Fees and allowances
Guidelines on remuneration to senior executives and board
Vicore shall offer remuneration in accordance with market practice which enables the recruitment and retention of internationally qualified senior executives. Remunerations within Vicore shall be based on principles of performance, competitiveness and fairness.
Senior executives refer to the CEO and the other members of the executive management. The guidelines shall apply to employment agreements concluded after the annual general meeting’s resolution to adopt these guidelines, as well as when changes are made to existing agreements thereafter. The remuneration to senior executives consist of fixed remuneration, variable remuneration, share and share-price related incentive programs, pension and other benefits. If local conditions justify variations in the remuneration principles, such variations may occur.
The fixed remuneration shall reflect the individual’s responsibility and experience level. The fixed remuneration shall be reviewed annually. Variable remuneration paid in cash may not exceed 40 % of the annual fixed remuneration for the CEO and may not exceed 30% of the annual fixed remuneration for other senior executives. Variable remunerations shall be connected to predetermined and measurable criteria, designed with the aim of promoting the company’s long-term value creation.
Share and share-price related incentive programs shall, if resolved on, be decided by the shareholders’ meeting. Pension shall, where possible, be premium-based. For the CEO and other senior executives, the premium may, in situations where premium-based pension is applicable amount to a maximum of 30% of the fixed salary. Notwithstanding the above, the board of directors is entitled to offer other solutions which, in terms of cost, are equivalent to the above.
Between the company and the CEO, the notice period shall be six months upon notice by the company. Upon notice by the CEO, the notice period is six months. For other senior executives, notice periods of 3-6 months apply. During the notice period, normal salaries shall be paid.
Senior executives may be awarded other customary benefits such as company health care etc. Such other benefits shall not constitute a substantial part of the total remuneration.
The board of directors is entitled to deviate from the guidelines if the board of directors, in a certain case, deems that there are good reasons for the deviation
Long Term Incentive Program 2018
The Extra General Meeting in Vicore Pharma Holding AB held on August 13, 2018, resolved, in accordance with the Board of Directors’ proposal, to adopt a long-term incentive program for certain of the company’s senior management and key persons (“Co-worker LTIP 2018”) and for certain members of the Board of Directors (“Board LTIP 2018”) in Vicore Pharma Holding AB. A maximum of 2,000,000 options (Co-worker LTIP 2018) or 475,000 share awards (Board LTIP 2018) may be allotted to participants under the program. The increase in the company’s share capital, assuming full utilization of both incentive programs, amounts to a maximum of approximately SEK 1,237,500, corresponding to a dilution of 5.5% of the total number of shares.
Co-worker LTIP 2018
Co-worker LTIP 2018 is an incentive program intended for members of senior management and key persons in the company. According to the program participants will be granted, free of charge, options (“Options”) subject to three year vesting that entitle to acquire a maximum of 2,000,000 shares in the company in total, in accordance with the terms stipulated below.
The Board of Directors of the company believes that an equity-based incentive program is a central part of an attractive and competitive remuneration package in order to attract, retain and motivate competent members of senior management and key persons in the company, and to focus the participants on delivering exceptional performance which contributes to value creation for all shareholders.
Co-worker LTIP 2018 will be accounted for in accordance with “IFRS 2 – Share?based payments”. IFRS 2 stipulates that the Options shall be expensed as personnel costs over the vesting period and will be accounted for directly against equity. Personnel costs in accordance with IFRS 2 do not affect the company’s cash flow. Social security costs will be expensed in the income statement according to UFR 7 during the vesting period.
As of Q4, 2018, a total of 300,000 options had been granted to the company’s senior management and key persons in accordance with Co-worker LTIP 2018.
Board LTIP 2018
Board LTIP 2018 is a program under which the participants will be granted, free of charge, share awards subject to performance vesting (“Share Awards”) that entitle to shares in the company to be calculated in accordance with the principles stipulated below, however a maximum of 475,000 shares. The Share Awards are subject to performance vesting based on the development of the company’s share price over the period from the date of 13 August, 2018, up to and including the date of the annual general meeting 2021.
Board LTIP 2018 is intended for members of the Board of Directors of the company independent from the main owners. The main owners believe that an equity-based incentive program is a central part of an attractive and competitive remuneration package in order to attract, retain and motivate internationally competent members of the Board of Directors of the company, and to focus the participants on delivering exceptional performance which contributes to value creation for all shareholders.
Board LTIP 2018 will be accounted for in accordance with “IFRS 2 – Share?based payments”. IFRS 2 stipulates that the Share Awards shall be expensed as personnel costs over the vesting period and will be accounted for directly against equity. Personnel costs in accordance with IFRS 2 do not affect the company’s cash flow. Social security costs will be expensed in the income statement according to UFR 7 during the vesting period.
On the Extra General Meeting of Vicore Pharma Holding AB that was held on August 13, 2018, it was resolved to allocate 475,000 share awards by issuing of 475,000 warrants.
Long Term Incentive Program 2016
On January 8, 2016, Vicore Pharma Holding AB issued 570,000 warrants to key employees and researchers. Each warrant entitles the holder to subscribe for one new share in Vicore Pharma at an exercise price of SEK 12. The exercise date is January 3, 2020.
The warrants were sold key employees and researchers on market terms at a price established on the basis of an estimated market value of the warrants using the Black & Scholes model. The value has been set at SEK 0.56 per warrant based on a share price of SEK 7.025 with a future annual increase of approximately 14 percent.
The increase in the company’s share capital in full exercise of the warrants will amount to SEK 285,000, which corresponds to a dilution of 1.3 percent of the total number of shares and of the total number of votes in the company.