Remuneration in Danish Large Cap Companies Benchmarking executive management and board remuneration
2013-2017 Brochure / report title goes here | Section title goes here
Contents
Introduction 3 Key findings 4 Current trends 5 Overview 13 Methodology 14 Total remuneration of executive directors 15 Base salary 20 Pension 23 Bonus 24 Long-term incentives (LTIs) 28 Board remuneration 38 Board demographics 40 How can Deloitte help? 44 Our contacts 45 Appendix 46
2 Remuneration in Danish Large Cap Companies | Introduction
Introduction
This report gives an overview of and insight into all report in accordance with International Financial remuneration of executive directors and boards of Reporting Standards (IFRS). Financial reporting on listed companies within the Danish Large-Cap Index1. remuneration of executives is more specifically In March 2018, the Danish Large-Cap Index comprised governed by IFRS 2 and the Danish Financial 39 companies, the names of which are listed in the Statements Act. Remuneration of executive directors appendix. These companies represent some of is required by IFRS to be disclosed on both fixed and the largest Danish companies from a wide range variable elements for executive management. Although of industries, from financial services to energy and reporting this level of detail for all individual members supplies. of management is not a requirement, it is however best practice guidance from the Committee on Corporate Over the year to March 2018, two new companies Governance2. Long-Term Incentive (LTI) programmes entered the Danish Large-Cap Index. In October 2017, must also be disclosed separately in their entirety, the professional cleaning product manufacturer Nilfisk which includes all participants, both executives and Holding entered the index through its IPO, while Alm. non-executives. Where applicable, we have compared Brand joined the index following OMX Nasdaq’s annual our findings with previous studies performed on the review in December 2017. One company, Nets, left the Danish market to put recent developments into a long- index as it delisted its shares in February 2018. term perspective.
Out of all companies in the Danish Large-Cap Index, 36 Disclaimer companies have financial year-ends as of 31 December, The aim of this report is to provide an overview of while three companies have financial year-ends of executive remuneration and the use of LTI in Danish either 31 August or 30 September. All companies have Large-Cap Companies. There may be very good published their 2017 annual reports during or before reasons for a particular company to lie inside and March 2018, with the exception of G4S at the time of outside of benchmarked ranges. This could be due to writing. As a result, G4S has been excluded from the differences in company size, industry, market volatility analyses in this report. The report is therefore based or other company-specific factors. When using our on the data from 38 companies. report we recommend that you consult your advisers on the interpretation of the data and its relevance to The analysis is based strictly on publicly available your particular circumstances. information obtained from annual reports, company websites, press releases, general meeting notes, This report does not constitute the provision of advice remuneration policies, etc. Not all companies report or service to any reader of this report, and hence their remuneration with the same level of detail. For Deloitte may not be named in a company’s public all the analysed benchmarks, we report the number documentation as having provided material assistance of companies for which the required data has been to the remuneration committee based solely on the reported with sufficient detail to be included in our use of the information provided in this report. analysis. The companies included in this analysis
1. Nasdaq OMX Copenhagen Large-Cap Index. The index was comprised of 42 share listings, of which three were listings of multiple share classes (39 individual companies) as of March 2018. Nasdaq OMX Copenhagen Large-Cap includes Danish listed companies with a market cap above EUR 1bn 2. https://corporategovernance.dk/recommendations-corporate-governance
3 Remuneration in Danish Large Cap Companies | Key findings
Key findings
•• Variable remuneration of executive directors Variable remuneration comprises c. 36% of total remuneration Variable pay: 36% as a share of total pay Fixed pay: 64% •• Variable remuneration, in the form of bonuses was unchanged in 2017 and long-term incentives, has increased 1. Variable vs fixed significantly since 2013 when it formed only 30% of total remuneration
•• Base salaries have increased significantly since 2013, but have slowed in 2017
2017 median annual CEOs: 4.3% •• Since 2013, CEOs, CFOs and other executive salary changes CFOs: -4.2% directors have experienced median base salary increases of 6.6% p.a., 0.6% p.a. and 7.7% p.a., 2. Base salaries respectively •• Increases for CFOs have been moderate over the same period due to a high CFO turnover
•• Median bonus payouts as a percentage of base salary increased from 25% in 2013 to Median bonus 2017: 35% 35% in 2017 as percentage of 2016: 40% base salary •• Median bonus allocations as a percentage of 3. Annual bonus base salary increased 20% and 37% for CEOs and CFOs respectively
•• Since 2013, share-based payments as a Median LTI allocation percentage of base salary have increased from 2017: 36% as percentage of 27% to 36% across all executive directors 2016: 34% base salary •• Performance and restricted share units are the most popular form of share-based payment, 4. Long-term while vesting criteria disclosure remains, on the incentives whole, poor
•• Average board member base pay was c. DKK 0.7m. Chairpersons and deputy chairpersons 1/3 of board received on average 3.0x and 1.9x base pay 2017 median board members pay of DKK 5.5m •• Median total board remuneration was DKK are women 0.2m higher in 2017 compared to 2016 5. Board pay •• There were no female chairpersons in 2017, and only 22% of deputy chairpersons were female
4 Remuneration in Danish Large Cap Companies | Current trends
Current trends
The Danish market environment This is a departure from current Danish practice where Danish management remuneration practices vary AGM voting resolutions are shaped by the Committee widely across companies. This is evident in the variety on Corporate Governance’s recommendation for a of different incentive vehicles in use (performance remuneration policy applicable to the board of directors shares, options, warrants, restricted shares and and the executive directors, and Section 139 of the share matching plans). Performance measures are Danish Companies Act. These require publication also similarly varied, reflecting the strategy and of guidelines for incentive-based compensation for requirements of individual companies. executive management and the board of directors, which This company-by-company approach is underpinned must be adopted at the company’s general meeting. by the best practice recommendations of the Committee on Corporate Governance, which are While the interpretation of the Shareholder Rights principle-based and mostly non-prescriptive (soft Directive into Danish law is pending, the direction law). The Danish model therefore contrasts to of travel in terms of future Danish disclosure is other countries where governance codes are more reasonably clear when remuneration disclosures are prescriptive and a conformity in incentive plan design examined alongside proxy advisers’ recommendations. prevails. Further, we note that the November 2017 changes to the Danish Recommendations on Corporate In terms of remuneration-related disclosure, however, Governance include, for the first time, a best practice there are large gaps between current Danish practice recommendation for the preparation of an annual and the requirements of the EU Shareholders Rights remuneration report. Directive. In brief, the European Commission proposed amendments to the Shareholder Rights Directive in Our 2017 benchmark study has shown that the trend April 2014. The Directive was agreed by the European of awarding executives a greater share of their overall Parliament, Council and Commission negotiators in pay package as variable remuneration in the form of December 2016 and was adopted in May 2017. Member share-based payments and short-term bonuses has States have until June 2019 to implement the Directive continued. In general, we have seen an increased (see separate section below on the EU Shareholder level of remuneration disclosure amongst companies, Rights Directive). which in large part is due to a combination of greater media and political attention as well as greater A key focus of the Directive is the separation of a engagement and pressure from shareholders and remuneration policy from an annual remuneration other bodies. We expect a continued and increased report. The former is subject to a binding vote at least focus on Environmental, Social and Governance (ESG) every four years, while the latter is subject to an annual issues by Danish institutional investors as we move advisory vote. However, Member States will determine forward into 2018 and beyond. Further, we expect the how this will apply and whether either or both are level of engagement between companies and their subject to a binding or advisory vote. The key intention stakeholders to increase in the coming years. of the Directive is that the policy effectively provides a ‘licence’ to pay management and the board, while Looking at disclosure of remuneration breakdowns the remuneration report provides shareholders with for CEOs, CFOs, Other Executive Directors and total guidance on how the policy was applied in the last executive boards in aggregate, we find that the level financial year. of disclosure varies by the position of the executive. While disclosure was relatively high amongst CEO remuneration, there is still room for improvement, particularly with regards to Other Executive Directors. For the 9 companies that did provide a split for at least some of their Other Executive Directors, it was typically only for one other senior executive (such as a chief operations officer) and not every other member >> .
5 Remuneration in Danish Large Cap Companies | Current trends
CEOs CFOs Other Exec Directors Total Exec Board Number % Number % Number % Number %
Split disclosed 30 79% 23 68% 10 30% 37 97%
Split not disclosed 8 21% 11 32% 14 42% 1 3%
Split provided for some n/a n/a n/a n/a 9 27% n/a n/a
Total 39 100% 34 100% 33 100% 38 100%
Source Deloitte analysis. Note: Totals may not sum due to rounding. Note: There are some companies with no executive CFO, no other executive directors or data is not clearly disclosed. We have also included both CEOs for GN Store Nord.
All Danish companies in our study, with the exception chart shows the year when a remuneration policy was of one, had a remuneration policy available online. We last formally adopted as disclosed on their website also looked at when these policies were last updated or (we have excluded draft policies which had not been amended to give an indication of how much attention adopted lle in sp lter 2018 as far as was disclosed on company lle sp lter lle sp lter the subject of remuneration is given. The following websites). sp lter sp lter sp lter
e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
It can be seen quite clearly that the majority (81%) of •• The introduction of caps on the value of equity .0 .1
DKKm 20 companies published their policy within the last couple awards at vesting. of years (in 2017 and 2016). There are a few instances .0 •• Shareholding guidelines for executive management. 0 of older policies, with one not having been updated e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 since 2008. •• Taking account of European rather than solely Danish 3.1 2.9 Bonu company practice when determining market pay 2.0 2.7 Emerging practices benchmarks. 201 There have also been some interesting additions to 1.0 companies’ remuneration policies for 2018. These •• Increases to long-term incentive limits. 2013 201 201 201 2017 0.0 include: •• Introduction or clarification of clawback provisions. 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile •• Post-vesting holding periods. ce ti e progr e t pes 201 6 e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s
30 P U Option arrant 201 R U Matching hare
20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
Ba e alary Pen ion Other Bonu LTI
20
esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
- - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile Remuneration in Danish Large Cap Companies | Current trends
These trends are also indicative of a broader European The ISS voting outcomes were as follows. perspective being applied to Danish remuneration policies and practices. We expect this trend to ISS Voting Board Fee Incentive continue. Recommendation Resolution Guidelines Resolution Proxy voting engagement We have examined the remuneration related voting For 92% 53% outcomes of the 25 largest Danish listed companies3. 4 We also reviewed a proxy adviser’s voting outcomes for ForX 0% 18% companies in the index. Against 8% 29%
Overview of findings Of the 25 companies’ annual general meeting Key themes disclosures reviewed, 23 made proposals in respect Only 2 companies received an “Against” of board remuneration and 17 included resolutions in recommendation in respect of board fee resolutions. relation to their incentive guidelines for executives. The issues cited here were fee quantum as well as the award of restricted stock units to board members. In terms of the incentive guidelines resolutions, of the 8 companies receiving an “Against” or “ForX” recommendation, we found 3 key themes, as summarised below:
OMX Copenhagen 25 Index: Approve Guidelines for Incentive-Based Compensation for Executive Management and Board
Key Themes Issues identified
• Introduction of restricted stock.
Long-term incentives • Increases to individual incentive limit.
• Cessation of a post vesting holding period for former employees.
• Discretion to exceed severance pay limits in undefined circumstances.
• Discretion to apply a retention or sign-on bonus of 100% of total remuneration.
• Discretionary awards for one-off bonuses for retention, recruitment retention, Board discretion transactions or severance.
• Discretion to apply uncapped sign-on remuneration awards.
• Discretion to apply 200% of salary severance awards, on top of existing 24 month notice period.
• Limited or no disclosure of performance conditions ex ante. Disclosure • Limited disclosure of bonus metrics ex post.
The above observations are consistent with a broader European trend of shareholder concern around the extent of Board discretion and a call for more detailed disclosure of performance measures in incentive plans, particularly long-term incentive plans where ex ante disclosure represents best practice. >>
3. Nasdaq OMX Copenhagen 25 Index 4. ForX refers to voting contentious for 7 Remuneration in Danish Large Cap Companies | Current trends
International trends Five years ago, the UK introduced new disclosure We believe that similar requirements and a stipulation for companies to hold a developments to those seen in the binding shareholder vote on their remuneration policy at least once every three years. These regulations have UK in recent years can be expected many similarities with the upcoming EU Shareholder in Danish Large-Cap Companies, Rights Directive, and as such, looking to the UK, may provide useful insights into future trends in the EU. as the revised Shareholder Rights Directive is implemented over the Since the new reporting regime has come into force, significant changes have occurred in the UK: coming years
•• The engagement between companies and their shareholders has increased significantly. The UK reporting requirements include the disclosure •• Remuneration structures have been simplified with of total remuneration earned in respect of the last the vast majority of companies using a single bonus year. This includes base salary and bonus payable for and a single long-term share plan. 10 years ago, over the year as well as the value of shares awarded where half of FTSE 100 companies were using more than the performance conditions have been assessed. This one form of long-term plan. This figure has now in turn has led to increased scrutiny on equity awards dropped to less than 20% and continued to decline and associated performance conditions. As equity in 2017. awards are typically expressed as a percentage of base salary, a number of companies received criticism •• The time horizon of long-term incentives has been when they did not scale back the size of their equity increasing with the majority of FTSE 100 companies awards following a significant reduction in share price requiring executives to hold shares for a period of two as shareholders and proxy advisers feel there is a risk years following the end of the performance period. of a windfall gain when the share price recovers. Other companies only cap the award and will consider the •• Nearly all FTSE 100 companies now have some appropriateness of the size of the award annually. mechanism to reduce unvested awards or reclaim incentives (clawback provisions). We believe that similar developments to those seen in the UK in recent years can be expected in Danish •• The level of shareholding requirement has also Large-Cap Companies, as the revised Shareholder significantly increased with a median requirement of Rights Directive is implemented over the coming 200% of base salary within the FTSE 100. years. The requirement that executive remuneration is disclosed for each executive director, and Besides structural changes, a notable change has been thereby increasing transparency, has the potential the disclosure of annual bonus targets. Only two or effect of driving up executive pay further, as direct three years ago, it was very uncommon for FTSE 100 benchmarking will be more easily accessible. companies to disclose bonus targets and achievements against these targets. This is now the norm. Amended recommendations for good corporate governance We also observe a continued trend towards the use In November 2017, the Danish Committee on of more customised performance measures, notably Corporate Governance released an amended set of in long-term incentive schemes. Whilst the majority recommendations for good corporate governance of companies were using total shareholder return 10 practice (soft law). The amendments include changes to years ago, now less than 10% use only one measure of most parts of the recommendations last published in performance and over half of companies use 3 or more 2013. Most notably, however, are the recommendations measures in their long-term incentive plans. on remuneration of management. Some of these
8 Remuneration in Danish Large Cap Companies | Current trends
recommendations are effectively pre-empting national Shareholder Rights Directive regulations, which will be implemented in response to The revised Shareholder Rights Directive5, adopted the adoptions of the EU Shareholder Rights Directive. in March 2017, may lead to significant changes across Europe. The European Commission will issue The committee’s recommendations include: standardised guidance for the implementation of the Directive within 15 months following the adoption of •• That companies prepare a remuneration report that the Directive. discloses information on the total remuneration granted to each member of the board of directors and the executive board, both by the company itself The Shareholder Rights Directive is an EU directive, and other associates in the group and associates for which was adopted in 2007, with the purpose of the last three years. Furthermore, information on setting out minimum rights and responsibilities for the most important aspects of company retention shareholders at company meetings held in the EU. and retirement/resignation policies be disclosed in Since the publication, there have been a number the annual report and that the linkage between the of revisions, the latest of which was in March 2017. remuneration of management and company strategy The Commission’s aim is to tackle corporate and other relevant related goals be explained. The governance shortcomings relating to listed remuneration report should be published on the companies and their boards, shareholders company’s website. (institutional investors and asset managers), intermediaries and proxy advisers (e.g. firms •• That the board of directors prepares a remuneration providing services to shareholders, notably voting policy for the board of directors and the executive advice) in line with long-term investment horizons. board, including: The European Commission will issue • a detailed description of the components of implementation guidance, after which member the remuneration for members of the board of states will to bring national laws and regulation directors and the executive board, into force. • the reasons for choosing the individual components of the remuneration, Timing • a description of the criteria on which the Member states have until June 2019 to bring national balance between the individual components of laws/regulations into force. remuneration is based, and Scope • an explanation of the connection between the remuneration policy and the company’s long- •• Companies with a registered office in a member term value creation and relevant related goals. state and listed on a regulated market situated or •• The remuneration policy should be approved by the operating within a member state. general meeting and published on the company’s website at least every fourth year and upon any •• Directors (executives as well as non-executives): critical amendments. any member of the administrative, management or supervisory bodies of a company. Member states To date, only a small number of listed Danish can also opt to include individuals who perform companies prepare a stand-alone remuneration similar functions. The chief executive and deputy report. Instead, many companies disclose details of chief executive (if applicable) are both considered board and executive remuneration within the annual directors, irrespective of their membership of the report, although the level of detail varies from company board. >> to company. Moreover, not all companies report executive pay on an individual basis.
