As part of NKT's efforts to attract and retain highly qualified employees as well as creating a link between individual performance and individual company profits, NKT Holding operates both bonus and share-based schemes which reward profit growth.
The share-based schemes are based on value creation for NKT shareholders in the form of higher share prices. The principles most recently applied in allocating share warrants were based on the following:
- The value increase must be 8% p.a. - corresponding to internal WACC (Weighted Average Cost of Capital) - before the schemes can have a value for the recipient for redemption three, four or five years, respectively, after issue.
- The scheme is forfeited in the event of resignation by the recipient.
- For the CEO the value of the allotment may comprise a maximum of 50% of the fixed annual remuneration (pay plus pension contributions) as the CEO has no other bonus schemes or variable forms of pay. For other members of the Management, the aggregate variable forms of pay may comprise 40% of the fixed annual remuneration, 15% being an annual bonus scheme and 25% being the value of allotted share warrants. For other employees, the aggregate variable pay element (bonus scheme and value of allotted share warrants) may comprise a maximum of 40% of the fixed annual remuneration.
- The allocation must not constitute more than 0.75% of the share capital per annum.
See also Stock Exchange Release #17 of 16 November 2011 concerning issuance of warrants.
Financial Terms