Report on remuneration of leading persons
2023
Table of contents | ||
1.0. | Introduction | 3 |
2.0. | Elements of remuneration | 4 |
2.1. Total remuneration for 2023 and 2022 | 4 | |
2.2. Shares awarded or due for the reported financial year | 7 | |
3.0. Performance in the reported financial year | 9 | |
4.0. | Compliance and governance | 10 |
5.0. Annual changes of remuneration and the company's results | 13 | |
6.0. Shareholder vote on guideline | 14 | |
7.0. | Independent auditor's assurance report | 15 |
Report on remuneration of leading persons | Page 2 |
Report on remuneration of leading persons 2023
OKEA ASA presents the 2023 report on remuneration as approved by the board of directors on 4 April 2024. The report is designed to comply with the provisions of the Public Limited Liability Companies Act § 6-16a and b, and 5-6 third paragraph, supplemented by the regulations on guidelines and reports on remuneration of leading personnel, as well as to provide a transparent account of remuneration of leading persons to our shareholders and other stakeholders in line with Norwegian practice and principles for good governance. The report is based on the guideline on remuneration approved by shareholders at the annual general meeting on 11 May 2023 and will be presented to the annual general meeting scheduled for 14 May 2024. The guideline on remuneration is available on www.okea.no/investors. Norwegian legislation also requires that the annual financial report includes certain information on remuneration in the notes to the financial statements. This information is included in note 10 to the financial statements.
1.0. Introduction
2023 was an eventful year for OKEA with solid operational performance from operated assets, while adverse developments on Yme and in relation to the acquisition of Statfjord assets caused large impairments.
OKEA delivered on the growth strategy launched in the fall of 2021 by adding 28% WI in the Statfjord area (PL037, comprising 23.93123% WI in Statfjord Unit, 28% WI in Statfjord Nord, 14% WI in Statfjord Øst Unit and 15.4% WI in Sygna Unit) through a transaction with Equinor. The transaction was completed in December with effective date 1 January 2023.
OKEA's clear ambition is to deliver competitive shareholder returns driven by solid growth, value creation and capital discipline, and the strategy will be centred around three growth levers:
- actively pursue further value creation in current portfolio,
- pursuing mergers and acquisitions to add new legs to the portfolio, and
- considering organic projects either adjacent to existing hubs or pursuing new hubs, dependent on financial headroom and attractive risk-reward.
Ida Ianssen Lundh was appointed interim senior vice president for subsurface on 1 September and filled the position permanently from 1 January 2024, replacing Andrew McCann who left the position on 31 August. Ms Lundh formerly held the position of vice president business development.
There were no other changes in the OKEA senior management team during the year.
At the general meeting held on 11 May 2023 there were several changes to the board of directors and the committees. Grethe Moen and Saowapap Sumeksri was not proposed
Report on remuneration of leading persons | Page 3 |
for re-election after their service period ended. In addition to this, Paul Murray stepped down. Additions to the board of directors at the general meeting include Jon Arnt Jacobsen, Phatpuree Chinkulkitnivat and Elizabeth Williamson. For the employee elected and deputy members the following changes was made through election: Sverre Nes, Ragnhild Aas and Per Magne Bjellvåg replaced John Kristian Larsen, Jan Atle Johansen and Anne Lene Rømuld as board members. As deputy members Harmonie Wiesenberg, Jan Atle Johansen and Gry Anette Haga replaced Ragnhild Aas, Jens Arne Megaard and Gro Anita Markussen. Mike Fischer was elected as vice chair of the board at the general meeting.
For more background information see the board of director's report.
The guideline on remuneration approved by the general meeting in 2023 was consistent with previous practice and policies in the company.
- Elements of remuneration
- Total remuneration for 2023 and 2022
Table 1a below provides information on total remuneration of each individual leading person split by various components. Compensation in the form of salaries, bonuses and fees is included in the year paid. Other compensation is included as incurred.
