Remuneration in Danish Large Cap companies

Remuneration in Danish Large Cap companies Benchmarking of remuneration of executive management and boards 2013 - 2016

Introduction 3

Key takeaways 4

Current trends 5

Experience from the UK 8

Overview 9

Methodology 10

Remuneration of executive directors 11

Base salary 15

Pension 18

Bonus (STIs) 19

Long-Term Incentives (LTIs) 22

Board remuneration 31

How can Deloitte help? 32

Our contacts 33

Appendix 35

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Content

Remuneration in Danish Large Cap companies


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This report gives an overview of and insight into remuneration of executive directors and boards of listed companies within the Danish Large Cap1 index. In March 2017 the Large Cap Index is comprised of 38 companies, of which the names can be found in a list in the appendix. These companies represent some of the largest Danish companies from a wide range of industries, from financial services to energy and supplies.

During 2016 no companies left the Danish Large Cap Index, while DFDS, NKT Holding, SimCorp and Össur entered following OMX Nasdaq’s annual review in December 2015. The annual review of the Large Cap Index in December 2016 resulted in an expansion of the index by ALK-Abelló, Ambu, Jeudan, Schouw & Co., and Spar Nord. During 2016 Scandinavian Tobacco Group (February), DONG Energy (June) and Nets (September) also entered the index through their IPOs.

Out of the companies of the Large Cap Index, 35 companies have financial year-ends 31 December 2016, while 3 companies have financial year-ends either 31 August or 30 September. The annual reports have been published during or before March 2017. One company, G4S2, had not published its annual report for 2016 at the time of the writing of this report and has hence been omitted from the 2016 benchmarks. Hence, this report is based on the data from 37 companies.

The analysis is based strictly on publicly available information obtained from annual reports, company websites, press releases, general assembly notes, remuneration policies, etc. Not all companies report their remuneration with the same level of detail. For all the analysed benchmarks, we report the number of companies for which the required data has been

reported with the required level of detail to be included in our analysis. All the included company reports in accordance with IFRS and financial reporting on remuneration of executives are more specifically governed by IFRS 2 and the Danish Financial Statements Act. Remuneration of executive directors is required by IFRS to be disclosed on both fixed and variable elements for executive management. Although reporting this level of detail for all individual members of management is not a requirement, it is however best practice guidance from the Committee on Corporate Governance3. LTI programmes must also be disclosed separately in their entirety, which includes all participants, both executives and non-executives. Where applicable, we have compared our findings with previous studies performed on the Danish market to put recent developments into a long-term perspective.

DisclaimerThis report is aimed at giving an overview of executive remuneration and the use of LTI in Danish Large cap companies. There may be very good reasons for a particular company to lie inside and outside of benchmarked ranges. This could be due to differences in company size, industry, market volatility or other company-specific factors. When using the report we recommend that you consult your advisers on the interpretation of the data and its relevance to your particular circumstances.

This report does not constitute the provision of advice or service to any reader of this report, and hence Deloitte may not be named in a company’s public documentation as having provided material assistance to the remuneration committee based solely on the use of the information provided in this report.

Introduction

1. Nasdaq OMX Copenhagen Large Cap Index. The index is comprised of 41 share listings of which 3 are listings of multiple share classes (38 individual companies). Nasdaq OMX Copenhagen Large Cap includes Danish listed companies with a market cap of above EUR 1bn 2. G4S Plc is incorporated in the UK and is dually listed on both London and Copenhagen Stock Exchanges. G4S Plc reports under UK regulation and is more naturally compared to other UK-based listed companies. 3. https://corporategovernance.dk/recommendations-corporate-governance


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Variable versus fixed remuneration of executive directors increased between 2013 and 2016 so that variable remuneration now comprises 37% compared to previously 31%.

CEOs receive a higher degree of variable remuneration compared to CFOs and Other Executive Directors.

Base salaries of executive directors have increased significantly during the last 4 years. CEO base salaries have increased by approx. 10% annually while CFO base salaries have only increased by 2%.

The increase in CFO base salaries has been affected by the many replacements of CFOs. Adjusted for this turnover, the increase in base salaries for the remaining CFOs has been approx. 8% annually or around the same level as for CEOs. Nine CFOs were replaced between 2014 and 2016.

Key takeaways

Median base salaries for CEOs and CFOs are DKK 8.2m and DKK 4.8m.

Short-term incentives (STI or bonus) are approx. 40% of base salary for executive directors.

Around two thirds of long-term incentives (LTI) programmes comprise performance share units or restricted stock units.

The average size of outstanding LTI programmes is approx. 1.5% of the share capital. Companies allocate approx. 0.1% of the share capital in yearly allocations, indicating that the size of LTI programmes has decreased on earlier years.

LTI allocations increased for CEOs while it decreased for CFOs from 2013 to 2016. There is a sign that boards in general wish for their CFOs to be more risk averse (gate keepers) and that their CEOs accept more risk (innovators).


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Danish environmentThe recent IPO’s of Scandinavian Tobacco Group, Dong Energy and Nets have renewed public discussions about executive remuneration.Especially the IPO of Nets and its remuneration and incentives of management drew much media andinvestor attention. During the latest months Danish institutional investors have publicly made clear that long term incentives potentially are becoming too favourable for executive management.

Recently the ATP stated that the incentives programmes of Nets were too favourable and in future, programmes should possibly be capped in order to avoid payouts to become unreasonable. In recent weeks ATP have also stated that the a new programme at Genmab which will be capped 400% of base salary, is an extreme of what they can accept as a shareholder. ATP also voiced criticism of Carlsbergs proposed increases of director remuneration and bonus at the recent annual general meeting and subsequently voted against the boards proposal.

