REMUNERATION REPORT
2021
Remuneration Report 2021
CARLSBERG GROUP
REMUNERATION
REPORT
CARLSBERG GROUP REMUNERATION REPORT 2021 | 2 |
The fundamentals of our business continue to be strong, and we're looking forward to the next stage of our strategic journey.
Richard Burrows
Chair of the Remuneration Committee
The Carlsberg Group's
Remuneration Policy balances our short-term and long-term performance, taking into consideration our business strategy, our purpose of brewing for a better today and tomorrow, and our aim to deliver value for shareholders.
2021 was a strong year for the Carlsberg Group despite the continued challenges posed by COVID-19. As was the case in 2020, our main focus remained the health
and wellbeing of our people and at the same time ensuring the health of our business.
Performance against our key financial metrics was strong, and ongoing cost mitigation efforts continue to enable us to reinvest in marketing spend and other growth- focused activities.
In 2021, the Supervisory Board increased the weighting of Environmental, Social and Governance (ESG) performance in
the annual bonus plan to 20%, with the focus being to deliver against our Together Towards ZERO targets and build a more diverse and inclusive workplace.
Accordingly, annual incentive payments to the Executive Board recognise this performance and the strong delivery of our annual business plan against the tough external trading environment.
Longer term, in the three-year period ending in 2021, the business fundamentals and results continued to be very strong. Total shareholder return was above the upper quartile against the peer group. ROIC and earnings per share developed strongly, even with significant headwinds in 2020.
The variable remuneration of the Executive Board for 2021 reflects the strong performance of the key business metrics, including the share price, which were above or around pre-COVID levels despite the continued very difficult operating environment.
LOOKING AHEAD
As of 2022, our focus will shift beyond SAIL'22 onto the next phase of our strategic journey: SAIL'27. The Supervisory Board will continue to review incentive arrangements to ensure that our plans support the short- and long-term strategic vision of the Carlsberg Group.
In particular, the Board will continue to focus on the ever-increasing ambition of the Company in regard to ESG. Accordingly, the Remuneration Committee has agreed to make ESG a standing item on the Committee's agenda and will review whether it would be appropriate to
Group performance
Performance indicator | 2021 | 2020 | 2019 | 2018 | 2017 | ||||||||
Volume, organic growth | +7.4% | -3.8% | +0.1% | +4.8% | -2% | ||||||||
Revenue, organic growth | +10.0% | -8.4% | +3.2% | +6.5% | +1% | ||||||||
Operating profit, organic growth | +12.5% | -3.1% | +10.5% | +11.0% | +8.4% | ||||||||
Operating margin, reported | 16.3% | 16.6% | 15.9% | 14.9% | 14.6% | ||||||||
Free cash flow, DKKm | 8,876 | 5,057 | 9,962 | 6,156 | 8,680 | ||||||||
Return on invested capital (ROIC) | 10.3% | 8.9% | 8.8% | 8.1% | 6.9% | ||||||||
The remuneration outlined in this report complies in full with the Carlsberg Group's approved Remuneration Policy.
also include ESG in the long-term incentive from 2023, which will be the first effective year of SAIL'27.
REMUNERATION COMMITTEE
The Carlsberg Group's remuneration approach is set out in the Remuneration Policy. It is designed to enable recruitment and retention of individuals with the expertise and ability required to run a growing international company, and to do so in a way that drives our business success and rewards executives when shareholders are rewarded. Levels of fixed remuneration are set based on individuals' experience and contribution, and in the context of the external market.
While we do not seek to adhere rigidly to market benchmarks, we monitor and take into account pay
Remuneration Committee meetings
levels and incentive opportunities in the principal markets from which we recruit: our European brewing and spirits peers, the consumer goods sector, as well as companies across industry sectors in the Nordic region.
Many of our investors - including our majority shareholder - are long- term holders of our shares. We want our executives to share our shareholders' perspective and believe remuneration should align their interests accordingly. The balance between the short-term remuneration package and long-termshare-based pay and shareholding requirements strengthens this alignment.
The Remuneration Committee did not propose any changes to the pay
structure in 2021 and confirms that there were no deviations from the Remuneration Policy in 2021.
The Company's full Remuneration Policy for the Supervisory Board and Executive Board as well as guidelines for incentive programmes as approved at the Annual General Meeting on 16 March 2020 are available on the Company's website.