Report on remuneration of leading persons | Page 4 |
Table 1a - Remuneration of CEO and senior management for the reported financial year
All amounts are in NOK 1000
1 | 2 | 3 | 4 | 5 | 6 | |||||
Fixed | Variable | Extra- | Pension | Total | Proportion of | |||||
remuneration | remun- | ordinary | expense | remun- | fixed and variable | |||||
eration | items | eration | remuneration | |||||||
Financial | Base | Fringe | One-year | Fixed | Variable | |||||
year | salary | benefits | variable* | |||||||
Name, | ||||||||||
position |
Svein J. Liknes,
CEO
Birte Norheim,
CFO
Tor Bjerkestrand,
SVP operations
Dag Eggan,
SVP special projects
Espen Myhra,
SVP strategy, business development & commercial
Knut Gjertsen,
SVP projects & technology
Marit Vik-Langlie,
VP legal
Kjersti Hovdal,
SVP business performance **
Børge Nerland,
SVP drilling & Wells***
Ida Ianssen Lundh,
SVP subsurface****
Andrew McCann,
SVP subsurface*****
Ørjan Johannessen,
VP drilling & wells******
2023 | 5 608 | 342 | 2 523 | 0 | 201 | 8 673 | 71 % | 29 % | |
2022 | 4 560 | 337 | 4 349 | 0 | 190 | 9 435 | 54 % | 46 % | |
2023 | 3 566 | 18 | 1 438 | 0 | 201 | 5 222 | 72 % | 28 % | |
2022 | 3 281 | 113 | 2 560 | 0 | 190 | 6 144 | 58 % | 42 % | |
2023 | |||||||||
3 544 | 18 | 1 383 | 0 | 201 | 5 145 | 73 % | 27 % | ||
2022 | 3 298 | 13 | 2 846 | 0 | 190 | 6 346 | 55 % | 45 % | |
2023 | 3 115 | 18 | 1 142 | 0 | 201 | 4 475 | 74 % | 26 % | |
2022 | 2 870 | 13 | 1 902 | 0 | 190 | 4 975 | 62 % | 38 % | |
2023 | 3 094 | 18 | 1 141 | 0 | 201 | 4 454 | 74 % | 26 % | |
2022 | 2 791 | 14 | 2 434 | 0 | 190 | 5 429 | 55 % | 45 % | |
2023 | 3 518 | 596 | 1 188 | 0 | 201 | 5 503 | 78 % | 22 % | |
2022 | 3 336 | 577 | 2 945 | 0 | 190 | 7 048 | 58 % | 42 % | |
2023 | 2 024 | 27 | 763 | 0 | 201 | 3 015 | 75 % | 25 % | |
2022 | 1 851 | 21 | 1 888 | 0 | 190 | 3 950 | 52 % | 48 % | |
2023 | 2 902 | 81 | 1 078 | 0 | 201 | 4 262 | 75 % | 25 % | |
2022 | 1 673 | 7 | 1 523 | 0 | 111 | 3 314 | 54 % | 46 % | |
2023 | |||||||||
2 811 | 18 | 1 398 | 0 | 201 | 4 428 | 68 % | 32 % | ||
2022 | 492 | 2 | 138 | 600 | 32 | 1 263 | 42 % | 58 % | |
2023 | |||||||||
619 | 4 | 585 | 0 | 67 | 1 275 | 54 % | 46 % | ||
2022 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |
2023 | 2 058 | 13 | 694 | 0 | 134 | 2 900 | 76 % | 24 % | |
2022 | 2 865 | 13 | 2 305 | 0 | 190 | 5 373 | 57 % | 43 % | |
2023 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |
2022 | 937 | 5 | 262 | 0 | 79 | 1 284 | 80 % | 20 % |
- One year variable includes accrued LTIP for 5 months in 2023
- Kjersti Hovdal became part of the senior management on 1 June 2022. Amounts for 2022 therefore include seven months.
- Børge Nerland joined OKEA on 1 November 2022. Amounts for 2022 therefore include two months. One year variable for 2022 includes sign-on bonus.
- Ida Ianssen Lundh became part of the senior management on 1 September 2023. Amounts for 2023 therefore include four months.
- Andrew McCann was part of the senior management until 31 August 2023. Amounts for 2023 therefore include eight months.
****** Ørjan Johannessen was part of the senior management from 1 June 2022 to 1 November 2022. Amounts for 2022 therefore include five months.
- Fixed remuneration includes base salary. Fringe benefits include housing, pension compensation, free telephone, free broadband connection, newspapers, and health insurance.
Report on remuneration of leading persons | Page 5 |
- Variable remuneration includes the following elements:
- The corporate share-based bonus scheme. The relative allocation under the corporate share-based bonus scheme is the same for all employees and can be up to 40% of base salary with a target value of 20%. Reference is made to section 3.0 "Performance in the reported financial year" for further details.
- Value of exercised warrants in 2022 for senior management.
- Benefits from the company's long-term share incentive scheme (LTIP) as further described in section 2.22 "Shares awarded or due for the reported financial year".
- Pension expense is equal to the pension premium paid for each individual. For persons only in senior management for parts of the year pension expense for that period is included.
