 shares in Oncopeptides. The share rights are subject to performance-based vesting, based on the performance of Oncopeptides’ share price during the period from the date of the 2018 AGM through May 31, 2021.

Other

In order to ensure the delivery of shares to participants in the company’s incentive program, as well as to cover social security costs in connection with exercise of options, share options and employee stock options, the Parent Company has issued warrants to the subsidiary Oncopeptides Incentive AB.