REMUNERATION REPORT
WE CARE
Main developments in 2022
Financial summary 2022
The Group's vision is to be the leading and most profitable global supplier of sustainable, high-quality seafood by means of an efficient and sustainable value chain.
Recent years have been significantly impacted by restrictions related to the Covid-19 pandemic. As the restrictions were lifted in 2022, there was a significant increase in the demand for seafood from the HoReCa market (Hotels, restaurants and catering), while retailers were defending their increased markets shares. This dynamic gave a major increase in demand for seafood and the Group's products, while it also gave a lack in other areas such as goods, logistics and employees which contributed to a significant inflation also in costs.
The Group´s revenue was up 15%, from NOK 23.0 billion in 2021 to NOK 26.6
billion in 2022. The Group's return on capital employed and operating profit/loss before fair value adjustment of biomass are important metrics for return and earnings. Return on capital employed before fair value adjustment increased from 12.4% in 2021 to 14.5% in 2022. The operating profit before fair value adjustment was up from NOK 2,519 million in 2021 to NOK 3,195 million in 2022.
The operating profit from the Group's whitefish operations before biomass adjustment increased from NOK 340 million in 2021 to NOK 347 million in 2022. This development despite lower quotas, but supported by strong price development and operational improvements.
The growth in sea in the Group´s Farming segment was below expectations in the second half of 2022, leading to a reduction in the harvest volume of salmon and trout
from 187 thousand tonnes in 2021 to 171 thousand tonnes in 2022. There was a significant inflation in costs, increasing the cost per harvested kilo, but higher price realisation led to an operating profit before biomasse adjustment from NOK 1,768 million in 2021 to NOK 3,145 million in 2022.
2022 proved a very challenging year for the Group's VAPS&D segment. Higher prices led to an increase in revenue of 16% from NOK 22,0 billion in 2021 to NOK 25,5 billion in 2022. However, a significant price increase on input factors in production and logistics put pressure on profitability. The operating profit before biomasse adjustment fell from NOK 630 million in 2021 to NOK 156 million in 2022.
Development in remuneration of board members
At the Annual General Meeting in 2022, chairman Helge Singelstad abstained from participating in the election, and board member Arne Møgster was elected as chairman for a period of two years. Following the board is made up of six members, one of whom is the employee representative.
The Annual General Meeting in 2022 decided to increase the remuneration for the chairman from NOK 400,000 to NOK 500,000, and for board members from NOK 250,000 to NOK 300,000.
The Board of Directors has a subcommittee: the Audit Committee. Didrik Munch is the chair of the Audit Committee and Britt Kathrine Drivenes is a member. The volume of work for the Audit Committee has increased significantly in recent years, and the Annual General Meeting in 2022 made the decision to increase
remuneration of the Audit Committee's chairman to NOK
120,000 and to increase remuneration for the committee member to NOK 80,000. This compensation is in addition to the directors' remuneration.
Lerøy Seafood Group ASA has a Nomination Committee, with three members. The Annual General Meeting in 2022 made no changes in the remuneration of NOK 45,000 per member of the Nomination Committee.
Development in remuneration of Group management
The Group´s management has expanded in recent years. Until 2019, the management comprised three members: CEO, COO Farming and CFO. This was then increased to five members, including the COO VAPS&D and CHRO.
There were no changes in the Group´s management in 2022.
2022 | 2021 | 2020 | 2019 | 2018 | |
Revenue (NOKm) | 26 646 | 23,073 | 19,960 | 20,427 | 19,838 |
Growth in revenue (%) | 15 % | 16 % | -2 % | 3 % | 7 % |
EBITDA before fair value adj. of biomass (NOKm) | 4 521 | 3,778 | 3,109 | 3,746 | 4,288 |
EBIT before fair value adj. of biomass (NOKm) | 3 195 | 2,519 | 1,950 | 2,734 | 3,569 |
Pre-tax profit before fair value adj. of biomass (NOKm) | 2 967 | 2,440 | 1,869 | 2,718 | 3,697 |
ROCE before fair value adjustment | 14.5% | 12.4% | 10.5% | 15.5% | 22.3% |
No. full-time equivalents | 5092 | 4953 | 4293 | 4361 | 4589 |
Average salary based on full-time equivalents | 583 | 544 | 566 | 542 | 472 |
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Remuneration principles and framework
In May 2021, the Annual General Meeting adopted the Group's Guidelines for salaries and other remuneration of persons in senior positions. The Guidelines can be found on the Group's website at www. leroy.no and are described briefly below. The Guidelines steer remuneration of the Group´s management and the Board of Directors.