5. http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P8-TA-2017-0067&language=EN&ring=A8-2015-0158 9 Remuneration in Danish Large Cap Companies | Current trends
Note: It is yet to be seen how definition of Directors will •• Where the vote is advisory, and a new policy is not be interpreted in a Danish market context, however approved by the shareholders, the company must our initial assessment is that this will (at least) include submit a revised policy to a vote at the next general the CEO and the CFO and most likely will follow the meeting. Danish definition of “Direktionen” in accordance with the Danish Companies Act. This has also been included Member states may allow companies to deviate in the Danish Recommendations on Corporate from specific elements of the remuneration policy in Governance as updated in November 2017. exceptional circumstances. The policy must specify the elements of executive remuneration, which may Remuneration policy be deviated from. Exceptional circumstances must be Companies will be required to establish a remuneration considered to be necessary to serve the long-term policy for directors, which shareholders will have the interests and sustainability of the company as a whole, right to vote on at the general meeting. Member states or to assure its viability. will decide whether this vote should be binding or advisory. Irrespective of whether the vote is binding The policy must be put to a vote at every material or advisory, companies can only pay remuneration to change and at least every four years. directors in accordance with the remuneration policy lle sp lter lle sp lter lle sp lter submitted to a general meeting. The policy must be clear, understandable and set out: sp lter sp lter sp lter •• Where the vote is binding and a new policy fails to •• How the policy, and also specifically each component gain approval, the company must continue to pay of variable remuneration, contributes to business in accordance with the previously approved policy strategy and the long-term interest and sustainability and submit a revised policy for approval at the next of the company. ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge o se s l r le t right meeting. 12.2 7 11. 11. 1.2 1 10. 7 3 1.0
7.2 .9 . 3 .2 33 3 0. 27 27 .0 cto er u e u e 2 .0 3.9 Publication in the Propo al of law with 3. Implementation period 1 m 1 3.1 Official Journal of the preceding con ultation 1 13 K 0. 1.9 2.1 K European Union D
2013 201 201 201 2017 2013 201 201 201 2017 0.
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 0.2 2017 2018 2019 /
- Chair Deputy chair Other member
s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right Male emale u e epte er u e Effective date (20 days after The European Commi ion Effective in Denmark 7 . publication in the Official adopt implementing act at the late t 2 . ournal of the European at the late t 1 month month after Union after effective date) effective date) . .1 0 3.
37 2.9 30 32 2 2 2.2 2.2 2 2.0 1. 22 1. 10 20 2 1 1.1 0.9 0.
0 0.0 20 2013 201 201 201 2017 2013 201 201 201 2017
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 1
umber of Member 10
s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right
91 3.7 0 3 0 2 0 2 0 2 70 72 7 7
2.7 Age
7 2.3 1 2.0 1.
3 1. 30 31 1.3 29 1.1 2 1.1 1.0 1 0. 0. 13 13 0. 10 12 0. 100
1 0.1 90 2013 201 201 201 2017 2013 201 201 201 2017 0 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 70
0
0
0
30 umber of Member
20
10 i u lloc tio s perce t ge o se s l r 0 3 0 2 0 2 0 2 70 72 7 7 00 Age
Male emale 3 0 CEO average
300 Other executive board member average 3
2 0
200
1 0
100 Other 1 9
0 inni h 2 erman 3 0 Iri h 2
rench 3
orwegian
American
Dani h
wedi h
ggreg te o r re u er tio Briti h 7.1 . 7.0 . .7 .1 .9 . . .3 .0 .2 201 . .0 .1 3. 201
DKKm 201
2017
Average 2 th percentile Median 7 th percentile 1. 0
1. 0
e u er tio o ch irperso s 1. 0 1. 1.9 1.20 1. 1. 1. 1. 1. 1. 1. 1.00 1.3 1.3 1.3 201
DKKm 0. 0 1.0 201 0.9 0.9 0. 0. 0
DKKm 201 2017 0. 0
0.20
- Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile chairper on chairper on chairper on
3.0
2. 1
2.0 1
12 1.
DKKm 10
1.0 umber of Board 0.
2 0.0 0 1 2 3 7 9 10 11 12 13 1 1 1 column repre ent 1 chairper on umber of board member
Bo r e ers tot l h irperso s eput ch irperso s
Male emale Remuneration in Danish Large Cap Companies | Current trends
•• The different components of fixed (including benefits Remuneration report in whatever form) and variable remuneration which Companies will be required to draw up a clear and can be awarded to directors and indicate their understandable report on remuneration awarded or relative proportion. due over the last financial year to individual directors, which will be subject to an advisory vote at the annual •• How the pay and conditions for employees of the general meeting. company were taken into account when setting the remuneration policy. Member states may allow small and medium-sized companies to submit the report for a discussion at the •• For awards of variable remuneration, set clear, annual general meeting, rather than an advisory vote. comprehensive and varied criteria for the award of variable remuneration (including an indication of The report should contain the following information on financial and non-financial criteria including, where each individual director’s remuneration: appropriate, criteria related to corporate social responsibility) and the methods applied to determine •• Total remuneration split by component the extent that performance conditions have been achieved. •• The relative proportion of fixed and variable remuneration •• The conditions for the company to reclaim variable remuneration as well as any deferral periods •• An explanation of how total remuneration complies applicable to variable remuneration. with the adopted policy, including how it contributes to the long-term performance of the company •• Where share-based remuneration is awarded, specify vesting periods and, where applicable, retention of •• Information on how the performance criteria were shares after vesting. applied
•• The duration of directors’ contracts and their notice •• A comparison of the annual change in remuneration periods, the main characteristics of supplementary over the last five years against the evolution of pension or early retirement schemes, the terms company performance and the average remuneration applicable in instances of termination, including any of employees other than directors (which is to be payment linked to termination. calculated on a full-time equivalent basis)
•• The decision-making process followed for the •• The number of shares/options granted and any determination, review and implementation of the applicable performance conditions policy, including measures to avoid or manage conflicts of interest and, where applicable, the role of •• The use of the possibility to reclaim variable the remuneration committee or other committees remuneration concerned. •• An explanation of any deviation from the policy in Where the policy is revised, companies should describe exceptional circumstances and the indication of the and explain all significant changes and how it takes into specific elements of remuneration concerned. account the votes and views of shareholders on the policy and reports since the last vote. The European Commission will adopt guidelines to specify a standardised presentation of this The policy, together with the date and the results of the information. The report must be publicly available vote, must be publicly disclosed online for as long as it online for 10 years after publication. Companies must is applicable. explain in the next remuneration report how the vote (or, where applicable, discussion) at last year’s meeting has been taken into account.
11 Brochure / report title goes here | Section title goes here
The purpose of incentive programmes is to align the interests of executive management with those of the shareholders and to ensure that management works towards achieving goals that are aligned with the company strategy
12 Remuneration in Danish Large Cap Companies | Overview
Overview
Remuneration of executive directors can generally be Variable salary types divided into fixed and variable remuneration. Fixed Variable remuneration can be either short-term elements include base salary, pension and other or long-term. Short-term incentives typically refer remunerations (car, phone, housing benefits, etc.) to bonus arrangements that are settled within whereas variable elements typically include short- the financial year of the company, while long-term term bonus and long-term incentives (LTIs). Typically, incentives apply to arrangements that apply over a bonuses are one-year cash-based considerations, period greater than a single financial year. Below is a while LTIs are longer than one year and may include non-exhaustive overview of different types of LTIs. either cash or share-based pay (shares or options/ warrants). The purpose of incentive programmes is to align the interests of executive management with those of the In general, fixed elements of remuneration are shareholders and to ensure that management works aimed at remunerating executive management for towards achieving goals that are aligned with the expected performance, while the purpose of variable company strategy. elements is to incentivise extraordinary or exceptional performance. Consequently, variable elements are The goals of incentive programmes are typically one typically linked to a number of key performance or more individual or companywide financial and indicators (KPIs) or benchmarks, which must be non-financial KPIs, which can be evaluated on an achieved before variable remuneration is payable. absolute or a relative basis. Examples are relative total shareholder return, absolute EBITDA performance of a division and companywide customer service KPIs. Remuneration components
Fixed elements Variable elements
Share-based Base salary Pension Other Bonus remuneration
Incentive programmes Programme Description
Employee shares Via a monthly salary reduction the employee may save up to buy shares - typically at a discount
The employee buys shares at market value which will be matched by a certain ratio after a number Matching shares of years, in case the employee has not sold his/her shares or left the company
Performance share unit The employee is granted free shares, which may not be transferred or exercised until certain and restricted stock units conditions are met - for example financial goals or ongoing employment
The employee is granted the right to buy existing company shares in the future at a price Share-based options determined in advance
The employee is granted the right to buy newly issued company shares in the future at a price Share-based warrants determined in advance
13 Remuneration in Danish Large Cap Companies | Methodology
Methodology
Data observation in this analysis. In some cases where The analysis in this report is based on the executive companies have more than one effective CEO we apply remuneration of companies included in the Danish all CEOs as observations. Large-Cap Index as of March 2018. Data is based strictly on publicly available information obtained When analysing base salary, all companies where from annual reports, company websites, press a breakdown of remuneration was disclosed for releases, AGM minutes, remuneration policies, etc. individual executive directors for all five years have Not all companies report their remuneration with the been included. This includes 22, 15 and 10 individuals same level of detail, and the number of companies or for the CEO, CFO and Other Executive Directors executives that are included will vary from one analysis categories, respectively. However, for some companies, to the other. pension is included in the base salary and for others it is not clear whether the pension is a part of the Remuneration analysis reported base salary. For this analysis, one executive The analysis of base salary includes only those director is counted as one observation. individual executive directors where remuneration for the full financial year was provided in the annual report We apply individuals as observations for the pension or where it was possible to reasonably pro rata adjust analysis. If a split is not available for an individual, we any part-year salary information. apply data for pension remuneration of the executive board as a whole. This leaves 93 observations, As not all companies in our analysis have the same although for 40 of these observations, a pension does financial year-ends, we have simply used the latest not form a part of the remuneration. four financial periods that have been published. Our analysis therefore attempts to reflect, as accurately as For analysis of LTI programmes, we apply each possible, the salary levels effective during the financial programme as one observation. This means that all years from 2013 to 2017. We have not applied any individual programmes of the companies have been ageing factor to the disclosed salaries. included. For the LTI analysis, we exclude cash bonus schemes, leaving 54 programmes. We have categorised main executive management positions into three main groups – the top full-time For the analysis of board salaries, we count each executive (CEO), the finance director (CFO) and other company as an observation. Only one company executive directors (Other Executive Directors). In does not disclose total board remuneration for all some companies, the only executive management are of the last four years, leaving 37 observations. 32 the CEO and the CFO, and hence not all companies are companies disclose salaries of the chairperson for all represented in all analyses. It is also worth noting that of the last four years, while 22 companies provide a in some companies where an executive director has full breakdown of the remuneration of each individual left during the year, the details of the new incumbent board member. are not yet known at the time of reporting, or are not disclosed. This means that there will not always be a Statistics top full-time executive or finance director for every Throughout the report, data is presented by using the company. following statistics:
•• Upper quartile – separates the top 25% of a sample For the analysis of total remuneration, bonuses from the bottom 75% and LTIs, all companies where a split was provided for the remuneration of the total executive board •• Median – the middle point of a sample or individuals for all five years have been included, leaving 29, 22, 15 and 8 companies for all executive •• Lower quartile – separates the bottom 25% of a directors, CEOs, CFOs and Other Executive Directors, sample from the top 75% respectively. We count each company as one •• Average – the arithmetic mean of a sample
14 Remuneration in Danish Large Cap Companies | Total remuneration of executive directors
Total remuneration of executive directors
Total remuneration lle sp lter lle sp lter lle sp lter According to IFRS, executive remuneration must be disclosed in a company’s annual report. The level sp lterCompanies disclosing a remuneration sp lter sp lter of detail that companies disclose varies, with some breakdown for: e u er tio companies disclosing reports remuneration for each executive director, while others disclose remuneration only The total executive board 37 of 38 97% for the group of executive directors as a whole. 19 20 Remuneration is typically disclosed on the different CEOs 31 of 39 79% Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 types of pay (base salary, pension, bonus and LTI), but 1 CFOs 23 of 34 68% ther ecuti e irectors se s l ries le t or perce tiles or to right for a small number of companies remuneration is only 1 0 1 disclosed at a total level. Below we highlight the level All individual executive directors 10 of 33 30% r
e 12 10 1 0
of b executive compensation detail disclosed across 10.0
m 10 different groups in 2017: . u .