We expect recent developments to have an impact on how remuneration committees (Remco) plan and execute remuneration for the coming years. As one direct effect, we expect that most Remco’s will need to revisits benchmarks applied for the size and characteristics such as vesting criteria, duration, gearing etc. We believe that communicationmore openly on remuneration policies with key investors, such as institutional investors, will be of key importance in the coming years. This will be amplified with the upcoming implementation of the ShareholderRights Directive (see further below) and further international alignment.

Shareholder Rights DirectiveExecutive remuneration is subject to increased scrutiny in Europe. The revised Shareholder Rights Directive4 was adopted in March 2017 and may lead to significant changes across Europe. The European Commission will issue standardised guidance for the implementation of the Directive within 15 months following the adoption of the Directive. Member states will hereafter have 24 months to bring national laws/regulations into force.

Individuals covered by the new voting and reporting regime include any member of the administrative, management or supervisory bodies of a company. Member states can also opt to include individuals who perform similar functions. The chief executive and deputy chief executive (if applicable) are both considered directors, irrespective of their membership of the board.

The impact for Danish companies is expected to be significant. Below we have listed some of the key elements of the revised requirements for the remuneration policies and reporting.

Current trends

4. http://www.europarl.europa.eu/sides/getDoc.do?type=TA&reference=P8-TA-2017-0067&language=EN&ring=A8-2015-0158

The Shareholder Rights Directive is an EU directive, which was adopted in 2007, with the purpose of setting out minimum rights and responsibilities for shareholders at company meetings held in the EU. Since the publication there has been a number of revisions, of which the latest is now in March 2017.

The Commission’s aim is to tackle corporate governance shortcomings relating to listed companies and their boards, shareholders (institutional investors and asset managers), intermediaries and proxy advisors (e.g. firms providing services to shareholders, notably voting advice) in line with long-term investment horizons.

Will within the next 15 months the European Commision will issue implementation guidance,after which member states will have 24 months to bring national laws and regulation into force.


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Remuneration policy

• Companies will be required to establish a remuneration policy for directors, which shareholders will have the right to vote on at the general meeting. Member states will decide whether this vote should be binding or advisory.

• Irrespective of whether the vote is binding or advisory, companies can only pay remuneration to directors in accordance with the remuneration policy submitted to a general meeting.

• Where the vote is binding and a new policy fails to gain approval, the company must continue to pay in accordance with the previously approved policy and submit a revised policy for approval at the next meeting.

• Where the vote is advisory and a new policy is not approved by the shareholders, the company must submit a revised policy to a vote at the next general meeting.

• Member states might allow companies to derogate from specific elements of the remuneration policy in exceptional circumstances. The policy must specify the elements of the policy, which may be derogated from. Exceptional circumstances must be considered to be necessary to serve the long-term interests and sustainability of the company as a whole or to assure its viability.

• The policy must be put to a vote at every material change and at least every 4 years.

The remuneration policy must be clear, understandable and set out:

• How the policy, and also specifically each component of variable remuneration, contributes to business strategy, the long-term interests and sustainability of the company.

• The different components of fixed (including benefits in whatever form) and variable remuneration which can be awarded to directors and indicate their relative proportion.

• How the pay and conditions for employees of the company were taken into account when setting the remuneration policy.

• For awards of variable remuneration, set clear, comprehensive and varied criteria for the award of variable remuneration (including an indication of financial and non-financial criteria including, where appropriate, criteria related to corporate social responsibility) and the methods to be applied to determine the extent that performance conditions have been achieved.

• The possibility for the company to reclaim variable remuneration as well as any deferral periods applicable to variable remuneration.

• Where share-based remuneration is awarded, specify vesting periods and, where applicable, retention of shares after vesting.

• The duration of directors’ contracts and their notice periods, the main characteristics of supplementary pension or early retirement schemes, the terms applicable in instances of termination, including any payment linked to termination.

• The decision-making process followed for the determination, review and implementation of the policy, including measures to avoid or manage conflicts of interest and where applicable the role of the remuneration committee or other committees concerned.

Where the policy is revised, describe and explain all significant changes and how it takes into account the votes and views of shareholders on the policy and reports since the last vote. The policy, together with the date and the results of the vote, must be publicly disclosed online for as long as it is applicable.


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Remuneration reportCompanies will be required to draw up a clear and understandable report on remuneration awarded or due over the last financial year to individual directors, which will be subject to an advisory vote at the annual general meeting.

Member states may allow small and medium-sized companies to submit the report for a discussion at the annual general meeting, rather than an advisory vote.

The report should contain the following information on each individual director’s remuneration:

• Total remuneration split out by component

• The relative proportion of fixed and variable remuneration

• An explanation of how total remuneration complies with the adopted policy, including how it contributes to the long-term performance of the company

• Information on how the performance criteria were applied

• A comparison of the annual change in remuneration over the last 5 years against the evolution of company performance and the average remuneration of employees other than directors (which is to be calculated on a full-time equivalent basis)

• The number of shares/options granted and any applicable performance conditions

• The use of the possibility to reclaim variable remuneration

• Any deviation from the policy, including an explanation of the exceptional circumstances and the indication of the specific elements of remuneration concerned.

The European Commission will adopt guidelines to specify a standardised presentation of this information.

