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 9, 2019 it was resolved that the remuneration for the current term should be kSEK 500 to the chairman of the board, kSEK 300 to the deputy chairman of the board and kSEK 250 to each of the other board members not employed by the company.

The annual general meeting further resolved that a remuneration of kSEK 60 is to be paid to the chairman of the remuneration committee and kSEK 40 to each of the members of the remuneration committee not employed by the Company and that a remuneration of kSEK 100 is to be paid to the chairman of the audit committee and kSEK 60 to each of the members of the audit committee not employed by the company.

For the financial year 2018 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 3 Chairman

543

543

Lars Lannfelt 1 Board member

1,984

151

2,135

Pär Gellerfors 2 Board member

1,169

208

1,377

Eugen Steiner Board member

300

300

Ivar Verner 3 Board member

319

319

Hans Ekelund 3 Board member

320

320

Mikael Smedeby 4 Board member

117

117

Total remuneration and other benefits  

4,752

359

5,111

1) Lars Lannfelt is active in the company and employed at a 100% duty rate. He is co-opted to the management team since September 1, 2018, but he is reported in the table above only in the board in order not to be counted twice.
2) Pär Gellerfors was active in the company with a 100% duty rate up to September 1, 2018, when he left his position. He is now only a board member.
3) Part of the board fee including social cost is invoiced until the Annual General Meeting 2018.
4) Mikael Smedeby is member of the board since May 15, 2018.

Remuneration to the CEO and senior management

Remuneration to senior management consists of basic salary/fee, variable remuneration, pension provisions and other benefits. For the fiscal year 2018 the CEO and senior executives received remuneration as set out in the table below. All amounts in kSEK.

Name

Basic salary/fee

Variable remuneration Pension

Total

CEO Gunilla Osswald

2,505

1,815 872

5,193

Other senior executives (7 persons)1,2

11,912

4,779 1,650

18,341

Total remuneration and other benefits

14,417

6,594 2,522

23,534

1) Lars Lannfelt is active in the company and employed at a 100% duty rate. He is co-opted to the management team since September 1, 2018, but he is reported in the tables above only in the board in order not to be counted twice.
2) This amount includes invoiced fees to the amount of kSEK 4,462.

CEO Gunilla Osswald received remuneration amounting to kSEK 2,505 as fixed annual salary and in addition 35 percent in pension provision. The CEO is covered by the incentive program covering all employees, see below. In 2018 the CEO had variable compensation up to 35 percent of the annual salary. Between the company and the CEO there is a termination 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.

Company management consists of 8 persons and one co-opted person. Senior executives except for the CEO receive normal market remuneration and individually negotiated premiums for occupational pension, or premiums under the terms of the company’s pension policy. All other employees receive market salaries and premiums are allocated to the occupational pension in accordance with the terms of the company’s pension policy. All employees have a contractual mutual termination period of three months, or according to the employment protection act. Severance pay is not applied. To the board members who are not employees of the company fees have been paid pursuant to the Annual General Meeting’s decision.

Incentive programs

BioArctic has two incentive programs, covering all permanent employees. One condition for receiving variable remuneration is that the employee has been employed for at least six months at the time when the goal is achieved that is the basis for payment of variable remuneration. The goals are linked to achieved milestone goals in the clinical research programs for the drug candidates BAN2401 for Alzheimer’s disease and BAN0805 for Parkinson’s
disease. The potential variable remuneration for the employee amounts to one monthly salary per milestone goal. The variable remuneration is not pensionable.

For 2018, in addition to variable remuneration to the CEO, the other senior executives have the possibility of variable remuneration amounting to 20 to 25 percent of the annual salary.

Share-based incentive programs and acquisition of shares by board members and senior executives

The Annual General Meeting 2019 approved the Board of Directors’ proposal for resolution concerning an employee warrant program for the Company’s management, researchers and other staff, on a directed issue of warrants and approved the transfer of warrants or shares in the Company to the participants in the employee warrant program. The employee warrant program 2019/2028 shall include not more than 1,000,000 warrants. To enable the Company’s delivery of shares under the employee warrant program 2019/2028, the AGM decided on a directed issue of a maximum of 1,000,000 warrants. The maximum dilution effect of the employee warrant program 2019/2028 is estimated to be a maximum of 1.1 percent of the share capital and 0.5 percent of the votes in the Company (calculated on the number of existing shares in the Company), provided full exercise of all employee warrants.

In 2017, the main owners Demban AB and Ackelsta AB issued call options to certain board members and senior executives in the company, including the CEO, concerning a total of 366,795 of the main owners’ B-shares in BioArctic. The exercise period (i.e. the period during which the option can be used) runs through June 30, 2020 according to the option agreement. The exercise price for the call options amounts to approximately SEK 26.67 per share. In connection with the issue of the call options the holders have paid an option premium, corresponding to the market value of the options according to the Black & Scholes model, to the main owners. The call options are freely negotiable. However, under the agreement the main owners have the right to repurchase the call options if the holder terminates his/her employment or assignment in the company during the duration of the call options.