- Total remuneration is the total of items 1)-3) above.
- The proportion of fixed remuneration includes base salary, fringe benefits and pension expense relative to the total remuneration. The proportion of variable remuneration includes and variable remuneration and extraordinary items relative to the total remuneration.
Report on remuneration of leading persons | Page 6 |
Table 1b below provides information of remuneration paid to each individual board member including remuneration related to work undertaken in various board sub-committees, in addition to other benefits.
Table 1b - Remuneration of board of directors for the reported financial year*
Remuneration amounts are in NOK 1000 | Remuneration amounts are in NOK 1000 |
BoD | ||||
Financial | Other | meetings | ||
Board members | year | Fees | benefits** | attended |
Chaiwat Kovavisarach, | 2023 | 696 | 252 | 14 |
board chairman | 2022 | 664 | 252 | 10 |
Mike Fischer, | 2023 | 692 | 168 | 14 |
vice chair | 2022 | 573 | 168 | 10 |
Rune Olav Pedersen, | 2023 | 616 | 168 | 13 |
board member | 2022 | 583 | 168 | 10 |
Nicola Gordon, | 2023 | 644 | 168 | 14 |
board member | 2022 | 550 | 168 | 10 |
Finn Haugan, | 2023 | 717 | 168 | 14 |
board member | 2022 | 651 | 168 | 10 |
Jon Arnt Jacobsen, | 2023 | 438 | 168 | 11 |
board member | 2022 | n/a | n/a | n/a |
Phatpuree Chinkulkitnivat, | 2023 | 374 | 168 | 10 |
board member | 2022 | n/a | n/a | n/a |
Elizabeth Williamson, | 2023 | 410 | 168 | 11 |
board member | 2022 | n/a | n/a | n/a |
Paul Murray, | 2023 | 177 | 0 | 2 |
board member*** | 2022 | 516 | 168 | 10 |
Saowapap Sumeksri, | 2023 | 254 | 0 | 3 |
board member*** | 2022 | 541 | 168 | 10 |
Grethe Moen, | 2023 | 184 | 0 | 3 |
board member*** | 2022 | 555 | 168 | 10 |
BoD | ||||
Employee elected board | Financial | Other | meetings | |
members | year | Fees | benefits** | attended |
Sverre Nes, | 2023 | 239 | 97 | 10 |
board member | 2022 | n/a | n/a | n/a |
Ragnhild Aas, | 2023 | 220 | 97 | 11 |
board member**** | 2022 | 0 | 0 | 0 |
Per Magne Bjellvåg, | 2023 | 220 | 97 | 11 |
board member | 2022 | n/a | n/a | n/a |
Harmonie Wiesenberg, | 2023 | 0 | 0 | 0 |
deputy member | 2022 | n/a | n/a | n/a |
Jan Atle Johansen, | 2023 | 97 | 0 | 3 |
deputy member*** | 2022 | 286 | 97 | 9 |
Gry Anette Haga, | 2023 | 0 | 0 | 0 |
deputy member | 2022 | n/a | n/a | n/a |
Anne Lene Rømuld, | 2023 | 105 | 0 | 3 |
board member*** | 2022 | 313 | 97 | 10 |
John Kristian Larsen, | 2023 | 113 | 0 | 3 |
board member*** | 2022 | 312 | 97 | 10 |
Gro Anita Markussen, | 2023 | 0 | 0 | 0 |
Deputy board member*** | 2022 | 11 | 0 | 1 |
- For presentation purposes, the table is changed from 2022 Report on remuneration of leading persons to display earned remuneration instead of paid remuneration in the year
- The column "Other benefits" relates to an additional compensation, in accordance with the company's general meeting on 11 May 2023, to the board of directors with an obligation to purchase OKEA shares. The shares are subject to a 12-monthlock-up period from the date of purchase
- Part of the board of directors until general meeting 11 May 2023
- Deputy board member until 11 May 2023
For split of fees between board meetings and sub-committee meetings, reference is made to table 5b in section 5.0 "Annual changes of remuneration and the company's results".
2.2. Shares awarded or due for the reported financial year
The CEO and senior management were in 2023 eligible to participate in the company's long-term incentive program (LTIP), which purpose was to further align the interests of the company and its shareholders by providing a long-term program to incentivise and retain key employees who the company has identified as being critical for delivering on the company strategy. Under the LTIP, each participant is eligible to be allocated and awarded a number of synthetic restricted stock units (RSUs), each of which will entitle the participant to receive the value equivalent to one share in the company. The participants were allocated a pre-determined number of synthetic RSUs for the three- year duration of the LTIP. Eligibility for the LTIP was assessed by the CEO at the time of allocation and award. The board determined allocation to the CEO, and the CEO determined allocation to other participants. Under the LTIP, 50% of the awarded RSUs will be awarded as a cash amount.