The report must be publicly available online for 10 years after publication.

Companies must explain in the next remuneration report how the vote (or, where applicable, discussion) at last year’s meeting has been taken into account.


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The Shareholder Rights Directive provisions are broadly in line with the voting and reporting regime that has been operated in the UK since October 2013.

Since the new reporting regime has come into force, significant changes have occurred in the UK:

• The engagement between companies and their shareholders has increased significantly.

• Remuneration structures have been simplified with the vast majority of companies using a single bonus and a single long-term share plan. Ten years ago, over half of FTSE 100 companies were using more than 1 form of long-term. This figure has now dropped to less than 20% and continues to decline in 2017.

• The time horizon of long-term incentives has been increasing with the majority of FTSE 100 companies requiring executives to hold shares for a period of 2 years following the end of the performance period.

• Virtually all FTSE 100 companies now have in place some mechanism to reduce unvested awards or reclaim incentives (clawback provisions).

• The level of shareholding requirement has also significantly increased with a median requirement of 200% of base salary within the FTSE 100.

Besides structural changes, a notable change has been the disclosure of annual bonus targets. Only 2 or 3 years ago, it was very uncommon for FTSE 100 companies to disclose bonus targets and achievements against these targets. This is now the norm.

We also observe a continued trend towards the use of more customised performance measures, notably in long-term incentives. Whilst the majority of companies were using total shareholder return 10 years ago, now less than 10% uses only 1 measure of performance and over half of companies use 3 or more measures in their long-term incentive plan.

The UK reporting requirement include the disclosure of the total remuneration earned in respect of the year. This includes base salary and bonus payable for the

year as well as the value of share awards where the performance conditions have been assessed. This in turn has led to increased scrutiny on equity awards and associated performance conditions. As equity awards are typically expressed as a percentage of base salary, a number of companies received criticism whenthey did not scale back the size of their equity awards following a significant reduction in share price asshareholders and proxy advisors feel there is a risk of windfall gain when the share price recovers. One large mining company received significant vote against its remuneration report and this year is proposing to cap the maximum value that can be received from its longterm incentive plan (at twice the value of the award at grant). This is so far the only example of such cap being introduced. Other companies only cap the award and will consider the appropriateness of the size of theaward on an annual basis.

We believe that similar developments as has been seen in the UK in recent years can be expected to be seen in Danish Large Cap companies, as the revised Shareholder Rights Directive will be implemented over the coming years. The requirement that executive remuneration is disclosed for each executive director and thereby increasing transparency has the potential effect of driving up executive pay further, as direct benchmarking will be more easily accessible.

Experience from the UK


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Remuneration of executive directors can generally be divided into a fixed and variable remuneration. Fixed elements include base salary, pension and other remunerations (car, phone, housing benefits, etc.) whereas variable elements typically include short-term incentives (STIs) and long-term incentives (LTIs). Typically, STIs are 1-year cash-based considerations, while LTIs are longer than 1 year and may include either cash or share-based pay (shares or options/warrants).

Fixed elements of remuneration can popularly be said to compensate expected performance, while the purpose of variable elements is to incentivise extraordinary or exceptional performance.

Consequently, variable elements are typically linked to a number of KPIs or benchmarks, which must be achieved to trigger variable remuneration to be payable.

Variable salary types Variable remuneration can be either short-term or long-term. Short-term incentives is a term that typically applies to a bonus arrangement that is settled within the financial year of the company, while long-term incentives apply to arrangements that are longer than 1 financial year. Below is a non-exhaustive overview of different types of LTIs.

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. The goals of incentive programmes are typically one or more individual or companywide financial and non-financial key performance indicators (KPIs), which can be evaluated on an absolute or a relative basis. Examples are relative total shareholder return, absolute EBITDA performance of a division or companywide customer service KPIs.

Overview

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 of years, in case the employee has not sold his/her shares or left the company

The employee is granted free shares, which may not be transferred or exercised until certain 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 determined in advance

The employee is granted the right to buy newly issued company shares in the future at a price determined in advance

Programme Description

Employee shares

Matching shares

Performance share unit and restricted stock units

Share-based options

Share-based warrants

Base salary Pension Other Bonus Share-basedremuneration

Fixed elements Variable elements

Incentive programmes

Remuneration components


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DataThe analyses in this report are based on the executive remuneration of companies included in the Danish Large Cap Index as of March 2017. Data is based strictly on publicly available information obtained from annual reports, company websites, press releases, general assembly notes, remuneration policies, etc. Not all companies report their remuneration with the same level of detail and the number of companies or executives that are included will vary from analyses to analyses.

Remuneration analysisThe analyses of base salary include only those individual executive directors where remuneration for the full financial year was provided in the annual report or where it was possible to reasonably pro rata adjust any part-year salary information.

When using published data, analyses are based on annual reports relating to different financial periods. We have applied the latest 4 financial periods. The analyses therefore attempt to reflect, as accurate as we are able, salary levels effective during 2013, 2014, 2015 and 2016. We have not applied any ageing factor to the disclosed salaries.

We have categorised main executive management positions into 3 main groups – the top full-time executive (CEO), the finance director (CFO) and other executive directors (Other Executive Directors). In some companies, the only executive management are the CEO and the CFO and hence not all companies are represented in the other analyses. It is also worth noting that in some companies where an executive director has left during the year the details of the new incumbent are not yet known at the time of reporting, or are not disclosed. This means that there will not always be a top full-time executive or finance director for every company.