MAIN ACTIVITIES IN 2021
In 2021, the main activities of the Remuneration Committee were:
• Preparing the 2020 Remuneration |
Report in line with new reporting |
standards under the EU Shareholder |
Rights Directive. |
• Increasing the weighting of ESG |
in the short-term incentive plan |
from 2021 onwards as well as |
considering inclusion in the long- |
term incentive. |
• Amending the peer group for total |
shareholder return to better align |
with our most direct industry peers |
(see page 7 for full peer group). |
CARLSBERG GROUP REMUNERATION REPORT 2021 | 3 |
THE COMMITTEE'S RESPONSIBILITIES
The Carlsberg Group's Remuneration Committee is responsible for the Remuneration Policy (including the general guidelines for incentive programmes) for all members of the Supervisory Board and the Executive Board, for making proposals on changes to the Remuneration Policy, and for obtaining the approval of the Supervisory Board prior to seeking shareholders' approval at the Annual General Meeting.
The Committee is responsible for making proposals to the Supervisory Board on the actual structure and content of the remuneration packages of members of the Supervisory Board and the Executive Board, in accordance with the policy approved by the shareholders.
The Committee advises the Supervisory Board on any major changes to the policy on senior employee remuneration structures for the Group, including for
Committee member | Committee meetings attended |
Richard Burrows (Chair)
Magdi Batato1
Domitille Doat-Le Bigot1
Søren-Peter Fuchs Olesen
Henrik Poulsen1
Flemming Besenbacher2
- Independent. 2 Not a member of the Committee; attends meetings in his capacity as Chair of the Supervisory Board.
Attended meeting. Not a Committee member at the time.
• Reviewing the approach to target |
setting for, and ongoing |
performance against, STI and LTI |
plans in light of the uncertain |
business environment. |
• Considering the incentive |
arrangements in light of the |
developing future business strategy. |
the Executive Committee. The Committee's Terms of Reference, which govern how it operates, are approved by the Supervisory Board and are available on the Company's website.
CARLSBERG GROUP REMUNERATION REPORT 2021 | 4 |
REMUNERATION OF THE SUPERVISORY BOARD
The members of the Supervisory Board of Carlsberg A/S are remunerated for duties performed in the Company.
The remuneration of the Supervisory Board consists of a fixed annual base fee. The Chair receives a single fee of four-and-a-half times the base fee and no additional fees for any committee work.
The fees are reviewed, but not necessarily increased, each year, taking into account market practice with reference to an international peer group, as well as the need to
attract and retain high-calibre individuals.
Members of the Supervisory Board are not included in share incentive programmes, retirement benefit plans or other benefit plans.
REMUNERATION IN 2021
The remuneration of the Supervisory Board for 2021 was approved by the Annual General Meeting on 15 March 2021.
The fees for members of the Supervisory Board for the financial year 2021 and additional fees are shown in the table on page 5.
BOARD SHAREHOLDINGS
The number of shares in Carlsberg A/S held by Supervisory Board members, including holdings of related parties, is shown in the table below.
No member of the Supervisory Board owns shares or bonds in any of the subsidiaries or associates of Carlsberg A/S.
Supervisory Board remuneration | |||||||||||
Base fee | Additional fee | ||||||||||
(DKK | (as % of base | ||||||||||
thousand) | fee) | ||||||||||
All Supervisory Board members | 412 | ||||||||||
Chair of the Supervisory Board | 350% | ||||||||||
Deputy Chair of the Supervisory Board | 50% | ||||||||||
Chair of the Audit Committee | 113% | ||||||||||
Chair of the Remuneration Committee and of the | |||||||||||
Nomination Committee | 50% | ||||||||||
Member of board committee (per committee) | 38% | ||||||||||
Supervisory Board committee membership | |||||||||||
Audit | Nomination | Remuneration | |||||||||
Flemming Besenbacher (Chair) | Chair | ||||||||||
Henrik Poulsen (Deputy Chair) | Member | Member | Member | ||||||||
Carl Bache | Member | ||||||||||
Magdi Batato | Member | Member | |||||||||
Lilian Fossum Biner | Chair | ||||||||||
Richard Burrows | Member | Member | Chair | ||||||||
Lars Fruergaard Jørgensen | Member | ||||||||||
Søren-Peter Fuchs Olesen | Member | ||||||||||
Supervisory Board members' holdings of shares in Carlsberg A/S
Number | DKK million | |||||
1 Jan. 2021 | Additions | Sold | 31 Dec. 2021 | Market value | ||
Flemming Besenbacher | B shares | 1,850 | 200 | - | 2,050 | 2.32 |
Henrik Poulsen1 | B shares | - | 3,056 | - | 3,056 | 3.45 |
Hans Andersen | B shares | 1 | - | - | 1 | - |
Carl Bache | B shares | - | - | - | - | - |
Magdi Batato | B shares | 101 | 100 | - | 201 | 0.23 |
Lilian Fossum Biner | B shares | 250 | - | - | 250 | 0.28 |
Richard Burrows | B shares | 2,040 | - | - | 2,040 | 2.30 |
Eva Vilstrup Decker | B shares | 68 | - | - | 68 | 0.08 |
Lars Fruergaard Jørgensen | B shares | 152 | - | - | 152 | 0.17 |
Finn Lok | B shares | - | - | - | - | - |
Erik Lund | B shares | 54 | - | - | 54 | 0.06 |
Søren-Peter Fuchs Olesen | B shares | 652 | - | - | 652 | 0.74 |
Peter Petersen | B shares | - | - | - | - | - |
Majken Schultz | B shares | - | - | - | - | - |
Lars Stemmerik | B shares | - | - | - | - | - |
Total | 5,168 | 3,356 | - | 8,524 | 9.63 | |
1 Shareholding acquired prior to joining the Supervisory Board |
CARLSBERG GROUP REMUNERATION REPORT 2021 | 5 |
CHANGES IN SUPERVISORY BOARD REMUNERATION
In 2021, the remuneration of Lars Fruergaard Jørgensen decreased by DKK 0.25m as he stepped down as Deputy Chair and from the Audit Committee during 2021.