120 the split between fixed and variable pay has remained 9.0 .1 Below we show the composition of remuneration of relatively steady; in 2017, variable pay accounted for .9 .9 100 executive directors for the last four years. Around2 1% more compared to 2014. Average base salary of2 .0 1 1 1 1 . 54% of 2 executive directors’0 remuneration0 consisted executive0 directors also increased considerably during 0
.3 LTI of base - salary in 2017, while variable pay (bonus and this period (see below), while bonus and LTI payments 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 LTI) comprised around 36%. During the last four years, increased even more. >> . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0
2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Source: Deloitte analysis Other Executive Director . Average 20.1 Note: Companies that did not disclose executive management remuneration split have been excluded. Only companies for which executive director remuneration was disclosed in each of the last four years have been included. This includes 31 companies. Executive roup . Average 13.1 0 s
30 P U Option arrant 201 R U Matching hare 15
20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
Ba e alary Pen ion Other Bonu LTI
20
esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
- - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports lle sp lter lle sp lter lle sp lter
19 20 sp lter sp lter sp lter Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 e u er tio 1 reports ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1
r 19
e 2012 10 1 0 b 10.0 Bonus and LTI as a percentage of fixed remuneration (all executive directors)
m 1 10 . u ther ecuti e irectors se s l ries le t or perce tiles or to right . 1 120 9.0 .1 1 0 1 .9 .9
r 100
e 12 2 10 2 .0 1 0 b 1 1 1 1 10.0 .
m 10 2 0 0 0 . 0 u . .3 LTI
- 7.0 120 200 2009 2010 2011 2012 2013 201 201 201 2017 201 9.0 .1 . 0 .9 .0 .9 100 2 2 .0 . 1 1 1 1 . 0 2 0 0 0 .0 0 .1 .3 LTI - 7.0
DKKm 20 200 2009 2010 2011 2012 2013 201 201 201 2017 201 .0 . 0 .0 0 . 0 e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 .0 3.1 .1 2.9
DKKm 20 Bonu 2.0 2.7 .0 Remuneration201 in Danish Large Cap Companies | Total remuneration of executive directors 0 1.0 e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2013 201 2.9 201 201 2017 0.0 Bonu 201 2.0 2.7 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile 201 1.0 ce ti e progr e t pes 2013 201 201 201 2017 201 0.0 201 e sio co tri utio One column s perce t ge repre ent one o Other se Executive s l r Director i 2 th percentile Median 7 th percentile 2017 ce ti e progr e t pes 201 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 . e sio co tri utio s perce t ge o se s l r i C O . Average 21.0 2017 The figure below shows that CEOs received between general has been relatively stable in recent years, 0 0 Other Executive Director . Average 20.1 35% and 40% of their remuneration inBa e the alaryform of Pen ion havingOther increasedBonu moreLTI significantly between 2014 and CEO . Average 2 . variable pay between 2014 and 2017. Like executive 2015. Executive roup . Average 13.1 directors in general, CEOs’ variable remuneration in C O . Average 21.0 0 0 Other Executive Director . Average 20.1 s Executive roup . Average 13.1 30 P U Option arrant 0 201 R U Matching hare s 20 201 30 P U Option arrant 201 R U Matching hare
201 10 20 201
esti g criteri 2017 0 201 10 One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Source: Deloitte analysis 2017 esti g criteri Note: Companies that did not disclose their CEO’s remuneration split have been excluded. Only companies for which CEO remuneration 0 Other non-financial KPIs 7 was disclosed in each of the last four years have been included. Further, we apply both CEOs for GN Store Nord. This includes 22 Bo us p out s perce t ge o se s l r i One column repre ent one executive director T R hare price 1 companies and 23 observations. Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3 EP 7 EBITDA EBIT 120 11 Revenue 11 A similar analysis for CFOs reveals that variable pay we saw a noticeable fall in the proportion of pay in the CEO . Average 3. Other non-financial KPIs 7 Cash flow Bo us p out s perce t ge o se s l r i made s up 38% of their total pay package in 2017, which form of variable remuneration in 2016, although this T R hare price 1 is 2% lower compared to 2014 when variable pay appears to have reversed somewhat in 2017. C O . Average 7.1 Individual EP 7 100 Cu tomer ervice KPI accounted for 40% of total remuneration. Moreover, 120 - 201 Other Executive Director . Average 3 .1 Revenue 11 CEO . Average 3. Undi clo ed 9 Cash flow s Executive roup . Average .2 Unknown 1 C O . Average 7.1 Individual 0 one 20 201 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 201 0 0 one 201 20
2017 0 201 0 Ba e alary Pen ion Other Bonu LTI
2017 20 0
Ba e alary Pen ion Other Bonu LTI esti g ur tio o progr es Source: Deloitte analysis 0 20 Note: Companies that did not disclose their CFO’s remuneration split have been excluded. Only companies for which CFO remuneration ri le p 1 column repre ent 1 executive director was disclosed in each of the last four years have been included. This includes 16 companies.
esti g ur tio o progr es 16 0 0 39 0 39 3 3 3 1 column repre ent 1 executive director Ve ting period average 2.9 year ri le p 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 0 30 0 7 39 32 39 3 3 10. 10.3 10.0 31 3 Ve ting period average 2.9 year 30 30 9.1 2 3 ll e ecuti e 7 irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 29 37 0 0 3 37 Programme expiry average .0 year 3 .1 13.1 .2 .3 .0 2030 7 2 32 2 .0 10. 19 10.3 3.7 10.03. 31 19 3.0 30 30 1 1 9.1 2. 1 2
7 1.7 umber of programme 29 0 0 37 2013 201 201 201 2017 3 .1 .2 .3 2013 201 201 201 2017 2013 201 201 .0201 2017 1020 2 2 .0 19 3.7 3. 19 3.0 CEO C O Other 1 1 2. 1 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10 - - 1 2 3 7 9
CEO C O Other umber of year s e elop e t2 th percentile i o us Medianp out s perce t ge7 th percentile o se s l r le t 2 th percentile right Median 7 th percentile igure o positio o tot l re u er tio 2 - - 1 2 3 7 9 .7 . . 7 7 umber of year s e elop e t i o us p out s perce t ge o se s l r le t right 7 . igure o positio o tot l re u er tio U 9 re sur sh res u its s perce t ge o outst i g sh res 2 3 3. 3. 39 2.9 .7 . 2. . 30 2 7 7 2. 2.0 1. UK 7 1 . 1 1.1 0.9 U 9 10 11 0.9 re sur sh res u its s perce t ge o outst i g sh res 3 0. 3. 3. 7 39 2.9 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 2. 201 2017 Continental 30 2 2. LTI out tanding average 1. 2.0 Europe 1. UK 1 1 1.1 0.9 2 th percentile 10 Median 7 th11 percentile 2 th percentile0.9 Median 7 th percentile 0. 7 Trea ury hare average 2. Denmark 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
ixed alary Other Bonu LTI 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile s e elop e t i o us p out s perce t ge o se s l r le t right 3 Denmark 3.2 3.0 7 2. 2 ixed alary Other Bonu LTI 2. 1 2.3 2.1 se s l ries le t perce tiles or to right s 7 e elop e t i o us p out s perce t ge o se s l r le t right 1 3 3.2 3.0 37 3 7 1. 1. 1. 2. 30 1.3 0 2 1 .0 21 22 2. 1.0 1 2.30.9 se s l ries le t perce tiles or to right 9. 1 0.7 2.1 7 13 0. 0. 1 9. 11 9.3 12.0 37 3 1. 1. 1. 30 1.3 0 2013 201 201 201 2017 2013 201 201 201 2017 1 .0 .7 21 22 0.9 1.0 10.0 . 0.7 .29. 1 9. 13 0. 0. 2 th percentile Median 7 th11 percentile 2 th percentile Median 7 th percentile 12.0 9.3 7.9 .0 2013 201 201 201 2017 2013 201 201 201 2017 .7 7.0 10.0 . .9 .2 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile . 7.9
.0 . 0.3 7.0 . 0.3 .0 .9 0.33 .2 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 . .7 2.0 . 0.2 0.3 . 0.2 0.3 .0 0.33 2013 201 .2 201 201 2017 0.0 0.19 .7 2 th percentile Median 7 th percentile 2.0 One column repre ent one CEO i u o us lloc tio s perce t ge o se s l r 0.2 0.17 0.2 2013 201 201 201 2017 0.12 0.0 300 0.10 0.09 0.19 se s l ries One le t column repre ent perce tiles one orCEO to right 2 th percentile Median 7 th percentile 0.17 i u o us lloc tio s perce t ge o se s l r 0.0 0.0 0.0 0.03 CEO average 7 0.12 0.03 .0 .1 .0 .0 2 0 300 0.10 0.09 Other executive board member average 79 se s l ries le t perce tiles or to right 2013 201 201 201 2017 7.0 0.0 0.0 0.0 0.03 2 th percentile Median 7 th percentile . 0.03 .1 CEO average 7 .0 200 .0 .3 .0 2 0 .0 Other executive board member average 79 2013 201 201 201 2017 7.0 .0 . . 2 th percentile Median 7 th percentile . . 1 0 . .3 200 .0 .0 .3 DKKm . .0 .0 3.0 3.9 100 3.9 . . 1 0 . .0 3.7 2.0 .3 DKKm 3.3 .0 0 3.0 3.9 100 1.0 3.9
3.7 2.0 2013 201 201 201 2017 0.0 3.3 0 One column repre ent C O 2 th percentile Median 7 th percentile 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0
2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s
30 P U Option arrant 201 R U Matching hare
20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s Remuneration in Danish Large Cap Companies | Total remuneration of executive directors C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
By comparing the development of variableBa e alary pay over Pen ion Interestingly,Other Bonu we saw CFOLTI variable remuneration fall time for CEOs, CFOs and Other Executive Directors, we in 2016, but in 2017, it appears that the proportion observe that, historically, CFOs have received a higher of variable remuneration in executive director pay 20 proportion of their total remuneration as variable pay packages has converged so that the three groups of compared to CEOs and Other Executive Directors. directors receive a similar proportion. esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
Source: Deloitte analysis Note: The samples of CEOs, CFOs and Other are not the same size, since we have excluded companies that did not disclose individual - - 1 2 3 7 9 remuneration for 2013-2017, leaving 22, 15 and 8 companies for CEOs, CFOs and Other Executive Directors, respectively. Further, we apply both CEOs for GN Store Nord. umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio Comparison with previous studies Danish CEOs compared with the US and the UK, where 2 6 Bechmann & Nielsen (2012) compares the base salary is only 29% and 46% of total remuneration, .7 . . composition of remuneration for CEOs in Danish listed respectively. 7 7 companies with similar studies from other countries. 7 . U 9 re sur sh res u its s perce t ge o outst i g sh res The figure below illustrates the results divided into These results, which are based on data available 3 3. 3. four categories (“Fixed salary”, “Other”, “Bonus” and in the 2010 annual reports, are consistent with the 39 2.9 2. 30 2 2. “LTI”). The results indicate that base salary constitutes findings of our study, which show that remuneration 2.0 1. a relativelyUK large share of 62% of total remuneration for of Danish executives in 2013 consisted mainly of a 1 1 1.1 0.9 base salary (62%). >> 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 6. Bechmann, K. L. og K. T. Nielsen (2012): ”Fremtidens ledelsesaflønning – hvad siger selskabernes overordnede 3.2 3.0 retningslinjer for incitamentsaflønning?”, Finans/Invest 4, p. 12-19 7 2. 2 17 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0
2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s
30 P U Option arrant 201 R U Matching hare
20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
Ba e alary Pen ion Other Bonu LTI
20
esti g ur tio o progr es Remuneration in Danish Large Cap Companies | Total remuneration of executive directors 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme However, as already mentioned, our study indicates Having established an overview of the components of 2013 201 201 201 2017 that base salary’s relative share of total remuneration the executive remuneration package, we now take a 2013 201 201 201 2017 2013 201 201 201 2017 10 decreased between 2014 and 2017. This indicates an closer look at the different parts of the remuneration, increasing alignment of the remunerationCEO policies of C Oone by one. Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Danish companies with the remuneration policies in the US, the UK and Continental Europe. We expect this - development to continue in the coming years. - 1 2 3 7 9 umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 Source: The results for the US, the UK and Continental Europe are from Conyen et al. (2011) and are based on information on 3.0 7 remuneration in annual reports. The results for other pay in Denmark are from Bechmann (2011c) and are from an analysis of 39 listed 2. 2 companies in Denmark, with information based on the remuneration disclosed in annual reports. “Fixed salary”, “Bonus” and “LTI” for 2. Denmark are based on an average for 114 listed companies (94 with incentive-based payment and 20 without). 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 18 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile We expect that, over the coming years, the remuneration characteristics of Danish executive management will become more aligned with international practices, such those applied in the UK and Continental Europe lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0
2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s
30 P U Option arrant 201 R U Matching hare
20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
Ba e alary Pen ion Other Bonu LTI
20
esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
Remuneration in Danish Large Cap Companies | Base salary - - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . BaseU salary 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. When looking at base salary, we have divided the In 2017, CEO base salary ranged between DKK 3.7m Europe observations into three groups: CEOs, CFOs and Other and DKK 12.0m, with the CEO of Carlsberg receiving Executive Directors. For CEOs, the distribution of the highest base salary. The median base salary has 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile base salary in 2017 is depicted below, along with the increased in each of the last four years, most recently Denmark development of the 25th, the median (50th percentile) at DKK 8.2m in 2017. This corresponds to an increase of and the 75th percentiles during the last five years. c. 7% p.a. from 2013 to 2017. Median CEO base salaries ixed alary OtherincreasedBonu by 4.3% LTIin 2017 compared to 2016. s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12 Source: Deloitte analysis 300 Note: The graph to the left represents the 31 CEOs where base salary was disclosed in 2017, whereas the graph to the right 0.10 0.09 represents se the s l ries 22 CEOs where le t base salary wasperce tiles disclosed in or all five years. to For GN right Store Nord, both CEOs have been included. 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 20 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0
2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s
30 P U Option arrant 201 R U Matching hare
20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
Ba e alary Pen ion Other Bonu LTI
20
esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
- - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1 Remuneration in Danish Large Cap Companies | Base salary 37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 The median CFO base salary was DKK 4.6m in 2017, of 2.3% and 0.9% p.a., respectively since 2013. . When 0.3 .0 0.33 having fallen by c. 8% in the most recent year alone. As looking at CFO turnover we have .2 generally seen that a result, median CFO base salaries were the same in companies that replaced their CFOs over the past .7 2017 2.0as they were in 2013. However, salaries at both few years have initially paid the successor a lower 0.2 the 25th and 75th percentiles have shown an increase base salary. >> 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile
Source: Deloitte analysis Note: The graph to the left represents the 23 CFOs where base salary was disclosed in 2017, whereas the graph to the right represents the 15 CFOs where base salary was disclosed in all five years.
21 Remuneration in Danish Large Cap Companies | Base salary
lle sp lter For Other Executive Directors, the median base salary lle sp lter lle sp lter was DKK 5.5m, which is higher than that of CFOs. This is sp lter partly due to some roles, such as deputy CEOs, interim sp lter sp lter CEOs or other executive officers, receiving higher e u er tio reports remuneration than the CFO.