For the analysis of total remuneration, STI and LTI all companies with remuneration split for total or individuals all 4 years have been included. Leaving 28, 20, 15 and 7 companies for all executive directors, CFOs, CFOs and Other Executive Directors, respectively. We apply each company as one observation for this analysis. However, note that for some special cases

where companies have more than 1 effective CEO we apply all CEOs as observations.

When analysing base salary, all companies with remuneration split for individual executive directors all 4 years have been included. This includes 21, 15 and 11 individuals for the CEO, CFO and Other Executive Directors categories, respectively. However, for some companies, pension is included in the base salary and for other companies it is not clear whether pension is a part of the reported base salary. For this analysis one executive director is applied as one observation.

We apply individuals as observations for the pension analysis. If the individual split is not available for a company, we apply numbers for total remuneration of executive directors. This leaves 72 observations.

For analysis of LTI programmes, we apply each programme as one observations. This means allindividual programmes of the companies have been included separately. For the LTI analysis, we do not apply programmes consisting of cash bonuses, leaving 53 programmes.

The analysis of board salaries is based on companies as observations. Only 1 company does not disclose remuneration to total board all 4 years, leaving 36 observations. 29 companies disclose salaries of the chairman for all 4 years.

StatisticsThroughout the report, data is presented by using the following statistics:

• Upper quartile – separates the top 25% of a sample from the bottom 75%

• Median – the middle point of a sample

• Lower quartile – separates the bottom 25% of a sample from the top 75%

• Average – the arithmetic mean of a sample

Methodology


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Remuneration of executive directors

Remuneration of executive directors 2013-2016

CEO remuneration 2013-2016

61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016

Base salary Pension Other Bonus LTI


Source: Deloitte analysisNote: Companies that do not disclose executive management salary split are excluded. Only companies for which Executive Director remuneration is disclosed for the entire period are included. This includes 28 companies.

Source: Deloitte analysisNote: Companies that do not disclose CEO salary split are excluded. Only companies for which CEO remuneration is disclosed for the entire period are included. Further, we apply both CEOs for GN. This includes 19 companies and 20 observations.

58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016

CFO remuneration 2013-2016

Variable pay 2013 – 2016


CEO CFO Other

25th percentile Median 75th percentile



25th percentile Median 75th percentile 25th percentile Median 75th percentile

6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016


Yearly LTI issuance as a percentage of outstanding shares

Source: Deloitte analysisNote: Only active programmes are included.Note: Only programmes with disclosed LTI issuance amount in all 4 years are included in the graph, leaving 29 programmes.

0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013


All executive directors - Development in yearly LTI allocations as a percentage of base salary (left) and DKKm (right)

CEOs - Development in yearly LTI allocations as a percentage of base salary (left) and DKKm (right)

Source: Deloitte analysisNote: Companies that do not disclose executive management salary split are excluded. Only observations that are disclosed for the entire period are included, leaving 28 companies.

Source: Deloitte analysisNote: Companies that do not disclose CEO salary split are excluded. Only observations that are disclosed for the entire period are included, leaving 20 companies.

3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016

CFOs - Development in yearly LTI allocations as a percentage of base salary (left) and DKKm (right)

Maximum allocation as a percentage of base salary

Board remuneration

Source: Deloitte analysisNote: Companies that do not disclose CFO salary split are excluded. Only observations that are disclosed for the entire period are included, leaving 15 companies.

Source: Deloitte analysis

Source: Deloitte analysis Note: Only companies that disclose person remuneration throughout the 4-year period are included, leaving 36 companies.

Remuneration of chairpersons

Source: Deloitte analysisNote: Only companies that disclose person remuneration throughout the 4-year period are included, leaving 29 companies.


1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5

Average 25th percentile Median 75th percentile

DKK

m

Source: Deloitte analysisNote: Companies that do not disclose CFO salary split are excluded. Only companies for which CFO remuneration is disclosed for the entire period are included. This includes 15 companies.

Source: Deloitte analysisNote: The samples of CEOs, CFOs and Other are not the same size, since we exclude companies that do not disclose individual remuneration for 2013-2016, leaving 20, 15 and 7 companies for CEOs, CFOs and Other, respectively. Further, we apply both CEOs for GN.

59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

Figure: Composition of the total remuneration

Figure: Composition of the total remuneration:

CEO base salaries 2016 (left) and percentiles for 2013 to 2016 (right)


Fixed salary Other Bonus LTI

Source: The results for US, UK and Continental Europe are from Conyen et al. (2011) and is based on information about remuneration in the annual financial reports. The results for other pay in Denmark are from Bechmann (2011c) and is from an analysis of 39 listed companies in Denmark, with information based on the remunera-tion disclosed in the annual financial reports. Fixed salary, bonus and LTI for Denmark are based on an average for 114 listed companies (94 with incentive based payment and 20 without)

59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013

Source: The results for the US, the UK and Continental Europe are from Conyen et al. (2011) and are based on information on remuneration in annual reports. The results for other pay in Denmark are from Bechmann (2011c) and are from an analysis of 39 listed companies in Denmark, with information based on the remuneration disclosed in annual reports. “Fixed salary”, “Bonus” and “LTI” for Denmark are based on an average for 114 listed companies (94 with incentive-based payment and 20 without).

Source: Deloitte analysisNote: The left graph represents the 26 companies that disclosed CEO salary in 2016, whereas the graph to the right represents the 20 companies that disclosed CEO salary in all 4 years. For GN Group, both CEOs have been included.