The main principle for executive pay at Lerøy is that the Group shall attract and retain talented managers without being wage leaders in the industry.The variable element of a salary shall not represent such a large share of the total salary as to may result in unfortunate incentives and short-termism at the cost of the Group's targets.
Lerøy's values - open, honest, responsible and creative - shall lay the foundations for the Group's daily operations, and also for the perpetual, strategic business development required to achieve its vision of being the leading and most profitable global supplier of sustainable, high-quality seafood. Being a leading player in a global industry and safeguarding the Group's long-term interests are closely linked to the company's ability to recruit, develop and retain senior executives. Lerøy's people are the Group´s most important resource. Lerøy shall be a recognised and attractive employer in the seafood industry, with the capacity to attract employees with the appropriate competencies. It is important that the
Group succeed in building a learning and dynamic organisation where employees are happy and develop, so that they work together to meet our customers' needs.
Lerøy has established a remuneration scheme intended to stimulate the achievement of goals and at the same time promote good risk management and help prevent conflicts of interest. The Group's long-term interests and financial capacity shall be safeguarded.
Remuneration of members of the Board of Directors.
The remuneration of the board members is proposed by the Group's Nomination Committee and adopted by the Annual General Meeting in accordance with section 6-10 of the Public Limited Liability Companies Act. The Board members do not have a scheme for allocation of options to purchase shares in the Group.
Remuneration of executive personnel
The Remuneration of the Group CEO is determined annually by the Chairman of the Board according to a mandate issued by the board. Remuneration of the individual members of the Group management is determined by the CEO in consultation with the Chairman of the Board. The Board of Directors is subsequently informed of the decision.
General schemes for payment of variable benefits, including bonus schemes, are established by the Board of Directors as part of its
budget work. The Group CEO allocates such incentive schemes and other benefits to the Group's senior executives within the boundaries established by the Board. The board does not have a remuneration committee.
Regarding the remuneration of senior executives, the company mainly focuses on fixed salary as an instrument, and uses variable remuneration other than bonuses to a limited degree. Executive pay shall be competitive, so that the company is able to attract and retain the most talented managers. The fixed remuneration of senior executives shall include:
Base salary:
The base salary is established based on the basis of the responsibilities, complexity, competencies and length of service for the position. The base salary is normally the main element of executive pay.
Bonus scheme:
In principle, bonuses are a form of profit sharing, where members of the management are remunerated for their contribution to the company's long-term earnings and development. The purpose of Lerøy's bonus scheme is to stimulate continuous development of Lerøy's value creation, growth and results, as defined in the company strategy.
Assessment of bonus payments is carried out every year based on a
comprehensive discretionary evaluation of five components: the executive's value creation, efforts, results, values, and attitudes and conduct, all in relation to the defined goals, tasks and available resources implied in the position.
At the end of the measurement period, a decision is made regarding the extent to which the criteria for a bonus payment have been met. This evaluation shall be based on an assessment of the criteria as described above and in the bonus schemes for senior executives.
Bonus payments to persons in senior positions may comprise up to one year's salary.
The company does not have any scheme for reclaiming variable remuneration. The Board of Directors has the right to make changes to or terminate the bonus scheme on a yearly basis.
Other remuneration
-
Pension schemes:
Lerøy Seafood Group ASA has a defined-contribution pension scheme according to the Act relating to mandatory occupational pensions. The base for premium payments is capped at maximum 12G (G is the national insurance base amount) per year. Senior executives in the Group are members of the company's collective pension
scheme up to the Group's | • Share purchase programmes: | |
in-house retirement age, which is | Lerøy is entitled to assess a | |
70, and do not have separate | share-savings programme for all | |
agreements that include early | employees, where employees | |
retirement or supplementary | have the right to subscribe to a | |
pensions. The company may, | limited number of shares at a | |
however, enter into such | discounted price. | |
agreements in the future. | ||
In extraordinary circumstances | ||
• | Severance pay: | when significant events require |
In principle, the company does not | senior executives to make | |
make use of severance pay apart | extraordinary efforts, the board | |
from salary during the period of | may decide to deviate from these | |
notice for the number of months | guidelines. The Board is not | |
stipulated in the provisions of the | entitled to deviate from the | |
Working Environment Act. | guidelines in relation to | |
Severance pay may, however, be a | remuneration of Board members. | |
good alternative in some | If necessary, such deviations shall | |
situations for all parties involved. | be proposed and presented to | |
Severance pay can therefore be | the Annual General Meeting for a | |
utilised in extraordinary | general vote. There were no such | |
circumstances, albeit capped at | deviations in 2022. | |
two annual salaries. | ||
• | Other special remuneration: | |
Senior executives may receive | ||
other special remuneration that | ||
is normal for comparable | ||
positions, such as free telephone, | ||
PC at home, free broadband, | ||
newspapers, company car/car | ||
scheme and parking. |
• Options and other types of remuneration linked to shares or developments in the share price: The company does not currently give persons in senior positions options or other types of remuneration linked to shares in the company or developments in the share price.