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0
2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201 Source: Deloitte analysis e sio Note: The co tri utio graph to the left srepresents perce t ge the 30 Other o se Executive s l r Directors i where base salary was disclosed in 2017, whereas the graph to the right represents the 10 Other Executive Directors where base salary was disclosed over the last five years. 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s
30 P U Option arrant 201 R U Matching hare
22 20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
Ba e alary Pen ion Other Bonu LTI
20
esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
- - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u Remuneration in Danish Large Cap . Companies | Pension
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . Pension 0 .0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7 In order to benchmark executive pensions we direct pension contribution in 2017. Among those 201 measure1.0 pension contributions as a percentage of who did, there was a large dispersion, with pension annual salary. Pension contributions for 2017 are contributions ranging between 3% and 52% of base 2013 201 201 201 2017 depicted0.0 below for all disclosed executive directors. salary. Furthermore, it appears that CEOs received 201 38 of the 86 executiveOne columndirectors repre ent (where one individual Other Executive Directorhigher pension contributions2 th percentile than CFOs and MedianOther 7 th percentile pension compensation was disclosed) received no Executive Directors, on average. >> ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s
30 P U Option arrant 201 R U Matching hare
20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
Source: Deloitte analysis EBITDA EBIT 11 Note: All individual executive directors with disclosed pension and base salary have been included in the chart split into three categories: CEO (15 observations), CFO Other non-financial KPIs (12 observations) and Other Executive Directors (22 observations). Companies that only disclosed salary and pension for the management group as a whole, have 7 Bo us p out s perce t ge o se s l r i been included in the Group category (four observations). All companies disclosed individual and/or overall executive management remuneration in 2017 (there were T R hare price 1 16 companies that did not include a pension as part of their executive management’s overall compensation package). EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 In 2016, the average pension contribution for CEOs, Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 CFOs, Other Executive Directors and Groups was Undi clo ed 9 21%, 19%, 21% and 15%, respectively Executive roup . Average .2 Unknown 1 0 one 201 20
201 0 23
2017 0
Ba e alary Pen ion Other Bonu LTI
20
esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
- - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0
2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Remuneration in Danish Large Cap Companies | Bonus Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s
30 P U Option arrant 201 Bonus R U Matching hare
20 201
201 Below10 we present the actual payout of short-term considerably and was observed between 4% and 108% bonus as a percentage of annual salary. 20 of the of base salary. Similar to last year, we observe that 81 executive directors (where individual bonus CEOs received the largest average bonus payments, esti g criteri 2017 payments0 were disclosed) received no direct bonus compared to CFOs and Other Executive Directors. in 2017. As can be seen from the figure below, for One column repre ent one executive director those who did receive a bonus in 2017, payout varied Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
Ba e alary Pen ion Other Bonu LTI
20
esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
Source: Deloitte analysis 0 Note: All individual executive directors with disclosed short-term bonus and base salary have been included in the CEO (21), CFO (18) and Other Executive 0 39 39 3 3 Directors (18) categories. Companies that only disclosed salary and pension for the management group as a whole have been included in the Group 3 category (six). Companies that did not disclose individual or overall executive management salary split have been excluded. 36 companies have been Ve ting period average 2.9 year 3 included ll e ecuti e in 2017. irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 Looking at the development from 2013 to 2017, median nominal amounts, the median bonus payout increased 10. 10.3 10.0 31 bonus payout across all executive directors increased from DKK 1.6m to DKK 3.5m for CEOs and from DKK 30 30 9.1 2 7 29 from 25% to 35% of base salary. In the same period, 1.3m to DKK 2.1m for CFOs. This corresponds to an 0 0 37 there was also a large dispersion of relative bonus 3 increase of 21.5% p.a. and 13.3% .1 p.a., respectively. .2 .3 .0 20 2 payouts between the 25th and 75th percentiles. In 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 24 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
- - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile lle sp lter lle sp lter lle sp lter lle sp lter lle sp lter lle sp lter sp lter sp lter sp lter sp lter sp lter sp lter
e u er tio reports e u er tio reports 19 20 19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 1 0 r 1
e 12
r 10 r 1 0 b
e 12 e 12 10 10.0 1 0 m 10 b b 10.0 .
u 10.0
m 10 m 10 . . . 120 u u 9.0 . 120 .1 120 9.0 .9 .1 .9 100 2 2 .0 .9 .9 100 1 1 1 1 . 2 2 2 .0 1 0 0 1 0 1 1 . 0 2 .3 LTI - 0 0 0 7.0 0 .3 LTI .3 LTI - 200 2009 2010 2011 2012 2013 201 201 201 2017 201 7.0 . 0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 0 .0 . 0 . .0 . 0 0 .0 .1 .0 DKKm .1 20
DKKm 20
DKKm 20 .0 .0 0 0 e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.2 3.1 e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 2.9 3.1 Bonu 2.0 2.7 2.9 Bonu 2.0 2.7 201 201 1.0 1.0 2013 201 201 201 2017 0.0 2013 201 201 201 2017 201 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile ce ti e progr e t pes ce ti e progr e t pes 201 ce ti e progr e t pes 201 e sio co tri utio s perce t ge o se s l r i e sio co tri utio s perce t ge o se s l r i 2017 2017 0 Ba e alary Pen ion Other Bonu LTI 0 CEO . Average 2 . Ba e alary Pen ion Other Bonu LTI CEO . Average 2 . C O . Average 21.0 C O . Average 21.0 0 C O . Average 21.0 0 Other Executive Director . Average 20.1 Other Executive Director . Average 20.1 Executive roup . Average 13.1 Executive roup . Average 13.1 0 0 s s 30 P U Option arrant 30 P U Option arrant 201 R U Matching hare 201 R U Matching hare
20 201 20 201
201 10 10 201 10
2017 esti g criteri 0 esti g criteri 2017 0 One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI One column repre ent one executive director Other financial KPIs 3 Ba e alary Pen ion Other Bonu LTI Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3 EBITDA EBIT 11 EBITDA EBIT 11 Other non-financial KPIs 7 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 7 Bo us p out s perce t ge o se s l r i 1 T R hare price 1 EP 7 EP 120 7 Revenue 11 120 CEO . Average 3. Revenue 11 CEO . Average 3. Cash flow s Cash flow s C O . Average 7.1 Individual C O . Average 7.1 Individual 100 C O . Average 7.1 Cu tomer ervice KPI - 100 201 100 Other Executive Director . Average 3 .1 Cu tomer ervice KPI - Undi clo ed - 201 Other Executive Director . Average 3 .1 9 Undi clo ed 9 Executive roup . Average .2 Unknown 1 Executive roup . Average .2 Unknown 1 0 one 201 20 0 one 20 201 20
201 0 201 0
2017 2017 0 0 Ba e alary Pen ion Other Bonu LTI Remuneration in Danish Large Cap Companies | Bonus Ba e alary Pen ion Other Bonu LTI
20 20
esti g ur tio o progr es esti g ur tio o progr es 0 esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p 1 column repre ent 1 executive director ri le p
0 0 39 0 0 39 3 3 39 39 3 3 3 Ve ting period average 2.9 year 3 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right Ve ting period average 2.9 year 3 37 3 37 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 3 37 13.1 Programme expiry average .0 year 3 13.1 30 Programme expiry average .0 year 7 13.1 32 30 7 10. 32 10.3 10. 10.0 31 10.3 30 30 9.1 10.3 10.0 2 31 7 30 29 30 9.1 2 7 0 0 29 37 0 0 3 .1 .2 .0 .3 37 .3 20 3 .1 .2 .0 .3 2 2 20 .0 3.7 2 2 19 19 3. .0 3.0 3.7 19 1 1 2. 3.7 3. 19 3.0 1
1 1 1.7 2. umber of programme 2. 1
1.7 umber of programme
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Source: Deloitte analysis. Note: Companies that did not disclose their overall executive management remuneration breakdown - have been excluded. Only observations disclosed for each of the last five years have been included, leaving 30 companies. - - 1 2 3 7 9 - 1 2 3 7 9 umber of year s e elop e t i o us p out s perce t ge o se s l r le t right umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio igure o positio o tot l re u er tio 2 2 .7 . . 7 7 .7 . . 7 7 7 . 7 U 9 7 . 3. re sur sh res u its s perce t ge o outst i g sh res U 9 3 3. U 3. re sur sh res u its s perce t ge o outst i g sh res 3 39 3. 2.9 3. 39 2. 2.9 30 2 2. 30 2. 2. 2.0 2 1. UK 1 2.0 1 1. 1.1 UK 11 1 0.9 0.9 1 10 1.1 11 0. 0.9 0.9 7 10 Trea ury hare average 2. 0. 7 2013 201 201 201 2017 2013 201 201 201 2017 Trea ury hare average 2. Continental LTI out tanding average 1. 2013 201 201 201 2017 2013 201 201 201 2017 ContinentalEurope LTI out tanding average 1. Europe 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark Denmark Source: Deloitte analysis. Note: Companies that did not disclose their CEO remuneration breakdown have been excluded. Only observations disclosed for each of the last five years have been included, leaving 22 companies. ixed alary Other Bonu LTI ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 3.2 2. 3.0 7 3.0 2 7 2. 2. 2 2. 1 2.3 2. 2.1 se s l ries le t perce tiles or to right 7 1 2.3 1 2.1 se s l ries le t perce tiles or to right 7 1 37 3 1. 1. 37 1. 1. 37 3 30 1.3 1. 1. 0 1. 1 .0 30 1.3 0 1 .0 21 22 0.9 1.0 21 22 1.0 0.7 9. 21 1 0.9 0. 9. 13 0.7 0. 9. 1 11 0.7 13 0. 0. 12.0 9.3 9. 11 12.0 9.3 2013 201 201 201 2017 2013 201 201 201 2017 .7 2013 201 201 201 2017 2013 201 201 201 2017 10.0 . .7 10.0 . .2 .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9 .0 .0 7.0 Source: Deloitte analysis. Note: Companies that did not disclose their CFO remuneration breakdown have been excluded. .9 7.0 Only observations disclosed for each of the last five years have been included, leaving 15 companies. .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 e rl issu ce s perce t ge o outst i g sh res
DKKm e rl issu ce s perce t ge o outst i g sh res DKKm . . 25 .0 . . 0.3 . . 0.3 .0 0.33 0.3 . 0.3 .0 .2 0.33 .2 .7 2.0 .7 0.2 2.0 0.2 0.2 2013 201 201 201 2017 0.2 0.0 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile 0.17 i u o us lloc tio s perce t ge o se s l r 0.17 i u o us lloc tio s perce t ge o se s l r 0.17 0.12 0.12 300 0.10 0.09 se s l ries le t perce tiles or to right 300 0.10 0.09 se s l ries le t perce tiles or to right se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 0.0 0.0 0.03 0.0 .1 CEO average 7 0.03 .0 .0 0.03 .0 .1 2 0 CEO average 7 .0 .0 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 Other executive board member average 79 Other executive board member average 79 2013 201 201 201 2017 7.0 7.0 . 2 th percentile Median 7 th percentile . 2 th percentile Median 7 th percentile .3 . 200 .0 .3 200 .0
.0 . . .0 . . 1 0 . . . 1 0 . .0 .3 .0 DKKm .3 DKKm DKKm .0 3.0 3.9 100 .0 3.0 3.9 3.9 100 3.9 3.7 2.0 3.7 2.0 3.3 0 3.3 1.0 0 1.0 2013 201 201 201 2017 0.0 2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile 0 One column repre ent C O 2 th percentile Median 7 th percentile lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0
2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s
30 P U Option arrant 201 R U Matching hare
20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
Ba e alary Pen ion Other Bonu LTI
20
esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
- - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 Remuneration in Danish Large Cap Companies | Bonus 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 Maximum bonus allocation as a percentage of .9 base salary of base salary for all companies where these limits e rl issu ce s perce t ge o outst i g sh res DKKm . .0 . Through their remuneration policies, companies set a were disclosed in 2017. As can be seen, the maximum cap on the size of bonus issuance as a percentage of payments vary considerably across the companies . 0.3 . base salary, which in some cases can be significantly shown, ranging from 25% all the way up to 300%. In 0.3 .0 0.33 .2 higher than what executives have actually been paid almost all cases, the CEO’s cap is set higher than, or in recent years. In the chart below, we show the the same as, other executive directors. The average .7 maximum permissible bonus payment as a percentage cap was 88% for CEOs and 79% for other executive 2.0 0.2 directors. 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile
Source: Deloitte analysis
26 Remuneration in Danish Large Cap Companies | Bonus
Bonus and LTI substitution compensation as a bonus tend to receive a larger part To establish whether there is a systematic link between of their remuneration as LTI and vice versa. Below we variable and fixed elements of compensation packages, have compared bonus and LTI as a percentage of total
lle sp lter lle sp lter we have looked at whether a substitution effect existed fixed lle remuneration sp lter in a scatterplot. between short-term and long-term incentive elements. sp lter sp lter That is, we have investigated whether executive sp lterAs apparent from the graph, there is no clear tendency directors who receive a small portion of their total of LTI and bonus substitution. e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0 Source: Deloitte analysis Note: Companies that did not display bonus and LTI remuneration in 2017 have been excluded, leaving 33 companies. 2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s 27 30 P U Option arrant 201 R U Matching hare
20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
Ba e alary Pen ion Other Bonu LTI
20
esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
- - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports
Remuneration in Danish Large Cap Companies | 19 Long-term incentives (LTIs) 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 Long-term incentives (LTIs) .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0 Of the 38 companies analysed, there were only six programmes, we have included only programmes .0 .1
DKKm companies20 that did not have an active LTI programme that are still active, as the objective of this analysis is .0 in 2017. The remaining 32 companies have 55 separate to describe the LTI schemes currently being applied by LTI programmes.0 A limited number of LTI programmes companies. In the chart below we have classified the e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 are essentially two different programmes merged as individual company programmes into five categories 2.9 one, for example some LTI programmes consist of both as presented in the introduction, namely “Matching Bonu 2.0 2.7 share options and RSUs. To improve the comparability shares”, “Performance Share Units (PSUs)”, “Restricted 201 of LTI programmes, we have treated these programmes Stock Units (RSUs)”, “Options” and “Warrants”. As seen 1.0 as two separate programmes throughout this analysis. from the table, the RSU structure is the most commonly 2013 201 201 201 2017 0.0 When looking at the structure of the different LTI used structure, followed by PSU and Options. 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 There were 32 companies with 55 0 Other Executive Director . Average 20.1 separate, active LTI programmes, Executive roup . Average 13.1 in 2017 0 s
30 P U Option arrant 201 R U Matching hare
Source: Deloitte analysis 20 201
Vesting criteria for LTI programmes as of 2017 As illustrated below, it is clear that there is a large 201 10 In order to give management incentive to make the variation in the vesting criteria between programmes right decisions, the variable payment is conditional and that no clear consensus exists. As vesting criteria on some set of vesting criteria, which measure the are often customised for companies and strategies 2017 esti g criteri 0 performance of the executive whom would receive the and in some cases for individual participants, some One column repre ent one executive director variable pay. If the receiver does not meet the vesting diversity in the applied vesting criteria is to be Ba e alary Pen ion Other Bonu LTI Other financial KPIs criteria, all or part of the receiver’s variable pay may expected. 3 lapse. Of theEBITDA EBIT 55 active LTI programmes in 2017, 10 11 appliedOther non-financial no vesting KPIs criteria. Of those that did,7 we see In terms of disclosure, 9% of the 45 programmes did Bo us p out s perce t ge o se s l r i large differencesT R hare pricein the types of vesting criteria applied not1 clearly disclose what vesting criteria applied, while in the different LTI programmes and the level of detail 18% did not clearly disclose whether vesting criteria EP 7 120 disclosed about them. applied at all. This is clearly an area where Danish Revenue 11 CEO . Average 3. Large-Cap Companies could improve disclosure. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI 28 - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
Ba e alary Pen ion Other Bonu LTI
20
esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
- - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0
2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 Remuneration in Danish Large Cap Companies | Long-term incentives (LTIs) 0 s
30 P U Option arrant 201 R U Matching hare
20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
Source: Deloitte analysis. Note: “Unknown” indicates that the company did not disclose whether vesting criteria applied, whereas “Undisclosed” indicates an LTI programme that has vesting criteria which were undisclosed and “None” indicates the scheme did not apply vesting criteria. 201 0 Note: “Other financial KPIs” includes both unspecified financial KPIs and financial KPIs other than those shown in the table. Similarly, “Other non-financial KPIs” includes both unspecified non-financial KPIs and non-financial KPIs other than those shown in the table. Note: Figures do not sum to 100%, as an LTI programme can have more than one vesting criterion. 2017 0 Looking at how the vesting criteria are evaluated, it We also look at whether vesting criteria are measured Ba e alary Pen ion Other Bonu LTI is apparent that only a limited number of companies on a personal or companywide basis. Personal vesting disclose whether they measure their criteria on an criteria are performance measures solely or mainly at 20 absolute or a relative basis: an individual level, while companywide-vesting criteria are performance measures at an organisational level. •• Relative basis: those measures that are evaluated esti grelative to other ur tio companies, o progr esindustry groups or stock Regarding company disclosure of measurement on 0 indices. an individual or companywide basis, 13 of the 31 1 column repre ent 1 executive director ri le p companies, which have active LTI programmes, chose •• Absolute basis: those measures that are solely not to disclose this information on any of their LTI related to the issuing firm. For example, this could be programmes. Among the companies that did disclose 0 0 39 a static threshold or Total Shareholder Return (TSR) their valuation basis, there is a clear tendency of 39 3 3 3 higher than latest three-year period. evaluation being on a companywide Ve ting period basis. average 2.9 year >> 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 How companies measure vesting criteria Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 Absolute 2 / relative Individual or companywide 7 29 0 0 37 Absolute 26% Both 18% 3 .1 .2 .3 .0 20 2 2 .0 Both 15% Companywide 50% 19 3.7 3. 19 3.0 1 1 2. Relative 1 21% Individual 9 %
1.7 umber of programme 2013 201 201 201 2017 Undisclosed 38% Undisclosed 24% 2013 201 201 201 2017 2013 201 201 201 2017 10 Total 62% Total 76% CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Source: Deloitte analysis. We have excluded those schemes where it is unclear whether vesting criteria apply, resulting in a sample size of 34 schemes. “Undisclosed” above indicates that the scheme does apply vesting criteria but it is unclear what they are. - 29 - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile Remuneration in Danish Large Cap Companies | Long-term incentives (LTIs)
Valuation LTI is measured according to the principles set out by by companies. We observe that the most common IFRS 2. Typically, the fair value is determined on the framework for valuation of LTI programmers is the allocation date expensed linearly over the vesting Black-Scholes7 framework. This framework is applied period. Most LTI schemes either offer options or for the valuation of 53% of LTI programmes. Perhaps include embedded options, which means that the most notably, 25% of LTI programmes do not have a value cannot directly be measured but must be clearly disclosed valuation method. The final 21% of estimated by a valuation model. Below we have shown programmes apply a Monte Carlo valuation method or an overview of the valuation methodologies disclosed use the company’s share price.