1 column represents 1 CEO

1 column represents 1 CFO

CFO base salaries 2016 (left) and percentiles for 2013 to 2016 (right)

DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3

Source: Deloitte analysisNote: The left graph represents the 20 companies that disclosed CFO salary in 2016, whereas the graph to the right represents the 15 companies that disclosed CFO salary in all 4 years.

Other Executive Directors’ base salaries 2016 (left) and for percentiles for 2013 to 2016 (right)

All executive directors - Development in bonus payout as a percentage of base salary (left) and DKKm (right)

DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5

Source: Deloitte analysisNote: The left graph represents the 13 companies that disclosed Other Executive Directors’ base salary in 2016, whereas the graph to the right represents the 7 companies that disclosed Other Executive Directors´ base salary in all 4 years.


Source: Deloitte analysisNote: All executive directors with disclosed salary specification have been included as a separate category. Companies, which only disclose salary specification of the entire management group as a whole, have been included with the aggregated totals. Companies that do not disclose single person or executive management salary split are excluded. 30 companies are included in 2016.

Source: Deloitte analysis Note: All executive directors with disclosed salary specification have been included as a separate category. Companies, which only disclose salary specification of entire management group as a whole, have been included with the aggregated total. Companies that do not disclose single person or executive management salary split are excluded. In total, data from 25 companies has been included in 2016.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

1 column represents 1 executive director

3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3

Pension contribution as a percentage of base salary in 2016

0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%

One column represents one executive director

Companies only disclosing Executive Management as a group: 9%

Other Executive Director average: 15%

Bonus payout as a percentage of base salary in 2016

CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

CEOs - Development in bonus payout as a percentage of base salary (left) and DKKm (right)


CFOs- Development in bonus payout as a percentage of base salary (left) and DKKm (right)

STI and LTI in percentage of total salary (total management)


Source: Deloitte analysisNote: Companies that do not display STI and LTI remuneration in 2016 are excluded, leaving 35 companies.

Vesting criteria for LTI programmes

Source: Deloitte analysisNote: “Unknown” indicates that the company does not disclose if vesting criteria apply, whereas “Undisclosed” indicates an LTI programme that has vesting criteria that are undisclosed.Note: “Other financial KPIs” include both unspecified financial KPIs and other financial KPIs than those shown in the table. In the same way, “Other non-financial KPIs” include unspecified non-financial KPIs and other non-financial KPIs than those shown in the table.Note: The numbers do not sum to 100%, as 1 LTI programme can have more than 1 vesting criterion.

Vesting and duration for LTI programmes

Source: Deloitte analysis.

Treasury shares and LTI units as a percentage of outstanding shares

Source: Deloitte analysisNote: When outstanding shares are undisclosed, total shares are used as a proxy.Note: All companies, which disclose the number of outstanding LTI units for at least 1 LTI programme, have been included, leaving 27 companies.

0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-

Other financial KPIsUnknown

EBITDA/EBITOther non-financial KPIs

TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed

Customer service KPIs

0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes

Vesting period average : 2.9 Programme expiry average: 5.1

Treasury shares average: 2.9% LTI outstanding average: 1.5%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

CEO’s average: 65% Other executive board members average: 61%

2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options

Matching shares Warrants

Incentive programme types


57%

17%

17%

9%

Total remunerationAccording to IFRS, executive remuneration must be disclosed in a company’s annual report. The level of detail, of which companies disclose annual reports, varies and some companies disclose detailed remuneration for each executive director, while others report only for the group of executive directors as a whole. Remuneration is typically disclosed on the different types of pay (base salary, pension, STI and LTI), but for a small number of companies remuneration is only disclosed at the level of total amounts.

• Companies disclosing for all executive directors divided into different types of pay: #28 of 37 or 76%

• Companies disclosing for individual CEOs divided into different types of pay: #20 of 37 or 54%

• Companies disclosing for individual CFOs divided into different types of pay: #15 of 37 or 41%

Below we show the composition of remuneration of executive directors for the last 4 years. Around 56% of executive directors’ remuneration consisted of base salary in 2016, while variable pay (bonus and LTI) comprised around 37%. During the last 4 years, the split between fixed and variable pay has shifted so that variable pay now comprises 6 percentage points more compared to 2013. Average base salary of executive directors also increased considerably during this period (see below), but bonus and LTI increased even more.


12

The figure below shows that CEOs in general have a more variable pay compared to CFOs and Other Executive Directors. Like executive directors in general, CEOs experienced an increase in variable pay between 2013 and 2016, which increased by 11 percentage points from 30% to 41%.

Similar analysis for CFOs shows variable pay of 32% in 2016, which is 3 percentage points lower compared to 2013 when variable pay was 35% of total remuneration.



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%


13



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%

By comparing the development of variable pay over time for CEOs, CFOs and Other Executive Directors we observe that CFOs and Other Executive Directors receive a lower relative amount of their total remuneration compared to CEOs. Interestingly, we observe that CFOs historically have received a higher variable pay compared to CEOs, but CEOs have received higher variable pay since 2015. In 2016 there is a significant difference for variable pay to CEOs compared to CFOs and Other Executive Directors, where CEOs receive a variable pay of 41% compared to 32% for CFOs and 28% for Other Executive Directors.

Interestingly we observe that CFO’s historically received a higher variable pay compared to CEO’s, but since 2015 the CEO’s receive higher variable pay.