Report on remuneration of leading persons | Page 7 |
The remaining 50% may be awarded through shares should the company's share performance outperform a defined group of peers in the 12-month period from 1 August to 1 August each year during the LTIP (first period being 1 August 2022 to 1 August 2023).
Award is contingent upon the person remaining member of senior management, or that terms of the termination of employment being in accordance with LTIP regulations. Shares purchased under the LTIP have a lock-up period of 24 months.
Table 3 - Shares awarded or due to the Directors for the reported financial year | |||||||||
The main conditions of share award plans | Information regarding the reported financial year | ||||||||
During the year | |||||||||
Speci- | Performance | Award | End of | Shares | Value at | Shares | Shares | ||
fication | period | date | lock-up | awared | award | awarded | subject to a | ||
of plan | period | All amounts | and | holding | |||||
Name, | are in NOK | unvested | period | ||||||
1000 | |||||||||
position | at year end | ||||||||
Svein Jakob Liknes, | LTIP | 2022 | 09.06.22 | 09.06.23 | 25 000 | 2 949 | 25 000 | 25 000 | |
CEO | |||||||||
Birte Norheim, | LTIP | 2022 | 09.06.22 | 09.06.23 | 13 800 | 1 628 | 13 800 | 13 800 | |
CFO | |||||||||
Tor Bjerkestrand, | LTIP | 2022 | 09.06.22 | 09.06.23 | 9 200 | 1 085 | 9 200 | 9 200 | |
SVP operations | |||||||||
Dag Eggan, | LTIP | 2022 | 09.06.22 | 09.06.23 | 9 200 | 1 085 | 9 200 | 9 200 | |
SVP special projects | |||||||||
Espen Myhra, | LTIP | 2022 | 09.06.22 | 09.06.23 | 13 750 | 1 622 | 13 750 | 13 750 | |
SVP strategy, business | |||||||||
development & commercial | |||||||||
Knut Gjertsen, | LTIP | 2022 | 09.06.22 | 09.06.23 | 17 250 | 2 035 | 17 250 | 17 250 | |
SVP projects & technology | |||||||||
Marit Vik-Langlie, | LTIP | 2022 | 09.06.22 | 09.06.23 | 11 500 | 1 357 | 11 500 | 11 500 | |
VP legal | |||||||||
Kjersti Hovdal, | LTIP | 2022 | 09.06.22 | 09.06.23 | 13 750 | 1 085 | 13 750 | 13 750 | |
SVP business performance | |||||||||
Børge Nerland, | LTIP | 2022 | N/A | N/A | N/A | N/A | N/A | N/A | |
SVP drilling & wells | |||||||||
Ida Ianssen Lundh,* | LTIP | 2022 | N/A | N/A | N/A | N/A | N/A | N/A | |
SVP subsurface | |||||||||
Andrew McCann, ** | LTIP | 2022 | 09.06.22 | 09.06.23 | 12 560 | 1 492 | 12 560 | 12 560 | |
SVP subsurface | |||||||||
126 010 | 14 339 | 126 010 | 126 010 |
- Not part of senior management in earnings period for LTIP
** Not part of senior management at time of award
Under the LTIP scheme described under section 2.2 applicable for 2023 and onwards each participant is awarded a cash amount corresponding to an amount of synthetic RSU's, including a performance element which if met is awarded as cash with an obligation to purchase OKEA shares. In the table 3b below the variable remuneration of senior management is for transparency set out in a OKEA specific table, showing LTIP, corporate bonus scheme and cash awarded for purchase of shares under the purchase obligation pursuant to both the LTIP and the corporate bonus scheme.