Valuation methodology
Black-Scholes 53%
Monte Carlo 5%
Share Price 16%
Undisclosed 25%
Total 100%
Source: Deloitte analysis.
7. Black, F. och M. Scholes, 1973, Tthe Pricing of Options and Corporate Liabilities”, Journal of Political Economy, Vol 81, pp. 637-654.
30 lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0
2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s
30 P U Option arrant 201 R U Matching hare
20 201
201 10 Remuneration in Danish Large Cap Companies | Long-term incentives (LTIs)
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed The disclosed fair value of most LTI programmes9 only evaluated to determine the size of LTI payments. The Executive roup . Average .2 partly representsUnknown the potential maximum payout at duration1 of the LTI programme is the time until the 0 exercise or programme one expiry. Moreover, as IFRS LTI programme expires at which point the remaining 201 20 2 permits a number of adjustments concerning outstanding LTI units or shares would typically lapse. vesting criteria, such as assumptions about expected employee turnover and expected employment period, The average vesting period of LTI programmes, and 201 0 the fair value disclosed may well be significantly lower indeed by far the most common is c. 3 years. For than the actual maximum economic value of the programme duration, the average time is c. 5 years, warrants at grant. although there is more variation compared to the 2017 0 vesting period. We expect that this variation reflects Vesting period and duration that LTI in general is linked to firm-specific strategies, Ba e alary Pen ion Other Bonu LTI The vesting period is the period when performance is which may have different time horizons. >>
20
esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
- - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio Source: Deloitte analysis 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 31 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 12.0 9.3
2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0
2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s
30 P U Option arrant 201 R U Matching hare
20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
Ba e alary Pen ion Other Bonu LTI
20
Remuneration in Danish Large Cap Companies | Long-term incentives (LTIs) esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 LTI programme size and issuance We therefore compare the number of each company’s 19 3.7 3. 19 3.0 1 1 2. Companies 1 that use LTI programmes as part of own treasury shares with the aggregated size of
1.7 umber of programme their remuneration package assume a potential the company’s LTI programmes – both measured 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 liability, 10 which is typically linked to the development as a percentage of outstanding shares. From the of the company’s share price. One way of hedging figure below it is clear that the size of different LTI this liability is through the purchase of own shares programmes is diverse, which is also the case for the CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile held in treasury until the options or warrants are number of shares that companies hold in treasury. exercised. Shares may also be held in treasury for However, it is clear that the majority of companies - other reasons, but -comparing the1 number of2 treasury 3 hold more treasury shares than outstanding LTI 7 share 9
shares to outstanding LTI share equivalents gives some equivalents. umber of year s e elop e t i o us p out s perce t ge o se s l r le t right indication as to whether the companies are able to and igure o positio o tot l re u er tio do hedge their exposure using treasury shares. 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. 1 2.3 2.1 se s l ries le t perce tiles or to right 7 1
37 3 1. 1. 1. 30 1.3 0 1 .0 21 22 0.9 1.0 9. 1 0.7 13 0. 0. 9. 11 Source: Deloitte analysis 12.0 9.3 Note: When outstanding shares are undisclosed, total shares are used as a proxy. Note: All companies that disclose the number of outstanding LTI units for at least one LTI programme have been included, leaving 25 companies. 2013 201 201 201 2017 2013 201 201 201 2017 .7 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2 32 .7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0
.0 . . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
e u er tio reports
19 20 Bonus and LTI as a percentage of fixed remuneration (all executive directors) 1 1 ther ecuti e irectors se s l ries le t or perce tiles or to right 1 0 1 r
e 12 10 1 0 b 10.0
m 10 . u .
120 9.0 .1 .9 .9 100 2 2 .0 1 1 1 1 . 2 0 0 0 0
.3 LTI - 7.0 200 2009 2010 2011 2012 2013 201 201 201 2017 201 . 0 .0 . 0
.0 .1
DKKm 20 .0 0
e u er tio o e ecuti e irectors 3.0 3.2 3.2 0 20 0 0 0 100 3.1 2.9 Bonu 2.0 2.7
201 1.0
2013 201 201 201 2017 0.0 201 One column repre ent one Other Executive Director 2 th percentile Median 7 th percentile
ce ti e progr e t pes 201
e sio co tri utio s perce t ge o se s l r i 2017 0 Ba e alary Pen ion Other Bonu LTI CEO . Average 2 .
C O . Average 21.0 0 Other Executive Director . Average 20.1 Executive roup . Average 13.1 0 s
30 P U Option arrant 201 R U Matching hare
20 201
201 10
esti g criteri 2017 0
One column repre ent one executive director Ba e alary Pen ion Other Bonu LTI Other financial KPIs 3
EBITDA EBIT 11 Other non-financial KPIs 7 Bo us p out s perce t ge o se s l r i T R hare price 1 EP 7 120 Revenue 11 CEO . Average 3. Cash flow s C O . Average 7.1 Individual 100 Cu tomer ervice KPI - 201 Other Executive Director . Average 3 .1 Undi clo ed 9 Executive roup . Average .2 Unknown 1 0 one 201 20
201 0
2017 0
Ba e alary Pen ion Other Bonu LTI
20
esti g ur tio o progr es 0 1 column repre ent 1 executive director ri le p
0 0 39 39 3 3 3 Ve ting period average 2.9 year 3 ll e ecuti e irectors e elop e t i o us p out s perce t ge o se s l r le t right 3 37 3 13.1 Programme expiry average .0 year 30 7 32 10. 10.3 10.0 31 30 30 9.1 2 7 29 0 0 37 3 .1 .2 .3 .0 20 2 2 .0 19 3.7 3. 19 3.0 1 1 2. 1
1.7 umber of programme 2013 201 201 201 2017 2013 201 201 201 2017 2013 201 201 201 2017 10
CEO C O Other 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile
- - 1 2 3 7 9
umber of year s e elop e t i o us p out s perce t ge o se s l r le t right igure o positio o tot l re u er tio 2
.7 . . 7 7
7 . U 9 re sur sh res u its s perce t ge o outst i g sh res 3 3. 3. 39 2.9 2. 30 2 2. 2.0 Remuneration in Danish Large Cap Companies | Long-term incentives (LTIs) 1. UK 1 1 1.1 0.9 10 11 0.9 0. 7 Trea ury hare average 2. 2013 201 201 201 2017 2013 201 201 201 2017 Continental LTI out tanding average 1. Europe
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Denmark
ixed alary Other Bonu LTI s e elop e t i o us p out s perce t ge o se s l r le t right 3 3.2 3.0 7 2. 2 2. In the graph below the size of yearly LTI issuance percentile has remained relatively stable. With a five- 1 2.3 2.1 se s l ries le t perce tiles or to right 7 of1 shares or share equivalents during the last five year average duration, yearly issuance of between years can be seen. Total yearly issuance of LTI also 0.2% (median) and 0.35% (75th percentile) of the share 37 3 1. 1. 1. 30 1.3 includes0 other key employees and not only executive capital implies that the total size of programmes will 1 .0 management. As seen in the figure below, the median comprise between 1.0% and 1.8% of the total share 21 22 0.9 1.0 9. 1 0.7 LTI issuance level increased from 0.10% to 0.19% capital. Compared to the current average size of LTI 13 0. 0. 9. 11 12.0 9.3 between 2013 and 2017. The median and upper programmes (c. 1.4%), this indicates that the sizes of LTI percentiles have both increased, while the lower programmes could remain at similar levels in the near 2013 201 201 201 2017 2013 201 201 201 2017 .7 future. >> 10.0 . .2 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 7.9
.0 7.0 .9 e rl issu ce s perce t ge o outst i g sh res DKKm . .0 .
. 0.3 . 0.3 .0 0.33 .2
.7 2.0 0.2 0.2 2013 201 201 201 2017 0.0 0.19 One column repre ent one CEO 2 th percentile Median 7 th percentile i u o us lloc tio s perce t ge o se s l r 0.17
0.12
300 0.10 0.09 se s l ries le t perce tiles or to right 0.0 0.0 0.0 0.03 CEO average 7 0.03 .0 .1 .0 .0 2 0 Other executive board member average 79 2013 201 201 201 2017 7.0 . 2 th percentile Median 7 th percentile .3 200 .0 Source: Deloitte analysis Note: Only active programmes have been included. . .0 Note: Only programmes with disclosed LTI issuance amount in all five years have been included in the graph, leaving 23 programmes. . . 1 0 .
.0 .3 DKKm
.0 3.0 3.9 100 3.9
3.7 2.0
3.3 0 1.0
2013 201 201 201 2017 0.0 0 One column repre ent C O 2 th percentile Median 7 th percentile 33 Remuneration in Danish Large Cap Companies | Long-term incentives (LTIs)
As an alternative measure of the size of LTI base salary. The trends during the last four years programmes, we also measured the yearly LTI payment are different for the three groups, with CEOs and all to an executive director as a percentage of the executive directors showing a general increase, while respective director’s base salary. Our analysis shows CFO allocations fell between 2013 and 2016, before that the median executive director received 36% in LTI increasing again in the most recent year to 31%. as a proportion of base salary in 2017, which generally lle sp lter lle sp lter lle sp lter increased each year since 2013 when the same figure We observe lle sp lter median nominal LTI allocations of DKK lle sp lter lle sp lter was 27%. For a CEO in 2017, the median LTI allocation sp lter6.8m, DKK 2.9m and DKK 1.4m in 2017 for all executive sp lter sp lter sp lter sp lter sp lter was 37%, which is equivalent to over four months’ directors, CEOs and CFOs, respectively.
ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge o se s l r le t right ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge o se s l r le t right 12.2 7 11. 12.2 11. 1.2 7 1.2 1 11. 10. 11. 7 1 10. 3 7 3 1.0 1.0 7.2 .9 . 3 7.2 .9 .2 33 3 . 3 .2 0. 33 3 cto er 27 27 .0 0. u e u e 2 .0 cto er u e u e 27 27 .0 3.9 Publication in the Propo al of law with 2 3. Implementation period 1 .0 m 1 3.1 3.9 OfficialPublication Journal in the of the precedingPropo al of con ultation law with Implementation period
3. K 1 13 1 3.1 m 0. Official Journal of the preceding con ultation 1 2.1 K European Union 1 1.9 K 13 D 0. 1.9 2.1 K European Union D
2013 201 201 201 2017 2013 201 201 201 2017 0. 2013 201 201 201 2017 2013 201 201 201 2017 0.