14



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%

5. Bechmann, K. L. og K. T. Nielsen (2012): ”Fremtidens ledelsesaflønning – hvad siger selskabernes overordnede retningslinjer for incitamentsaflønning?”, Finans/Invest 4, p. 12-19

Comparison with previous studiesBechmann & Nielsen (2012)5 compares the composition of remuneration for CEOs in Danish listed companies with similar studies from other countries. The figure below illustrates the results divided into 4 categories (“Fixed salary”, “Other”, “Bonus”, and “LTI”). The results indicate that base salary constitutes a relatively large share of 62-71% of the total remuneration for Danish CEOs compared with the US and the UK, where base salary is only 29% and 46%, respectively, of total remuneration.

These results, which are based on information available in the 2010 annual report, are consistent with the findings of our study, which show that remuneration of Danish executives in 2013 consisted mainly of a base salary (62%).

However, as already mentioned, our study indicates that base salary’s relative share of total remuneration decreased in 2014, 2015 and 2016. This indicates an increasing alignment of the remuneration policies of Danish companies with the remuneration policies in the US, the UK and Continental Europe. We expect this development to continue in the coming years.

Having established an overview of the components of the executive remuneration package, we now take a closer look at the different parts of the remuneration, one by one.


15

For base salary, we divide the observations into 3 groups: CEOs, CFOs and Other Executive Directors. For CEOs, the distribution of base salary in 2016 is depicted below, along with the development of the 25th, the median (50th percentile) and the 75th percentiles during the last 4 years.

CEO base salary is observed in the interval of DKK 3.7m to DKK 14.1m in 2016, while CEO base

salary in William Demant was considerably the highest with a base salary of DKK 14.1m. The median base salary increased throughout the period, resulting in a median base salary of DKK 8.2m in 2016, corresponding to an annual increase of approx. 10% from 2013 to 2016. For 2015 we note that 2 CEOs were replaced by a successor with a base salary increasing more than the median increase for the other CEOs.

Base salary



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%


16



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%

For CFOs, an even distribution of base salary can also be observed, with a median base salary of DKK 4.8m in 2016. CFO base salary showed an increasing trend with an annual increase in median salary of approx. 2%, while the 25th and 75th percentiles moved in opposite directions, leading to a larger dispersion between the highest and the lowest paid CFOs. A high CFO turnover

was seen, as 5, 2 and 2 CFOs were replaced in 2016, 2015 and 2014, respectively. Companies, which replaced their CFOs during the period, paid the successor a significantly lower base salary. For CFOs employed during the entire period base salary increased by approx. 8% annually.


17



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%

For Other Executive Directors the median base salary was DKK 5.2m, which is close to the same level as CFOs. However, please note that the median is based on a sample of only 7 companies, which report base

salaries for this group for all historical years. The median for base salaries for companies reporting in 2016 (13 companies) is DKK 4.6m.


18

Pension

In order to benchmark pension we measure pension contributions as a percentage of annual salary to benchmark across base salary levels. Pension contributions in 2016 are depicted below for all disclosed executive directors. 24 of the executive directors receive no direct pension contribution. Among those who do, there is a large dispersion, with pension contribution representing anywhere between 5% and 38% of base salary. Furthermore, it appears that Other Executive Directors generally receive a higher pension contribution while pension contribution for other groups are of similar size.

24 of the executive directors receive no direct pension contribution. Among those who do, there is a large dispersion, with pension contribution representing anywhere between 5% and 38% of base salary.



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%


19

Bonus (STIs)

Below actual payout of short-term bonus as a percentage of annual salary is shown to benchmark across base salary levels. As seen from the figure below, bonus payout varies considerably and has been observed in the range of 0% to 186% of base salary. Interestingly, there is a tendency that the largest payouts are given to CEOs followed by CFOs and Other Executive Directors.



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%


20

Looking at the development from 2013 to 2016, median bonus payout increased from 25% to 40% of base salary. In the same period, there was also a large dispersion of relative bonus payouts between the 25th and 75th

percentiles. In nominal amounts, median bonus payout increased from DKK 1.6m to DKK 2.9m for CEOs and from DKK 1.3m to DKK 1.6m for CFOs. This corresponds to an annual increase of 22.0% and 6.3%, respectively.



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%


21



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%

STI and LTI substitutionIn order to analyse whether there is a systematic link between variable and fixed elements of compensation packages, we now investigate if there is a substitution effect between STI and LTI elements. That is, we investigate whether executive directors who receive a small part of their compensation package as STI have a

tendency to receive a large part of their remuneration as LTI and vice versa. Below we have compared STI and LTI as a percentage of total salary in a scatterplot.

As apparent from the graph, there is no clear tendency of LTI and STI substitution.


22

Long-Term Incentives (LTIs)

Of the 38 companies represented in the Danish OMXC Large Cap Index, there are only 8 companies that do not have active LTI programmes. The remaining 30 companies have 53 separate LTI programmes. A limited number of LTI programmes are essentially 2 different programmes merged as 1, which for example could be an LTI programme that consists of both share options and RSUs. To improve the comparability of LTI programmes, we have treated these programmes as 2 separate programmes throughout this analysis. When looking at the structure of the different LTI programmes we include only programmes, which are still active, as the objective of the analysis is to describe the LTI structures that are being applied. In the table below we have classified the individual company programmes in 4 categories presented in the introduction, namely “Matching shares”, “Performance Share Unit (PSU)” & “Restricted Stock Unit (RSU)”, “Options” and “Warrants”. As seen from the table, the PSU & RSU structure is the most commonly used structure.