Henrik Poulsen joined the Supervisory Board during 2021.
Remuneration of the Supervisory Board | ||||||||
2021 | ||||||||
Additional | ||||||||
DKK million | Base fee | Fee | Total fee | Change | 2020 | Change | 2019 | Change |
Flemming Besenbacher | 0.41 | 1.44 | 1.85 | - | 1.85 | - | 1.85 | - |
Henrik Poulsen | 0.33 | 0.53 | 0.86 | - | - | - | - | - |
Hans Andersen | 0.41 | - | 0.41 | - | 0.41 | - | 0.41 | - |
Carl Bache | 0.41 | 0.16 | 0.57 | - | 0.57 | - | 0.54 | 38% |
Magdi Batato | 0.41 | 0.32 | 0.73 | - | 0.73 | - | 0.69 | 28% |
Lilian Fossum Biner1 | 0.41 | 0.47 | 0.88 | - | 0.82 | 54% | 0.45 | - |
Richard Burrows | 0.41 | 0.52 | 0.93 | - | 0.99 | -25% | 1.15 | 33% |
Eva Vilstrup Decker | 0.41 | - | 0.41 | - | 0.41 | - | 0.41 | - |
Lars Fruergaard Jørgensen | 0.41 | 0.23 | 0.64 | -39% | 0.89 | 20% | 0.62 | - |
Finn Lok | 0.41 | - | 0.41 | - | 0.41 | - | 0.41 | - |
Erik Lund | 0.41 | - | 0.41 | - | 0.41 | - | 0.41 | - |
Søren-Peter Fuchs Olesen | 0.41 | 0.16 | 0.57 | - | 0.57 | - | 0.54 | 38% |
Peter Petersen | 0.41 | - | 0.41 | - | 0.41 | - | 0.41 | - |
Majken Schultz | 0.41 | - | 0.41 | - | 0.41 | - | 0.33 | - |
Lars Stemmerik | 0.41 | - | 0.41 | - | 0.41 | - | 0.41 | - |
Total | 6.07 | 3.83 | 9.90 | - | 9.29 | - | 8.63 | - |
Remuneration of former | ||||||||
members | 0.15 | - | 0.15 | - | 0.57 | - | 0.96 | -31% |
Total incl. former members | 6.22 | 3.83 | 10.05 | 2% | 9.86 | 6% | 9.59 | -4% |
2018 | Change | 2017 | ||
1.85 | - | 1.85 | ||
- | - | - | ||
0.41 | - | 0.41 | ||
0.41 | - | 0.41 | ||
0.46 | - | - | ||
- | - | - | ||
0.90 | 20% | 0.77 | ||
0.41 | - | 0.41 | ||
- | - | - | ||
0.41 | - | 0.41 | ||
0.41 | - | 0.41 | ||
0.41 | - | 0.41 | ||
0.41 | - | 0.41 | ||
- | - | - | ||
0.41 | - | 0.41 | ||
6.49 | - | 5.90 | ||
2.86 | 3% | 3.68 | ||
9.35 | 7% | 9.58 | ||
Figures shown in the table are the actual amounts paid to Supervisory Board members in each of the past five years. The percentage change indicated is based on annualised figures, meaning only increases attributable to an actual change in fees and/or appointments/departures from committees are represented in the "% change" column.
- The company additionally pays mandated employer contributions to Swedish social security for Lilian Fossum Biner, which are not included in this table.
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Carlsberg A/S published this content on 04 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 February 2022 14:25:32 UTC.