Remuneration

Remuneration to the board of directors

Remunerations to board members elected by the annual general meeting are resolved by the annual general meeting. At the annual general meeting on May 7, 2020 it was resolved that the total fees to Board members, including committee work, would be SEK 2,410,000 to be allocated as follows:

  • Fees to Chairman of the Board Wenche Rolfsen would total SEK 500,000 and fees to Deputy Chairman Ivar Verner would total SEK 300,000
  • For regular Board members not employed by the Company (i.e. five members excluding Lars Lannfelt) the fees would total SEK 250,000 each
  • Fees in the Audit Committee would total SEK 100,000 to the Chairman and SEK 60,000 to the other non-employed committee members
  • Fees in the Remuneration Committee would total SEK 60,000 to the Chairman and SEK 40,000 to the other non-employed committee members
  • No fees are paid to the Research Committee

For the financial year 2019 the board members received remuneration as set out in the table below. All amounts in kSEK.

Name Position

Basic salary/fee

Variable remuneration Pension

Total

Wenche Rolfsen Chairman

560

560

Lars Lannfelt 1 Board member

1,727

364

2,090

Pär Gellerfors Board member

364

364

Eugen Steiner Board member

329

329

Ivar Verner Board member

379

379

Hans Ekelund Board member

329

329

Mikael Smedeby Board member

229

229

Ewa Björling 2 Board member

146

146

Total remuneration and other benefits  

4,063

364

4,426

1) Lars Lannfelt is active in the company and is employed at 100% of full-time service. Lars is part of the management team but is reported in the Board of Directors only in the table above so as not to be double-counted.
2) Ewa Björling has been a Board member since May 9, 2019

Remuneration to the CEO and senior management

Senior management refers to the CEO and the management group, which consists of ten persons in total. The purpose of the guidelines concerning remuneration to senior executives is to provide BioArctic with the conditions for attracting, motivating and retaining competent managers. Remuneration is to be market-based and competitive and should reflect the performance and responsibilities of the individual as well as the company’s financial performance. At the same time, the remuneration should be in line with shareholder interests. Remuneration is to consist of fixed and variable salary, the customary employment benefits and market-based pension.

For the fiscal year 2019 the CEO and senior executives received remuneration as set out in the table below. All amounts in kSEK.

Name

Fixed salary/fees

Variable remuneration Pension Share-based
remuneration

Total

CEO Gunilla Osswald

2,725

3,218 967 82

6,993

Other senior executives (8 persons)1,2

10,481

3,472 2,754 115

16,822

Total remuneration and other benefits

13,206

6,691 3,721 197

23,815

1) Lars Lannfelt is active in the company and employed at 100% of full-time service. Lars is part of the management team but is reported in the Board of Directors only in the table above so as not to be double-counted.
2) This amount includes invoiced fees of kSEK 2,973.

In 2019, BioArctic’s CEO Gunilla Osswald received fixed compensation of SEK 210,000 per month. Gunilla Osswald furthermore had the right to pension provisions corresponding to 35 percent of the fixed compensation. The CEO is included in the variable remuneration programs covering all employees in the company. In addition, the CEO has the right to non-pensionable variable remuneration amounting to a maximum of 35 percent of the total annual compensation. The CEO also has a company car that is cost-neutral for the company. Between the company and the CEO, there is a notice period of 12 months by the company and 6 months by the CEO. Upon termination by the company, there is no work obligation during the notice period, but the CEO shall be available to the company as needed.

The fixed salary must be competitive and based on the individual’s competence, areas of responsibility and experience. The fixed salary must be reviewed annually. The division between fixed salary and variable remuneration must be in proportion to the executive’s responsibility and authority.

Variable salary may consist of bonuses to senior executives in the form of cash, shares and/or share-based instruments in BioArctic AB. Variable salary can be paid but should not exceed an amount corresponding to six months’ salary. The variable remuneration must be based on the outcome of predetermined and measurable criteria and designed to achieve greater communal interest between the executive and the company’s  shareholders. The maximum variable, non-pensionable remuneration to the CEO can be 35 percent of the total fixed annual remuneration, and the maximum remuneration to the company’s senior executives can be 25 percent of the total fixed annual remuneration.

Senior executives except the CEO receive normal market remuneration and individually negotiated premiums for service pension or alternately premiums under the terms of the company’s pension plan. All other employees receive market salaries, and premiums are allocated to the occupational pension in accordance with the terms of the company’s pension plan. All employees have a contractual mutual notice period of three months or alternately in accordance with the Employment Protection Act. Severance pay is not applied.

Incentive programs

BioArctic has two rewards programs linked to the clinical research program for drug candidates BAN2401 for Alzheimer’s disease with Eisai and ABBV-0805 for Parkinson’s disease with AbbVie. The reward program covers all permanent employees, including the CEO. Variable remuneration is paid when the company achieves certain goals linked to the clinical programs. Since the reward programs are linked to the clinical progress, the variable remuneration payments may occur irregularly in conjunction with the milestones being reached. One condition for receiving variable remuneration is that the employee has been permanently employed and that the employment has lasted for at least six months at the time when the milestone is reached and that the employee has not given notice at the time of the payment. The potential variable remuneration for the employee amounts to one month’s salary. The variable remuneration is not pensionable.

Share-based incentive programs

BioArctic has a long-term incentive program (the 2019/2028 program) in the form of an employee stock warrant program intended for the company’s senior executives, researchers and other staff. The program has a vesting period of 3–5 years. The purpose of the incentive program is to encourage broad share ownership among BioArctic’s employees, facilitate recruitment, retain skilled employees and increase employee motivation and fulfillment of targets. The program, which is intended for 41 employees in total, includes a total of 1,000,000 employee stock warrants. Of these, 480,000 warrants have been awarded. To facilitate the delivery of shares under the program, the 2019 AGM resolved on a private placement of 1,000,000 warrants. If the maximum number (i.e. 1,000,000 warrants) are utilized, the dilution will total 1.1 percent of the share capital and 0.5 percent of the voting rights in the company. The vesting period or alternatively the time from entering into the agreement until a share is acquired must not be less than three years.

The program extends over five years and six months from the point in time of allocation for the respective employees. The warrants grant participants the right to acquire 60 percent of the allocated share rights after three years, a further 20 percent after four years and the remaining 20 percent after five years, provided that the participant remains employed in the Group.