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 0.2 2017 2018 2019 0.2 Source: Deloitte analysis. 2017 2018 2019 Note: Companies that did not disclose an overall executive management remuneration breakdown have been excluded. / / Only observations disclosed for the entire period have been included, leaving 30 companies. - - Chair Deputy chair Other member Chair Deputy chair Other member s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right Male emale s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right u e epte er u e Male emale u e epte er u e Effective date (20 days after The European Commi ion Effective in Denmark Effective date (20 days after Effective in Denmark 7 . publication in the Official adopt The European implementing Commi ion act at the late t 2 7 . . ournalpublication of the in Europeanthe Official atadopt the late timplementing 1 month act month at the late t after 2 . Union ournal of the European after at the effective late t 1 date) month effectivemonth after date) . Union after effective date) effective date) .1 . 0 .1 3. 0 3. 37 2.9 30 32 37 2.9 30 2 2 32 2.2 2.2 2 2.0 2 2 1. 2.2 2.2 22 2 2.0 1. 20 1. 2 22 1. 20 1 1.1 2 1 0.9 1.1 0.9 0. 0. 0 0.0 20 20130 201 201 201 2017 20130.0 201 201 201 2017 20 2013 201 201 201 2017 2013 201 201 201 2017 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 1 1
Source: Deloitte analysis. Note: Companies that did not disclose their CEO remuneration breakdown have been excluded. umber of Member 10 umber of Member 10 Only observations disclosed for each of the last five years have been included, leaving 22 companies.
s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right 34 s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right 91 3.7 91 3.7 0 0 3 0 2 0 2 0 2 70 72 7 7 3 0 2 0 2 0 2 70 72 7 7 2.7 Age 2.7 Age 7 2.3 7 1 2.3 2.0 1 1. 2.0 1. 3 1. 1.3 30 3 29 31 1. 1.1 1.3 1.1 30 29 2 31 1.0 2 1.1 1.1 1 1.0 0. 0. 13 13 1 12 0. 10 0. 0. 0. 100 13 13 0. 10 12 0. 100 1 0.1 90 20131 201 201 201 2017 20130.1 201 201 201 2017 90 2013 201 201 201 2017 2013 201 201 201 2017 0 0 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 70 70 0 0 0 0 0 0 30 umber of Member 30 umber of Member 20 20 10 i u lloc tio s perce t ge o se s l r 10 i u lloc tio s perce t ge o se s l r 0 0 3 0 2 0 2 0 2 70 72 7 7 3 0 2 0 2 0 2 70 72 7 7 00 Age 00 Age Male emale 3 0 Male emale 3 0 CEO average CEO average 300 Other executive board member average 3 300 Other executive board member average 3
2 0 2 0
200 200
1 0 1 0
100 100 Other 1 9 Other 1 9 0 inni h 2 0 inni h 2 erman 3 0 erman 3 0 Iri h 2 Iri h 2 rench 3 rench 3
orwegian orwegian
American American Dani h Dani h wedi h wedi h
ggreg te o r re u er tio ggreg te o r re u er tio Briti h Briti h 7.1 7.0 .7 . 7.1 . . 7.0 .1 . .7 .9 .1 . .9 . . .2 .3 . .0 .3 .0 .2 201 . 201 .0 . .1 3. .0 .1 201 3. 201 DKKm 201 DKKm 201 2017 2017
Average 2 th percentile Median 7 th percentile Average 2 th percentile Median 7 th percentile 1. 0 1. 0 1. 0 1. 0 e u er tio o ch irperso s 1. 0 e u er tio o ch irperso s 1. 1.9 1. 0 1.9 1. 1.20 1. 1. 1.20 1. 1. 1. 1. 1. 1. 1. 1. 1.00 1.3 1.3 1.3 1. 1. 1. 1.00 1.3 1.3 1.3 1. 201 201 DKKm 0. 0
DKKm 1.0 201 0. 0 0.9 0.9 0. 1.0 201 0.9 0.9 0. 0. 0 DKKm 201 0. 0
DKKm 201 2017 0. 0 2017 0. 0 0.20 0.20 - - Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile chairper on chairper on chairper on chairper on chairper on chairper on
3.0 3.0
2. 2. 1 1 2.0 1 2.0 1 12 1. 12
DKKm 1. 10
DKKm 10 1.0 1.0 umber of Board 0. umber of Board 0. 2 2 0.0 0.0 0 0 1 2 3 7 9 10 11 12 13 1 1 1 column repre ent 1 chairper on 1 2 3 7 9 10 11 12 13 1 1 1 column repre ent 1 chairper on umber of board member umber of board member
Bo r e ers tot l h irperso s eput ch irperso s Bo r e ers tot l h irperso s eput ch irperso s
Male emale Male emale lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
lle sp lter lle sp lter lle sp lter ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge o se s l r le t right sp lter sp lter sp lter 12.2 7 11. 11. 1.2 1 10. 7 3 1.0
ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge7.2 o se s l r le t right .9 . 3 .2 33 3 12.2 7 11. 1.20. 27 27 .0 11. cto er u e u e 1 2 .0 10. 3.9 Publication in the Propo al of law with Implementation period 7 3. 1 m 1 3 3.1 Official Journal of the preceding con ultation 1 13 K 0. 1.9 2.1 K 1.0 European Union D 7.2 .9 . 3 .2 33 3 2013 201 201 201 2017 2013 201 201 201 2017 0. 27 27 .0 cto er u e u e 2 .0 3.9 Publication in the Propo al of law with 3. Implementation period 1 m 2 th percentile 1 Median 7 th percentile 2 th percentile 3.1Median 7 th percentile Official Journal of the preceding con ultation K 1 13 0. 0.2 2017 2018 2019 1.9 2.1 K European Union D /
- 2013 201 201 201 2017 2013 201 201 201 2017 0. Chair Deputy chair Other member s e elop e t2 th percentile i e rl Median lloc tio s7 th s percentile perce t ge o se s l r le t 2 th percentile right Median 7 th percentile Male emale 0.2 2017 u e 2018 epte er201 9 u e Effective date (20 days after The European Commi ion Effective in Denmark 7 . / publication in the Official adopt implementing act at the late t 2 . - ournal of the European at the late t 1 month month after Chair Deputy chair Other member Union after effective date) effective date) . s e elop e t i e rl lloc tio s s perce t ge o se s l r le t .1 right 0 Remuneration in Danish Large Cap Companies | Male emale 3. Long-term incentives (LTIs) u e epte er u e Effective date (20 days after The European Commi ion Effective in Denmark 2.9 30 7 37 . publication in the Official adopt implementing act at the late t 2 32 . ournal of the European at the late t 1 month month after 2 2 2.2 2.2 2 2.0 Union effective date) 1. after effective date) 22 1. 20 . 2 1 .1 1.1 0 0.9 3. 0.
0 0.0 37 2.9 2030 2013 201 201 201 32 2017 2013 201 201 201 2017 2 2 2.2 2.2 2 2.0 1. 20 2 th percentile Median 7 th22 percentile 2 th percentile Median 1. 7 th percentile 1 2 1 1.1 0.9 0.
0 0.0 umber of Member 1020 2013 201 201 201 2017 2013 201 201 201 2017
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right 1
91 3.7
umber of Member 100 3 0 2 0 2 0 2 70 72 7 7
2.7 Age s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right 7 2.3 1 91 3.7 2.0 1. 0 3 1. 1.3 3 0 2 0 2 0 2 70 72 7 7 30 29 31 2 1.1 1.1 2.7 1.0 Age 1 2.3 0. 0. 7 13 13 0. 10 12 0. 100 1 2.0 1. 1 0.1 90 2013 201 3 201 201 2017 2013 201 201 201 20171. 1.3 30 29 31 0 2 1.1 1.1 2 th percentile Median 7 th percentile 2 th percentile Median 7 th1.0 percentile 1 70 0. 0. 13 13 12 0. 0. Source: Deloitte analysis.10 100 0 Note: Companies that did not disclose their CFO remuneration breakdown have been excluded.0.1 1 0 90 Only observations2013 disclosed201 for each of201 the last five years201 have been included,2017 leaving 15 companies.2013 201 201 201 2017 0 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 30 70 umber of Member
20 0 To put these numbers into perspective, we look at the a large variation, from company to company, in the maximum LTI allocation as a percentage of base salary maximum LTI allocation as a percentage of base salary. 10 0 i u lloc tio s perce t ge o se s l r according to the guidelines of the LTI programmes The average and median values for CEOs are 86% 0 0 3 0 2 0 2 0 2 70 72 7 7 where disclosed. The maximum permissible allocations and 50%, respectively, while maximum permissible 30 are 00 shown in the figure below, where we can observe allocations vary from 10% all the way up to 400%. >> umber of Member Age 20 Male emale 3 0 10 i u lloc tio s perce t ge o se s l r CEO average 0 300 Other executive board member average 3 3 0 2 0 2 0 2 70 72 7 7 00 Age 2 0 Male emale 3 0 CEO average 200 300 Other executive board member average 3 1 0 2 0 100 Other 1 9 200
0 inni h 2 1 0 erman 3 0 Iri h 2 100 rench 3 Other 1 9
0 inni h 2 orwegian erman 3 0 Iri h 2 American rench 3 Source: Deloitte analysis Dani h 35 orwegian wedi h
ggreg te o r re u er tio American Briti h Dani h 7.1 . 7.0 . .7 wedi h .1 .9 . . .3 .0 .2 ggreg te o r re u er tio 201 . Briti h .0 .1 3. 7.1 . 7.0 201 . .7
DKKm .1 .9 201 . . .2 .3 .0 2017 201 . .0 .1 3. 201
DKKm 201 Average 2 th percentile Median 7 th percentile 1. 0 2017 1. 0
e u er tio o ch irperso s 1. 0 1. 1.9 Average 2 th percentile Median 7 th percentile 1.201. 0 1. 1. 1. 1. 1. 1. 1. 1.001. 0 1.3 1.3 1.3 201
e u er tio o ch irperso s DKKm 0. 01. 0 1.0 1.9 201 0.9 1. 0.9 0. 1.20 1. 0. 0 DKKm 1. 201 1. 1. 1. 1. 1. 0. 01.00 1.3 1.3 1.3 2017 201
DKKm 0.200. 0 1.0 201 0.9 0.9 0. 0. 0 -
DKKm 201 Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile chairper on chairper on chairper on 2017 0. 0
0.20
- Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile chairper on chairper on chairper on
3.0
2. 1
3.02.0 1
12 2. 1. DKKm 10 1 1.0 2.0 1 umber of Board 12 1. 0.
DKKm 10 2 0.0 1.0 0 1 2 3 7 9 10 11 12 13 1 1
1 column repre ent 1 chairper on umber of Board umber of board member 0.
2 0.0 0 1 2 3 7 9 10 11 12 13 1 1 Bo r e ers tot l h irperso s1 column repre ent 1 chairper on eput ch irperso s umber of board member
Bo r e ers tot l h irperso s eput ch irperso s
Male emale
Male emale Remuneration in Danish Large Cap Companies | Long-term incentives (LTIs)
Governance For all companies, with the exception of a few, the One company has moreover applied a cap to the remuneration policies and incentive pay guidelines are maximum payout of the LTI at exercise, a trend that is readily accessible on their websites. The remuneration also increasingly seen in an international context. policies vary in the level of detail, but in general offer good descriptions of the companies’ policies. These For financial companies there are specific regulations policies include details on whether caps have been set out for variable pay, including requirements for implemented with regard to the maximum size of deferral of payout of variable awards. The OMX Large- yearly bonus and LTI awards/allocations. 29 of the 35 Cap Index includes eight financial institutions, however, companies that permit LTI programmes have applied as Spar Nord does not apply variable remuneration, caps on LTI allocations, while all companies with bonus our sample below only includes seven financial programmes have caps in place. institutions. Interestingly, three out of 30 non-financial companies have also adopted deferral of variable pay.
Deferral
Non-financial Financial Total
Apply deferral 3 3 6
Do not apply deferral 26 3 29
Not clearly disclosed 1 1 2
Total 30 7 37
Source: Deloitte analysis.
A little over half of companies, based on information from remuneration policies, have adopted clawback provisions for malus or material misstatement.
Clawback
Non-financial Financial Total
Apply clawback 13 5 18
Do not apply clawback 15 2 17
Not clearly disclosed 2 - 2
Total 30 7 37
Source: Deloitte analysis.
36 Remuneration in Danish Large Cap Companies | Long-term incentives (LTIs)
Executive Shareholding Guidelines In this section we look at companies with published shareholding guidelines for executives. Only two companies had disclosed these in 2017 (we were not able to discern whether companies did have guidelines but have chosen not to disclose them), one of which expressed their guideline shareholding as a range rather than a specific amount of base salary. Of these two companies, the average guideline shareholding was 150% and 116% of base salary for CEOs and CFOs respectively, while the actual shareholding was 115% and 74%.
We also looked at the average actual shareholding as a percentage of base salary across all companies, where this was disclosed, and found that CEOs held a significantly higher percentage of stock relative to their base salary compared with CFOs, of 316% compared 102%.
We expect that over the coming years, more companies will adopt shareholding guidelines as more attention is drawn to the issue of aligning shareholder and management interests.
37 lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
ll e ecuti e irectors e elop e t i e rl lloc tio s lle s sp lter perce t ge o se s l r le t right lle sp lter lle sp lter
12.2 7 sp lter 11. 11. 1.2 sp lter sp lter 1 10. 7 3 1.0
7.2 .9 . 3 .2 ll e ecuti e irectors e elop e t33 i e rl 3 lloc tio s s perce t ge o se s l r le t right 0. 27 27 .0 cto er u e u e 2 12.2 7 .0 3.9 1.2 Publication in the Propo al of law with 11. 3. 11. Implementation period 1 3.1 m 1 1 10. Official Journal of the preceding con ultation 7 1 13 K 0. 2.1 K European Union 3 1.9 D 1.0
7.2 2013 201 201 201 2017 2013 201 201 .9 201 2017 . 0. 3 .2 33 3 0. .0 cto er u e u e
27 27 2 th percentile Median 7 th percentile 2 2 th percentile Median 7 th percentile .0 3.9 0.2 Publication in the Propo al of law with 3. 2017 2018 2019 Implementation period 1 m 1 3.1 Official Journal of the preceding con ultation 1 K 0.