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Earned and received remuneration of Group management
Earned remuneration of Group management
Remuneration element to management in 2021
Please refer to the previous comments on the different elements included in the salaries paid to Group management. There will be deviations between when the remuneration is earned and when it is disbursed. The following table shows
when the remuneration was earned.
In light of Norway's holiday pay scheme, fixed salary is paid as 11/12 of the agreed salary. With the exception of the CEO, bonuses are included in the holiday pay base amount.
The bonuses for 2022 are also specified in the table. These figures show the provision for bonuses in the Group's financial statements for 2022. Final bonus payments may vary from these figures.
Payment | Purpose | Level | Disbursement criteria | Period |
element | ||||
Fixed salary / | Attract, retain and | Attractive, but not wage | None, but fixed salary | Annual, but paid as 11/12 |
Base salary | develop talented | leaders in the industry | will normally be adjusted | of the amount, as the last |
managers | annually | month is paid as holiday | ||
pay | ||||
Bonus | Harmonising the Group's | Up to one year's salary | Evaluation of the | Annual |
interests with those of | executive's value creation, | |||
senior executives for | efforts, results, values, | |||
perpetual, strategic | and attitudes and | |||
business development | conduct, all in relation to | |||
required so that Lerøy can | the defined goals, tasks | |||
achieve its vision | and available resources | |||
implied in the position | ||||
Holiday pay | Part of the pay system in | Holiday pay normally | The holiday pay base | The annual payment is |
Norway. | amounts to 12% of the | amount accrues over | in June, as the employee | |
holiday pay base amount. | one year, and payment | does not receive salary in | ||
The holiday pay base | is made in the holiday | July. (Fixed salary is paid | ||
amount includes fixed | month the following year. | in 11 of the 12 months of | ||
salary and bonuses, | the year) | |||
unless otherwise agreed. |
Name and position | 2022 | 2021 | 2020 | 2019 | 2018 |
Henning Beltestad (CEO) | |||||
Fixed salary | 3 500 000 | 3 208 333 | 3 000 000 | 3 000 000 | 3 000 000 |
Deduction from salary for holiday | -331 439 | -284 091 | -284 091 | -284 091 | -284 091 |
Bonus incl. holiday pay | 3 400 000 | 3 400 000 | 3 300 000 | 3 300 000 | 3 300 000 |
Holiday pay | 380 100 | 350 909 | 325 909 | 325 909 | 325 909 |
Pension expense | 159 191 | 151 239 | 149 501 | 144 285 | 139 070 |
Other benefits | 8 964 | 11 000 | 11 000 | 11 000 | 16 000 |
Total earned this year | 7 116 815 | 6 837 390 | 6 502 319 | 6 497 104 | 6 496 888 |
Siren Grønhaug (COHR) | |||||
Fixed salary | 1 787 771 | 1 698 834 | 1 627 200 | 1 466 667 | |
Deduction from salary for holiday | -165 720 | -154 091 | -151 515 | -133 333 | |
Bonus | 1 200 000 | 1 120 000 | 1 000 000 | 1 000 000 | |
Holiday pay | 324 472 | 305 369 | 295 994 | 160 000 | |
Pension expense | 160 537 | 151 239 | 150 501 | 117 285 |
Pension | The Group focuses on a |
long-term perspective, | |
and it must be | |
attractive to remain | |
an employee with the | |
Group throughout the | |
employee's career. |
Defined-contribution pension scheme whereby the Group pays contributions to the employee's personal pension account. The Group pays pension contributions up to 12G (G is the national insurance base amount in Norway; 1G in 2022 is NOK 111,477).