Report on remuneration of leading persons | Page 8 |
Table 3b - Variable remuneration to senior Management under 2023 LTIP and corporate bonus scheme
All amounts are in NOK 1000 | ||
Svein J. Liknes, | 2023 | |
CEO | ||
Birte Norheim, | 2023 | |
CFO | ||
Tor Bjerkestrand, | 2023 | |
SVP operations | ||
Dag Eggan, | 2023 | |
SVP special projects | ||
Espen Myhra, | 2023 | |
SVP strategy, business development & commercial | ||
Knut Gjertsen, | 2023 | |
SVP projects & technology | ||
Marit Vik-Langlie, | 2023 | |
VP legal | ||
Kjersti Hovdal, | 2023 | |
SVP business performance | ||
Børge Nerland, | 2023 | |
SVP drilling & Wells | ||
Ida Ianssen Lundh, | 2023 | |
SVP subsurface | ||
Ørjan Johannessen, | 2023 | |
VP drilling & wells | ||
Andrew McCann, | 2023 | |
SVP subsurface | ||
LTIP*
-
143
618
573
427
427
414
298
400
680
158
n/a
n/a
Corporate bonus scheme
1 380
820
810
715
714
774
465
678
718
427
n/a
694
Total | Cash used to |
purchase shares** | |
2 523 | 1 317 | |
1 438 | ||
735 | ||
1 383 | ||
712 | ||
1 142 | ||
572 | ||
1 141 | ||
572 | ||
1 188 | ||
602 | ||
763 | ||
389 | ||
1 078 | ||
554 | ||
1 398 | ||
854 | ||
585 | ||
213 | ||
n/a | n/a | |
694 | ||
347 | ||
- LTIP 2023 explained in section 2.2
-
Trade date and share price for shares purchased under purchase obligation (2023) 2023 LTIP: Trade date: 13.09.23. Purchase price: 38.90 NOK/share.
After tax amount of share purchase 2023: 1.4 MNOK
3.0. Performance in the reported financial year
As a part of its salary system, the company has a bonus scheme applicable for all employees. The relative allocation under the share bonus scheme is the same for all employees and can be up to 40% of base salary with a target value of 20%. The specific criteria (KPIs) for the bonus are determined by the board of directors on an annual basis and are designed to promote the corporate strategy. The bonus awarded is split between cash and shares, where 50% of the awarded bonus is withheld as employee tax, 25% is paid as cash and 25% is awarded in shares.
The bonus amount earned in 2023 for the CEO and the senior management is included in the amount specified in Table 1a as "Variable remuneration - one-year variable".
Report on remuneration of leading persons | Page 9 |
The bonus earned in 2023 was 23% and was settled in first half of 2024. While bonus earned for 2022 of 28% was settled in first half of 2023.
Table 4 - Performance in 2023 with bonus payment in 2024
1 | 2 | 3 Information about performance target | 4 | ||||
Relative | a) Minimum | b) Achieved % | a) | ||||
weighting of the | target/ | a) Maximum/ | Achieved | ||||
of target | |||||||
Description of the performance criteria and type of | performance | threshold | target | performa | |||
Element | Strategic objective | applicable remuneration | criteria | performance | performance | nce | |
Deliver | Deliver | Severall criteria related to asset performance and | |||||
shareholder value | 45 % | 0 % | 13 % | 40 % | 6.0 % | ||
profitability | profitability | ||||||
creation | |||||||
Value accretive | Deliver sustainable | Severall criteria based on the delivery of OKEA's | |||||
growth strategy. Addition of reserves, Capex- and | 42.5 % | 0 % | 35 % | 40 % | 15.0 % | ||
growth | new business | start-up target for projects | |||||
Maintain license to | Maintain a safe | Specific targets related to projects, ESG, QHSSE and | 12.5 % | 0 % | 16 % | 40 % | 2.0 % |
operate | working | workforce | |||||
environment | |||||||
Total performance | achieved | 23.0 % |
4.0. Compliance and governance
The individual elements and the total remuneration of leading persons during 2023 were implemented in line with the guideline on remuneration approved by shareholders at the annual general meeting on 11 May 2023 and as presented in this report. The board and the people and organisation (P&O) committee are satisfied that the company's remuneration principles enable recruitment, motivation and retainment of high calibre senior management capable of achieving the objectives of the company and support the company's strategy, shareholders' long-term interests and sustainable business practices. OKEA's strategy and long-term ambitions are further described in the annual report for 2023 and on the website www.okea.no
About the people and organisation committee (P&O committee) and its role The board has established a charter for the P&O committee, stating its tasks and duties. The charter stipulates that the P&O committee shall:
- Evaluate and recommend the compensation of the company's CEO, administer the company's incentive programmes, and provide advice on general compensation and organisation related matters to the board,
- advice the board on the annual report on the compensation of the senior management team and other leading persons, pursuant to applicable rules and regulations,
- advise the CEO on matters relating to other material employment issues in respect of the senior management, and
- endorse the overall limits for the annual salary adjustments for employees, within the budget set by the board.
Report on remuneration of leading persons | Page 10 |
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Okea ASA published this content on 05 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 April 2024 11:01:05 UTC.