13 / 1.9 2.1 K European Union D - Chair Deputy chair Other member 2013 201 201 201 2017 2013 201 201 201 2017 0. s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right Male emale
u e epte er u e 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile Effective date (20 days after Effective in Denmark The European Commi ion 0.2 2017 2018 2019 publication in the Official at the late t 2 7 . adopt implementing act . ournal of the European at the late t 1 month month after / Union after effective date) effective date) . - .1 Chair Deputy chair Other member 0 3. s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right Male emale u e epte er u e 37 2.9 30 32 Effective date (20 days after The European Commi ion Effective in Denmark 2 2 2.2 2.2 publication in the Official adopt implementing act at the late t 2 7 2 . 2.0 1. . ournal of the European at the late t 1 month month after 20 22 1. 2 Union after effective date) effective date) 1 1.1 0.9 . .10. 0 0 3. 0.0 20 2013 201 201 201 2017 2013 201 201 201 2017 37 2.9 30 32 2 th percentile2 2 Median 7 th percentile 2 th percentile Median 2.27 th percentile 2.2 2 2.0 1 1. 22 1. 20 2 1 1.1 0.9
0. umber of Member 10 0 0.0 20 2013 201 201 201 2017 2013 201 201 201 2017 s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 1 91 3.7 0
umber of Member 10 3 0 2 0 2 0 2 70 72 7 7 2.7 Age
7 2.3 s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right 1 2.0 1. 91 3.7 3 1. 30 31 1.3 0 29 1.1 2 1.1 1.0 3 0 2 0 2 0 2 70 72 7 7 1 0. 2.7 0. 13 13 0. Age 10 12 0. 100 7 2.3 1 0.1 1 2.0 90 2013 201 201 201 2017 2013 201 201 201 1. 2017 0 3 1. 30 2 th percentile Median 7 th percentile 31 2 th percentile1.3 Median 7 th percentile 29 1.1 70 2 1.1 1.0 1 0 0. 0. 13 13 0. 10 12 0. 100 0 1 0.1 0 90 2013 201 201 201 2017 2013 201 201 201 2017 30 0 umber of Member 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 20 70
10 0 i u lloc tio s perce t ge o se s l r 0 0 3 0 2 0 2 0 2 70 72 7 7 0 00 Age 30 umber of Member Male emale 3 0 20 CEO average 10 i u 300 lloc tio s perce t ge o se s l r Other executive board member average 3 0 Remuneration in Danish Large Cap Companies | Board remuneration 3 0 2 0 2 0 2 70 72 7 7 00 2 0 Age
Male emale 3 0 200 CEO average
300 1 0 Other executive board member average 3
2 0 100 Board remuneration Other 1 9
200 0 inni h 2 erman 3 1 0 0 Iri h 2
rench 3 100 Other 1 9 37 of the 38 companies in consideration disclosed Looking at the development in board remuneration, orwegian aggregated 0 remuneration of the board in each of the there is a tendency of a general increase from year inni h 2 years 2014 to 2017. Nilfisk was the only company that to year, as the average and median (50th percentile) erman 3 did not,0 although we note that Nilfisk was only first indicate. The top and bottom 25% of boards were paid American Iri h 2 listed in 2017. Only six companies did not disclose less in 2017 compared to 2016. Over the four-year Dani h remuneration of the chairpersons from 2014 to 2017. period from 2014 to 2017, the average remuneration rench 3 increase that boards experienced was c. 6% p.a. wedi h orwegian
ggreg te o r re u er tio American Briti h 7.1 . 7.0 . .7 Dani h .1 .9 wedi h . . .3 .0 .2 201 . ggreg te o r re u er tio .0 .1 3. 201 Briti h 7.1 7.0 DKKm . . .7 201 .1 .9 . . 2017 .3 .0 .2 201 . .0 .1 3. 201
DKKm Average 2 th percentile Median 7 th percentile 201 1. 0 Source: Deloitte analysis Note: Only companies that disclosed aggregate board remuneration from 2014 to 2017 have been included, leaving 37 companies. 2017 1. 0
e u er tio o ch irperso s 1. 0 1. 1.9 From the median, a similar increase can be seen in the have been some more volatile changes at the 25th 1.20 1. Average 2 th percentile Median 7 th percentile1. remuneration1. of chairpersons.1. From year to year, there and 75th percentiles, which leads to an average annual 1. 0 1. 1. 1.00 is a steady1.3 increase in remuneration, although there 1.3increase 1.3 of c.1. 3% p.a. from 2014 to 2017. 201 1. 0 DKKm 0. 0 1.0 201 0.9 e u er tio o ch irperso s0.9 0. 1. 0 1. 1.9 0. 0
DKKm 201 1.20 1. 1. 2017 0. 0 1. 1. 1. 1. 1.00 1.3 1.3 1.3 1. 201 0.20
DKKm 0. 0 1.0 201 - 0.9 0.9 0. Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile 0. 0
DKKm 201 chairper on chairper on chairper on 2017 0. 0
0.20
- Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile 3.0 chairper on chairper on chairper on Source: Deloitte analysis Note: Only companies that disclosed chairperson remuneration over the last four years have been included, leaving 32 companies. 2. 1 38 2.0 1 3.0 12 1.
DKKm 10 2. 1.0 1
2.0 umber of Board 1 0. 12 1. 2 DKKm 10 0.0 0 1.0 1 2 3 7 9 10 11 12 13 1 1 1 column repre ent 1 chairper on umber of board member umber of Board 0.
2 0.0 Bo r e ers tot l h irperso s eput ch irperso s 0 1 2 3 7 9 10 11 12 13 1 1 1 column repre ent 1 chairper on umber of board member
Bo r e ers tot l h irperso s eput ch irperso s
Male emale
Male emale lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge o se s l r le t right
12.2 7 11. 11. 1.2 1 10. 7 3 1.0
7.2 .9 . 3 .2 33 3 0. 27 27 .0 cto er u e u e 2 .0 3.9 Publication in the Propo al of law with 3. Implementation period 1 m 1 3.1 Official Journal of the preceding con ultation 1 13 K 0. 1.9 2.1 K European Union D
2013 201 201 201 2017 2013 201 201 201 2017 0.
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 0.2 2017 2018 2019 /
- Chair Deputy chair Other member
s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right Male emale u e epte er u e Effective date (20 days after The European Commi ion Effective in Denmark 7 . publication in the Official adopt implementing act at the late t 2 . ournal of the European at the late t 1 month month after Union after effective date) effective date) . .1 0 3.
37 2.9 30 32 2 2 2.2 2.2 2 2.0 1. 22 1. 20 2 1 1.1 0.9 0.
0 0.0 20 2013 201 201 201 2017 2013 201 201 201 2017
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 1
umber of Member 10
s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right
91 3.7 0 3 0 2 0 2 0 2 70 72 7 7
2.7 Age
7 2.3 1 2.0 1.
3 1. 30 31 1.3 29 1.1 2 1.1 1.0 1 0. 0. 13 13 0. 10 12 0. 100
1 0.1 90 2013 201 201 201 2017 2013 201 201 201 2017 0 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 70
0
0
0
30 umber of Member
20
10 i u lloc tio s perce t ge o se s l r 0 3 0 2 0 2 0 2 70 72 7 7 00 Age
Male emale 3 0 CEO average
300 Other executive board member average 3
2 0
200
1 0
100 Other 1 9
0 inni h 2 erman 3 0 Iri h 2
rench 3
orwegian
American
Dani h
wedi h
ggreg te o r re u er tio Briti h 7.1 . 7.0 . .7 .1 .9 . . .3 .0 .2 201 . .0 .1 3. 201
DKKm 201
2017
Average 2 th percentile Median 7 th percentile 1. 0
1. 0
e u er tio o ch irperso s Remuneration in Danish Large Cap Companies | Board remuneration 1. 0 1. 1.9 1.20 1. 1. 1. 1. 1. 1. 1.00 1.3 1.3 1.3 1. 201
DKKm 0. 0 1.0 201 0.9 0.9 0. 0. 0
DKKm 201 2017 0. 0
0.20
- Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile chairper on chairper on chairper on We have also looked at the distribution of chairperson remuneration, which varied from DKK 140k to DKK 3m, with a median value of DKK 1.2m.
3.0
2. 1
2.0 1
12 1.
DKKm 10
1.0 umber of Board 0.
2 0.0 0 1 2 3 7 9 10 11 12 13 1 1 1 column repre ent 1 chairper on umber of board member Source: Deloitte analysis
Board base pay Finally,Bo r we have e ers looked tot l at the disclosed base pay of h irperso s Looking at the additional remuneration, eput ch irperso s which ordinary board members as well as the disclosed directors received for serving as a chairperson or as a additional allowance for serving as the chairperson deputy chairperson, the variability of figures was more or deputy chairperson (note that this may differ from constrained. Typically, chairpersons would receive actual member pay due to members serving additional three times the remuneration of ordinary board positions, such as being a member of the audit members while deputy chairpersons would receive committee etc., as well as other factors). twice the amount.
We found that the base board member remuneration varied considerably, with a median value of DKK 0.33m.
Member Deputy Audit co Audit co Rem co Rem co C h a i r p a y base pay chair pay chair pay member c h a i r p a y member multiple (DKKm) Male emalemultiple multiple pay multiple multiple pay multiple
Highest 0.7 4.5x 3.0x 10.0x 4.0x 2.4x 1.7x
Median 0.3 3.0x 1.9x 1.6x 1.4x 1.5x 1.3x
Lowest 0.1 2.3x 1.2x 1.3x 1.1x 1.2x 1.1x
Average 0.4 3.0x 1.9x 2.1x 1.5x 1.6x 1.3x
Source: Deloitte analysis
39 lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge o se s l r le t right
12.2 7 11. 11. 1.2 1 10. 7 3 1.0
7.2 .9 . 3 .2 33 3 0. 27 27 .0 cto er u e u e 2 .0 3.9 Publication in the Propo al of law with 3. Implementation period 1 m 1 3.1 Official Journal of the preceding con ultation 1 13 K 0. 1.9 2.1 K European Union D
2013 201 201 201 2017 2013 201 201 201 2017 0.
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 0.2 2017 2018 2019 /
- Chair Deputy chair Other member
s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right Male emale u e epte er u e Effective date (20 days after The European Commi ion Effective in Denmark 7 . publication in the Official adopt implementing act at the late t 2 . ournal of the European at the late t 1 month month after Union after effective date) effective date) . .1 0 3.
37 2.9 30 32 2 2 2.2 2.2 2 2.0 1. 22 1. 20 2 1 1.1 0.9 0.
0 0.0 20 2013 201 201 201 2017 2013 201 201 201 2017
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 1
umber of Member 10
s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right
91 3.7 0 3 0 2 0 2 0 2 70 72 7 7
2.7 Age
7 2.3 1 2.0 1.
3 1. 30 31 1.3 29 1.1 2 1.1 1.0 1 0. 0. 13 13 0. 10 12 0. 100
1 0.1 90 2013 201 201 201 2017 2013 201 201 201 2017 0 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 70
0
0
0
30 umber of Member
20
10 i u lloc tio s perce t ge o se s l r 0 3 0 2 0 2 0 2 70 72 7 7 00 Age
Male emale 3 0 CEO average
300 Other executive board member average 3
2 0
200
1 0
100 Other 1 9
0 inni h 2 erman 3 0 Iri h 2
rench 3
orwegian
American
Dani h
wedi h
ggreg te o r re u er tio Briti h 7.1 . 7.0 . .7 .1 .9 . . .3 .0 .2 201 . .0 .1 3. 201
DKKm 201
2017
Average 2 th percentile Median 7 th percentile 1. 0
1. 0
e u er tio o ch irperso s 1. 0 1. 1.9 1.20 1. 1. 1. 1. 1. 1. 1.00 1.3 1.3 1.3 1. 201
DKKm 0. 0 1.0 201 0.9 0.9 0. 0. 0
DKKm 201 2017 0. 0
0.20
- Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile chairper on chairper on chairper on
Remuneration in Danish Large Cap Companies | Board demographics 3.0
2. 1
2.0 1 Board demographics 12 1.
DKKm 10
1.0 umber of Board 0. This year, we have included new analyses on the Gender distribution demographics of company board members, which we There were 358 board members serving across the 38 2 0.0 believe is pertinent given the growing societal focus companies analysed as disclosed in their 2017 annual 0 1 2 3 7 9 10 11 12 13 1 1 on diversity in the workplace. We have found that the 1 columnreports. repre ent All 38 1chairpersons chairper on were male, while of the 41 median board member serving across the 38 listed deputy chairpersons, over three quarters were male. umber of board member companies included in this analysis was male, Danish, For other board members, a little over 70% were male. aged 57 and compensated c. DKK 540k.
Bo r e ers tot l h irperso s eput ch irperso s
Male emale lle sp lter Source: Deloitte analysis lle sp lter lle sp lter
sp lter sp lter sp lter The average chairperson received c. DKK 1.0m, while that these numbers are, to some extent, skewed by male deputy chairpersons received slightly more than members’ remuneration for other positions on the their female counterparts. Of other board members, board (such as being a member or chairperson of a male members received pay that was on average DKK committee) and we have not taken these effects out in ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge o se s l r le t right 0.1m lower than their female counterparts. We note this analysis. 12.2 7 11. 11. 1.2 1 10. 7 3 1.0
7.2 .9 . 3 .2 33 3 0. 27 27 .0 cto er u e u e 2 .0 3.9 Publication in the Propo al of law with 3. Implementation period 1 m 1 3.1 Official Journal of the preceding con ultation 1 13 K 0. 1.9 2.1 K European Union D
2013 201 201 201 2017 2013 201 201 201 2017 0.
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 0.2 2017 2018 2019 /
- Chair Deputy chair Other member
s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right Male emale u e epte er u e Source: Deloitte analysis Effective date (20 days after The European Commi ion Effective in Denmark 7 . publication in the Official adopt implementing act at the late t 2 . ournal of the European month after 40 at the late t 1 month Union after effective date) effective date) . .1 0 3.
37 2.9 30 32 2 2 2.2 2.2 2 2.0 1. 22 1. 20 2 1 1.1 0.9 0.
0 0.0 20 2013 201 201 201 2017 2013 201 201 201 2017
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 1
umber of Member 10
s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right
91 3.7 0 3 0 2 0 2 0 2 70 72 7 7
2.7 Age
7 2.3 1 2.0 1.
3 1. 30 31 1.3 29 1.1 2 1.1 1.0 1 0. 0. 13 13 0. 10 12 0. 100
1 0.1 90 2013 201 201 201 2017 2013 201 201 201 2017 0 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 70
0
0
0
30 umber of Member
20
10 i u lloc tio s perce t ge o se s l r 0 3 0 2 0 2 0 2 70 72 7 7 00 Age
Male emale 3 0 CEO average
300 Other executive board member average 3
2 0
200
1 0
100 Other 1 9
0 inni h 2 erman 3 0 Iri h 2
rench 3
orwegian
American
Dani h
wedi h
ggreg te o r re u er tio Briti h 7.1 . 7.0 . .7 .1 .9 . . .3 .0 .2 201 . .0 .1 3. 201
DKKm 201
2017
Average 2 th percentile Median 7 th percentile 1. 0
1. 0
e u er tio o ch irperso s 1. 0 1. 1.9 1.20 1. 1. 1. 1. 1. 1. 1.00 1.3 1.3 1.3 1. 201
DKKm 0. 0 1.0 201 0.9 0.9 0. 0. 0
DKKm 201 2017 0. 0
0.20
- Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile chairper on chairper on chairper on
3.0
2. 1
2.0 1
12 1.
DKKm 10
1.0 umber of Board 0.
2 0.0 0 1 2 3 7 9 10 11 12 13 1 1 1 column repre ent 1 chairper on umber of board member
Bo r e ers tot l h irperso s eput ch irperso s
Male emale lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
lle sp lter lle sp lter lle sp lter ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge o se s l r le t right sp lter sp lter sp lter 12.2 7 11. 11. 1.2 1 10. 7 3 1.0
ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge7.2 o se s l r le t right .9 . 3 .2 33 3 12.2 7 1.20. 27 27 .0 11. 11. cto er u e u e 1 2 .0 10. 3.9 Publication in the Propo al of law with 7 3. Implementation period 1 m 1 3 3.1 Official Journal of the preceding con ultation 1 13 K 0. Remuneration in Danish Large Cap Companies | Board demographics 1.9 2.1 K 1.0 European Union D 7.2 .9 . 3 .2 33 3 2013 201 201 201 2017 2013 201 201 201 2017 0. 27 27 .0 cto er u e u e 2
.0 3.9 Publication in the Propo al of law with Implementation period
3. 1 m 2 th percentile 1 Median 7 th percentile 2 th percentile 3.1Median 7 th percentile Official Journal of the preceding con ultation K 0.2 1 13 0. 2017 2018 2019 1.9 2.1 K European Union D /
0. - 2013 201 201 201 2017 2013 201 201 201 2017 Chair Deputy chair Other member s e elop e t2 th percentile i e rl Median lloc tio s7 th s percentile perce t ge o se s l r le t 2 th percentile right Median 7 th percentile Male emale 0.2 2017 u e 2018 epte er201 9 u e
Effective date (20 days after The European Commi ion Effective in Denmark 7 . / publication in the Official adopt implementing act at the late t 2 . - ournal of the European at the late t 1 month month after Chair Deputy chair Other member Union after effective date) effective date) . .1 Age distribution s e elop e t i e rl lloc tio s s perce t ge 0 o se s l r le t right Male emale 3. Board member age was disclosed for all board mem- member age was 57 years, while members’ age ranged u e epte er u e bers serving the companies analysed. The average over 39 years from 38 to 77. Effective date (20 days after The European Commi ion Effective in Denmark 37 2.9 30 7 . publication in the Official adopt implementing act at the late t 2 32 . ournal of the European at the late t 1 month month after 2 2 2.2 2.2 2 2.0 Union effective date) 1. after effective date) 22 1. 20 . 2 1 .1 1.1 0 0.9 3. 0. 0 0.0 37 2.9 2030 2013 201 201 201 32 2017 2013 201 201 201 2017 2 2 2.2 2.2 2 2.0 1. 2 th percentile Median 7 th22 percentile 2 th percentile Median 1. 7 th percentile 20 1 2 1 1.1 0.9 0.