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9% Companies with active LTI

programmes in 2016: 30

Vesting criteriaIn order to give management incentive to make the right decisions, the variable payment is conditional on some vesting criteria, which measure the performance of the receiver of the variable pay. If the receiver does not meet the vesting criteria, all or part of the receiver’s variable pay may lapse. We see large differences in the vesting criteria applied in the different LTI programmes, and the level of detail disclosed about vesting criteria varies. As illustrated below, it is clear that there is a large variation in the vesting criteria between programmes and that no clear consensus exists. As vesting criteria are often customised for companies and strategies and in some cases for individual participants, some diversity in the applied vesting criteria is to be expected. For around a quarter (28%) of the LTI programmes it is not clearly disclosed whether vesting criteria apply and for 21% where vesting criteria apply it has not been disclosed what these criteria entail. This is clearly an area where Danish Large Cap companies could improve disclosure.



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%


23

Looking at how the vesting criteria are evaluated, it is apparent that only a limited number of companies disclose whether they measure their criteria on an absolute or a relative basis:

• By relative is meant measures that are evaluated relative to other companies, industry groups or stock indices.

• By absolute is meant measures that are solely related to the issuing firm. For example, this could be a static threshold or TSR higher than latest 3-year period.

Further, we observe if the vesting criteria are personal or companywide. Personal vesting criteria are solely or mainly performance measures on an individual level, while companywide vesting criteria are performance measures on an organisational level.

Regarding company disclosure of measurement on individual or companywide basis, 18 of the 30 companies, which have LTI programmes, choose not to disclose this information on any of their LTI programmes. Among the companies that do disclose their valuation basis, there is a clear tendency of evaluation being on a companywide basis.

Absolute/relative Individual or company wide

Absolute 15% Both 9%

Both 8% Company wide 32%

n/a 66% n/a 53%

Relative 11% Personal 6%

Total 100% Total 100%

How companies measure vesting criteria


24

Valuation LTI is measured according to the principles set out by IFRS 2. Typically, the fair value is determined on the allocation date expensed linearly over the vesting period. Most LTIs are either based on options or include embedded options, which means that the value cannot directly be measured but must be estimated by a valuation model. Below we have shown an overview of the valuation methodology disclosed by the companies. We observe that the most common framework for valuation of LTI programmers is the Black-Scholes6 framework. This framework is applied for the valuation of 49% of all LTI programmes. Most notably, one third of all LTI programmes does not clearly disclose the valuation method. Only 6% of the programmes apply the Monte Carlo valuation methodology.

The fair value of most LTIs only represents a fraction of the potential maximal payout at exercise or expiry. Moreover, that IFRS 2 warrants a number of adjustments, for example due to vesting criteria, adjustment for expected employee turnover and expected term. These allowed adjustments may cause the fair value to be lower than the maximal economic value of the warrants at grant.

Vesting period and durationThe vesting period is the period when the performance is evaluated to determine the size of LTI received. The duration of the LTI is the maximum period for the LTI. After this date the LTI expires and the remaining LTI units or shares will typically lapse.

The average vesting period of LTI programmes is around 3 years, which is applied for almost all programmes. For the programme expiry, the average is around 5 years and more deviation compared to the vesting period. We expect this variation to reflect that LTI in general is linked to firm-specific strategies, which may have different time horizons.

6. Black, F. och M. Scholes, 1973, "The Pricing of Options and Corporate Liabilities", Journal of Political Economy, Vol. 81, pp. 637-654.

Valuation methodology

Black-Scholes 49%

Monte Carlo 6%

Share price 11%

Undisclosed 34%

Total 100%



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%


25

LTI program size and issuanceCompanies that use LTI programmes as part of their remuneration package assume a potential liability, which is typically linked to the development of the company’s share price. One way of hedging this liability is through the purchase of own shares held in the treasury until the option or warrants are exercised. Shares may also be held in treasury for other reasons, but comparing the number of treasury shares to outstanding LTI amounts gives some indication as to whether the companies are able to and do hedge their exposure using treasury shares.

We therefore compare each company’s number of own treasury shares with the aggregated size of the companies’ LTI programmes – both measured as a percentage of outstanding shares. From the figure below it is clear that the size of the different LTI programmes is diverse, which is also the case for the number of shares that companies hold in treasury. However, there is a clear picture that the majority of companies hold more treasury shares than outstanding LTI amounts.



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%


26

In the graph below the size of yearly LTI issuance of shares or share equivalents during the last 4 years can be seen. Total yearly issuance of LTI also includes other key employees and not only executive management. As seen from the figure below, the median issuance level decreased slightly from 0.13% to 0.09% of outstanding shares from 2013 and 2016. The median and upper percentiles decreased, while the lower percentile was stable. With a 5-year average duration, yearly issuance of between 0.1% (median) and 0.2% (75th percentile) of the share capital will entail that the total size of programmes will comprise between 0.5% and 1.0% of the share capital. Compared to the current average size of LTI programmes of approx. 1.5%, this indicates that the sizes of LTI programmes is decreasing for OMX Large Cap companies.

As an alternative measure of the size of LTI programmes we measure the yearly payment to an executive director as a percentage of the respective director’s base salary. This shows that all executive directors received 30.3% in LTI compared to base salary in 2016, which generally increased since 2013. For a CEO in 2016, a median of 34.4% of LTI units was rewarded LTI amounts, which is equivalent to more than 4-month base salary. The change during the last 4 years is different for the 3 groups, with CEOs showing a general increase, CFOs an increase followed by a decrease.