Fixed salary and bonus, but the Group does not pay contributions for compensation exceeding 12G. A 2% deduction
is made from the employee's fixed salary up to 12G.
Other benefits | 8964 | 30 000 | 22 000 | 10 000 |
Total earned this year | 3 316 024 | 3 151 351 | 2 944 179 | 2 620 619 |
Other benefits | Compensation for | Based on actual |
minor expenses related | documented expenses | |
to work. Typically | ||
Internet connection, | ||
mobile telephone and | ||
newspapers |
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Name and position | 2022 | 2021 | 2020 | 2019 | 2018 |
Sjur S. Malm (CFO) | |||||
Fixed salary | 2 517 999 | 2 437 800 | 2 400 000 | 2 341 667 | 2 300 000 |
Deduction from salary for holiday | -233 409 | -227 273 | -227 273 | -217 803 | -217 803 |
Bonus | 2 200 000 | 2 053 571 | 1 785 714 | 1 964 285 | 1 785 714 |
Holiday pay | 512 375 | 479 549 | 496 442 | 471 149 | 464 150 |
Pension expense | 159 223 | 152 239 | 153 501 | 147 285 | 141 070 |
Other benefits | 8 964 | 21 000 | 10 000 | 10 000 | 12 000 |
Total earned this year | 5 165 151 | 4 916 886 | 4 618 384 | 4 733 462 | 4 485 131 |
Ivar Wulff (COO VAPS&D) | |||||
Fixed salary | 1 992 088 | 1 900 250 | 1 830 600 | 1 650 000 | |
Deduction from salary for holiday | -184 659 | -173 352 | -170 455 | -150 000 | |
Bonus | 1 200 000 | 1 120 000 | 1 000 000 | 1 000 000 | |
Holiday pay | 346 661 | 327 228 | 317 993 | 180 000 | |
Pension expense | 158 883 | 149 239 | 147 501 | 114 285 | |
Other benefits | 8 964 | 30 000 | 24 000 | 14 000 | |
Total earned this year | 3 521 886 | 3 353 365 | 3 149 639 | 2 808 285 | |
Bjarne Reinert (COO Farming) | |||||
Fixed salary | 2 043 166 | 2 000 000 | |||
Deduction from salary for holiday | -189 394 | -189 394 | |||
Bonus | 1 200 000 | 1 120 000 | |||
Holiday pay | 352 208 | 242 317 | |||
Pension expense | 158 997 | 150 239 | |||
Other benefits | 8 964 | 11 000 | |||
Total earned this year | 3 573 941 | 3 334 162 |
Name and position | 2022 | 2021 | 2020 | 2019 | 2018 |
Stig Nilsen (COO Farming) | |||||
Fixed salary | 2 400 000 | 2 400 000 | 2 400 000 | ||
Deduction from salary for holiday | -319 580 | -181 119 | -273 427 | ||
Bonus | 1 517 857 | 1 517 857 | 1 700 000 | ||
Holiday pay | 534 353 | 534 353 | 304 100 | ||
Pension expense | 146 501 | 142 285 | 137 070 | ||
Other benefits | 136 000 | 135 000 | 110 000 | ||
Total earned this year | 4 415 130 | 4 548 376 | 4 377 744 | ||
Webjørn Barstad (COO Wildcatch) | |||||
Fixed salary | 2 300 000 | 2 300 000 | 2 200 000 | ||
Deduction from salary for holiday | -217 803 | -217 803 | -208 333 | ||
Bonus | 2 000 000 | 1 500 000 | |||
Holiday pay | 466 863 | 425 863 | 371 000 | ||
Pension expense | 107 000 | 97 000 | 97 000 | ||
Other benefits | 11 000 | 12 000 | 20 000 | ||
Total earned this year | 2 667 060 | 4 617 060 | 3 979 667 |
Bjarne Reinert | 63% | 37% | |||||||||||||||
Ivar Wulff | 62% | 38% | |||||||||||||||
Sjur S. Malm | 53% | 47% | |||||||||||||||
Siren Grønhaug | 60% | 40% | |||||||||||||||
Henning Beltestad | 52% | 48% | |||||||||||||||
0 | 10 | 20 | 30 | 40 | 50 | 60 | 70 | 80 | 90 | 100 | |||||||
Fixed salary | Variable salary | ||||||||||||||||
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Lerøy Seafood Group ASA published this content on 04 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 May 2023 12:02:11 UTC.