0 0.0 umber of Member 1020 2013 201 201 201 2017 2013 201 201 201 2017
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right 1
91 3.7
umber of Member 100 3 0 2 0 2 0 2 70 72 7 7
2.7 Age s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right 7 2.3 Source: Deloitte analysis 1 91 3.7 2.0 1. We also0 looked at the relationship between gender and although to a lesser extent. As such, we could 3 1. 3 0 2 0 2 0 2 70 72 7 7 30 31 1.3 29 1.1 age to gain insight as to whether the gender imbalance postulate that all things being equal, women will make 2 1.1 1.0 2.7 Age 1 might equalise in the future. We see that there are up a greater proportion of board membership in future 0. 0. 13 7 13 2.3 0. 10 12 0. significantly100 more older men than older women (over years, although will remain underrepresented as a 1 2.0 1. 60 years old), while between the ages of 38 and whole as there are still more younger men taking board 1 0.1 90 2013 201 201 201 2017 60, women are relatively evenly underrepresented, positions than women. 3 2013 201 201 201 20171. 1.3 30 29 31 0 1.1 1.1 2 th percentile Median 7 th2 percentile 2 th percentile Median 7 th1.0 percentile 70 1 0. 0. 13 13 0. 10 12 0. 100 0
1 0.1 0 90 2013 201 201 201 2017 2013 201 201 201 2017 0 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 30 70 umber of Member
20 0
10 0 i u lloc tio s perce t ge o se s l r 0 0 3 0 2 0 2 0 2 70 72 7 7 30 00 umber of Member Age 20 Male emale 3 0 10 i u lloc tio s perce t ge o se s l r CEO average 0 300 Other executive board member average 3 3 0 2 0 2 0 2 70 72 7 7 00 Age 2 0 Male emale 3 0 CEO average 200 Source: Deloitte analysis 300 Other executive board member average 3 41 1 0 2 0 100 Other 1 9 200
0 inni h 2 1 0 erman 3 0 Iri h 2 100 rench 3 Other 1 9
0 inni h 2 orwegian erman 3 0 Iri h 2 American rench 3 Dani h
orwegian wedi h
ggreg te o r re u er tio American Briti h Dani h 7.1 . 7.0 . .7 wedi h .1 .9 . . .3 .0 .2 ggreg te o r re u er tio 201 . Briti h .0 .1 3. 7.1 . 7.0 201 . .7
DKKm .1 .9 201 . . .3 .0 .2 2017 201 . .0 .1 3. 201
DKKm 201 Average 2 th percentile Median 7 th percentile 1. 0 2017 1. 0
e u er tio o ch irperso s 1. 0 1. 1.9 Average 2 th percentile Median 7 th percentile 1. 01.20 1. 1. 1. 1. 1. 1. 1. 1. 01.00 1.3 1.3 1.3 201
e u er tio o ch irperso s DKKm 1. 00. 0 1.0 1.9 201 0.9 1. 0.9 0. 1.200. 0
DKKm 1. 1. 201 1. 1. 1. 1. 1. 1.000. 0 1.3 1.3 1.3 2017 201
DKKm 0. 00.20 1.0 201 0.9 0.9 0. 0. 0 -
DKKm 201 Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile chairper on chairper on chairper on 2017 0. 0
0.20
- Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile chairper on chairper on chairper on
3.0
2. 1
3.02.0 1
12 2. 1. DKKm 10 1 1.0 2.0 1 umber of Board 12 1. 0.
DKKm 10 2 0.0 1.0 0 1 2 3 7 9 10 11 12 13 1 1
1 column repre ent 1 chairper on umber of Board umber of board member 0.
2 0.0 0 1 2 3 7 9 10 11 12 13 1 1 Bo r e ers tot l h irperso s1 column repre ent 1 chairper on eput ch irperso s umber of board member
Bo r e ers tot l h irperso s eput ch irperso s
Male emale
Male emale lle sp lter lle sp lter lle sp lter
sp lter sp lter sp lter
ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge o se s l r le t right
12.2 7 11. 11. 1.2 1 10. 7 3 1.0
7.2 .9 . 3 .2 33 3 0. 27 27 .0 cto er u e u e 2 .0 3.9 Publication in the Propo al of law with 3. Implementation period 1 m 1 3.1 Official Journal of the preceding con ultation 1 13 K 0. 1.9 2.1 K European Union D
2013 201 201 201 2017 2013 201 201 201 2017 0.
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 0.2 2017 2018 2019 /
- Chair Deputy chair Other member
s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right Male emale u e epte er u e Effective date (20 days after The European Commi ion Effective in Denmark 7 . publication in the Official adopt implementing act at the late t 2 . ournal of the European at the late t 1 month month after Union after effective date) effective date) . .1 0 3.
37 2.9 30 32 2 2 2.2 2.2 2 2.0 1. 22 1. 20 2 1 1.1 0.9 0.
0 0.0 20 2013 201 201 201 2017 2013 201 201 201 2017
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 1
umber of Member 10
s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right
91 3.7 0 3 0 2 0 2 0 2 70 72 7 7
2.7 Age
7 2.3 1 2.0 1.
3 1. 30 31 1.3 29 1.1 2 1.1 1.0 1 0. 0. 13 13 0. 10 12 0. 100
1 0.1 90 2013 201 201 201 2017 2013 201 201 201 2017 0 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 70
Remuneration 0 in Danish Large Cap Companies | Board demographics
0
0
30 umber of Member
20
10 i u lloc tio s perce t ge o se s l r 0 3 0 2 0 2 0 2 70 72 7 7 00 Age
Male emale 3 0 CEO average
300 Other executive board member average 3 Nationality
2 0 169 member nationalities were disclosed (c. 47% of were Danish nationals, while Brits, Swedes, Americans all members from companies analysed). Of these 169 and Norwegians were the next largest groups, each
200 member nationalities, over half of board members making up 5% or more of the demographic.
1 0
100 Other 1 9
0 inni h 2 erman 3 0 Iri h 2
rench 3
orwegian
American
Dani h
wedi h
ggreg te o r re u er tio Briti h 7.1 . 7.0 . .7 .1 .9 . . .2 .3 .0 Source: Deloitte analysis 201 . *Note: includes 15 members from other nationalities .0 .1 3. 201
DKKm 201
2017
"We found that in 2017, the median board member serving Average 2 th percentile Median 7 th percentile on the 381. 0 companies analysed was male, Danish, aged 57 and compensated 1. 0 c. DKK 540k
e u er tio o ch irperso s 1. 0 1. 1.9 1.20 1. 1. 1. 1. 1. 1. 1.00 1.3 1.3 1.3 1. 201
DKKm 0. 0 1.0 201 0.9 0.9 0. 0. 0
DKKm 201 2017 0. 0 42 0.20
- Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile chairper on chairper on chairper on
3.0
2. 1
2.0 1
12 1.
DKKm 10
1.0 umber of Board 0.
2 0.0 0 1 2 3 7 9 10 11 12 13 1 1 1 column repre ent 1 chairper on umber of board member
Bo r e ers tot l h irperso s eput ch irperso s
Male emale lle sp lter lle sp lter lle sp lter lle sp lter lle sp lter lle sp lter sp lter sp lter sp lter sp lter sp lter sp lter
ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge o se s l r le t right ll e ecuti e irectors e elop e t i e rl lloc tio s s perce t ge o se s l r le t right 12.2 7 11. 11. 1.2 12.2 1 7 10. 11. 11. 1.2 7 1 3 10. 7 1.0 3 7.2 1.0 .9 . 3 .2 33 3 7.2 .9 . 0. 3 .0 .2 cto er 27 27 33 3 u e u e 2 0. .0 .0 3.9 Publication in the cto erPropo al of law with 27 27 3. u eImplementation u e period 1 2 m 1 .0 3.1 Official Journal of the preceding con ultation 3.9 K Publication in the Propo al of law with 1 3. 0. Implementation period
13 m 1 2.1 K European Union 1 1.9 3.1 Official Journal of the preceding con ultation K 1 13 D 0. 1.9 2.1 K European Union D 2013 201 201 201 2017 2013 201 201 201 2017 0. 2013 201 201 201 2017 2013 201 201 201 2017 0.
2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 0.2 2017 2018 2019 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 0.2 2017 2018 2019 /
- / Chair Deputy chair Other member - Chair Deputy chair Other member s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right Male emale u e epte er u e s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right Male emale Effective u e date (20 days after The epte er European Commi ion Effective u e in Denmark publication in the Official at the late t 2 7 . Effective date (20 days after Theadopt European implementing Commi ion act Effective in Denmark . ournal of the European at the late t 1 month month after . publication in the Official adopt implementing act at the late t 2 7 Union effective date) . ournal of the European atafter the effective late t 1 date) month month after . Union after effective date) effective date) .1 . 0 3. .1 0 3. 37 2.9 30 32 37 2.9 30 2 2 2.2 2.2 2 2.0 32 1. 2 2 22 2.21. 2.2 20 2 2.0 2 1. 1 22 1.1 1. 20 0.9 2 1 0. 1.1 0.9 0. 0 0.0 20 2013 201 201 201 2017 2013 201 201 201 2017 0 0.0 20 2013 201 201 201 2017 2013 201 201 201 2017 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 1 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 1
umber of Member 10
umber of Member 10
s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right s e elop e t i e rl lloc tio s s perce t ge o se s l r le t right 91 3.7 91 3.7 0 0 3 0 2 0 2 0 2 70 72 7 7 3 0 2 0 2 0 2 70 72 7 7 2.7 Age 2.7 7 2.3 Age 1 7 2.3 2.0 1. 1 2.0 1. 3 1. 1.3 30 29 31 1.1 1. 3 2 1.1 1.0 30 31 1.3 29 1.1 2 1 1.1 1.0 0. 0. 13 13 0. 10 1 12 0. 100 0. 0. 13 13 0. 10 12 0. 100 1 0.1 90 2013 201 201 201 2017 2013 201 201 201 2017 1 0.1 90 2013 201 201 201 2017 2013 201 201 201 2017 0 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 0 70 2 th percentile Median 7 th percentile 2 th percentile Median 7 th percentile 70 0 0 0 0 0 0 30 umber of Member 30 umber of Member 20 20 10 i u lloc tio s perce t ge o se s l r 10 0 i u lloc tio s perce t ge o se s l r 3 0 2 0 2 0 2 70 72 7 7 0 00 3 0 2 0 2 Age 0 2 70 72 7 7 00 Age Male emale 3 0 CEO average Male emale 3 0 CEO average 300 Other executive board member average 3 300 Other executive board member average 3 2 0 2 0 200 200 1 0 1 0 100 100 Other 1 9 Other 1 9 0 inni h 2 0 erman inni h 3 2 0 ermanIri h 2 3 0 Iri h 2 rench 3 rench 3 orwegian orwegian Remuneration in Danish Large Cap Companies | Board demographics American American Dani h
wedi h Dani h wedi h
ggreg te o r re u er tio Briti h ggreg te o r re u er tio 7.1 7.0 Briti h .7 . . 7.1 7.0 .1 . .9 . .7 . .1 . .9 .2 .3 . .0 . .3 201 . .0 .2 .0 .1 201 3. . 201 .0 .1 3. 201
DKKm In the following chart we look at the remuneration by a small margin. The average of the 19 international 201
DKKm of Danish and international chair and deputy deputy chairpersons were paid noticeably less than the 201 2017 chairpersons. Of the 8 Danish and 19 international average of the 9 Danish deputy chairpersons. Note that 2017 chairpersons where nationality was disclosed, the sample sizes are quite small and that companies we found that international chairpersons were vary in size significantly as does the remit of various remunerated better than their Danish counterparts boards which can explain some of the variations in pay. Average 2 th percentile Median 7 th percentile 1. 0 Average 2 th percentile Median 7 th percentile 1. 0 1. 0 1. 0 e u er tio o ch irperso s 1. 0 1.9 e u er tio o ch irperso s 1. 1. 0 1. 1.9 1.20 1. 1. 1. 1.20 1. 1. 1. 1. 1. 1. 1.00 1.3 1. 1. 1.3 1.3 1. 1. 201 1.00 1.3 1.3 1.3 1. 201 DKKm 0. 0 201
1.0 DKKm 0.9 0. 0 0.9 0. 1.0 201 0.9 0. 0 DKKm 0.9 0. 201 0. 0
DKKm 201 2017 0. 0 2017 0. 0 0.20 0.20 - Dani h chairper on International Dani h deputy International deputy Average 2 th percentile Median 7 th percentile - Dani h chairper on chairper on International Dani hchairper on deputy Internationalchairper on deputy Average 2 th percentile Median 7 th percentile chairper on chairper on chairper on Source: Deloitte analysis
Board sizes 3.0 We have also looked at the size of company boards and from three members to 15 members. The median 3.0 note there is a considerable variation in size ranging board size was nine members. 2. 2. 1 1 2.0 1 2.0 1 12 1. 12
DKKm 10 1.
DKKm 10 1.0 1.0 umber of Board
0. umber of Board 0. 2 0.0 2 0 0.0 1 2 3 7 9 10 11 12 13 1 1 1 column repre ent 1 chairper on 0 1 2 3 umber7 of board member 9 10 11 12 13 1 1 1 column repre ent 1 chairper on Source: Deloitte analysis umber of board member
43 Bo r e ers tot l h irperso s eput ch irperso s Bo r e ers tot l h irperso s eput ch irperso s
Male emale Male emale Remuneration in Danish Large Cap Companies | How can Deloitte help?
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44 Remuneration in Danish Large Cap Companies | Our contacts
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45 Remuneration in Danish Large Cap Companies | xxxxx
Appendix
Companies included in the analysis
A.P. Møller - Mærsk A/S NKT Holding A/S ALK-Abelló A/S Nordea Bank AB Alm. Brand A/S Novo Nordisk A/S Ambu A/S Novozymes A/S Carlsberg A/S Pandora A/S Chr. Hansen Holding A/S Rockwool International A/S Coloplast A/S Royal Unibrew A/S Danske Bank A/S Scandinavian Tobacco Group A/S DFDS A/S Schouw & Co A/S DSV A/S SimCorp A/S FLSmidth & Co A/S Spar Nord Bank A/S G4S PLC Sydbank A/S Genmab A/S TDC A/S GN Store Nord A/S Topdanmark A/S H. Lundbeck A/S Tryg A/S ISS A/S Vestas Wind Systems A/S Jeudan A/S William Demant Holding A/S Jyske Bank A/S Ørsted A/S Københavns Lufthavne A/S Össur hf Nilfisk Holding A/S
46 Remuneration in Danish Large Cap Companies | sss
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