We observe median nominal LTI values of DKK 5.7m, DKK 2.7m and DKK 1.0m in 2016 for all executive directors, CEOs and CFOs, respectively.



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%


27



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%


28



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%


29



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%

To put these numbers into perspective, we examine how large the LTI allocation as a percentage of the base salary is allowed to be according to the guidelines of the LTI programmes. The allowed allocations are shown in the figure below, from which

a large variation in the maximum LTI allocation as a percentage of base salary is observed from company to company. The average and the median are 63% and 50%, respectively, but the interval starts out at 10% and moves all the way up to 200%.


30

GovernanceFor all of the companies, except few, the remuneration policies and incentive pay guidelines are readily accessible on their company’s web-pages. The remuneration policies vary in the level of detail, but in general they offer good descriptions of the companies’ policies. These policies include that caps have been put in place with regard to the maximum size of yearly STI and LTI awards/ allocations. Few companies have not put caps on LTI allocations, while all companies have caps in place for STI.

One company has moreover applied a cap to the maximum payout of the LTI at exercise, a trend that is also increasingly seen in an international context.

For financial companies there are specific regulations set out for variable pay, including requirements for deferral of payout of variable awards. The OMX Large Cap Index includes 7 financial institutions, but as SparNord does not apply variable remuneration, our sample below only includes 6 financial institutions. Interestingly, 3 out of 30 non-financial companies have also adopted deferral of variable pay.

Clawback for malus or material misstatement has been adopted by more than half of the companies according to remuneration policies.

Non-financial Financial Total

Apply deferral 3 4 7

Do not apply deferral 27 - 27

Not clearly disclosed - 2 2

Total 30 6 36

Non-financial Financial Total

Apply clawback 15 4 19

Do not apply clawback 14 2 16

Not clearly disclosed 1 - 1

Total 30 6 36

Deferral

Clawback


31

Board remuneration

36 of the 37 companies in consideration disclose aggregated remuneration of the board all years and only 8 companies do not disclose remuneration of the chairpersons during the 4 years.

Looking at the development in board remuneration, there is a clear tendency of a general increase from

year to year, as the average and the 25th, the median (50th percentile) and the 75th percentiles increase steadily from year to year. Over the 4-year period of 2013 to 2016, the average remuneration board experienced approximately an annual increase in of 5%.

The same increase can be seen in remuneration of chairpersons. From year to year, there is a steady increase in chairperson remuneration, except in 2016,

which leads to an average annual increase of approx. 7% from 2013 to 2016.



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%



61%

58%

56%

56%

7%

6%

5%

6%

1%

1%

1%

1%

16%

18%

19%

19%

15%

17%

19%

18%

2013

2014

2015

2016





58%

57%

52%

53%

6%

6%

6%

5%

1%

1%

1%

1%

15%

17%

20%

20%

15%

19%

21%

21%

2013

2014

2015

2016




CEO CFO Other





6%

17% 15% 15%

25%

37% 40% 40%

47%

56%

67% 64%

2013 2014 2015 2016

1.7 2.5

3.0 3.7 4.0

6.1 6.2 6.0

9.1

10.3

13.1

10.8

2013 2014 2015 2016


6%

16%

6%

13%

30% 28%

43% 39%

47%

55%

74% 73%

2013 2014 2015 2016

0.4

0.8 0.6 1.2

1.6

2.4 2.4

2.9

3.7

3.3

5.3 5.4

2013 2014 2015 2016


21% 22%

15% 11%

37% 36%

46%

30%

47% 51%

67%

48%

2013 2014 2015 2016

0.9 1.0 0.7

0.6

1.3

1.6 1.4

1.6

2.3 2.4

3.2

2.8

2013 2014 2015 2016




0.03% 0.05% 0.04%

0.02%

0.09%

0.17% 0.15%

0.13%

0.23%

0.42% 0.45%

0.35%

2016201520142013






3%

9% 15% 16%

25% 30%

32% 30%

55%

62% 67%

50%

2013 2014 2015 2016

0.9

2.1 2.9 3.2

3.7 3.6

6.4 5.7

6.7

11.5 12.0

10.1

2013 2014 2015 2016


4%

12% 17%

25% 23%

31% 33% 34%

67% 65%

78%

68%

2013 2014 2015 2016


0.2

0.8 1.1

2.0

1.0

2.0 2.5 2.7

3.8 4.2

6.0 5.7

2013 2014 2015 2016



Board remuneration







1% 10% 13% 12%

30% 35%

29%

18%

58%

91%

57%

26%

2013 2014 2015 2016

0.1 0.5 0.6

0.4

1.1

1.3 1.1

1.0

2.3

3.7

2.7

1.7

2013 2014 2015 2016

-

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%

1.1

0.8

1.0

1.4

1.2

0.8

1.1

1.5 1.3

0.8

1.2

1.5

1.3

0.9

1.2

1.5


DKK

m



59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016







59%

55%

54%

61%

6%

6%

6%

6%

1%

1%

1%

1%

18%

17%

19%

17%

17%

21%

20%

15%

2013

2014

2015

2016

41% 41%

36%

35%

32%

39% 39%

28%

29%

27%

26%

2016201520142013

29%

46%

55%

62%

6%

9%

13%

5%

20%

18%

21%

20%

46%

28%

12%

14%

US

UK

ContinentalEurope

Denmark

Base salery

Pension

0.00

2.00

4.00

6.00

DKKm

8.00

10.0

12.0

14.0

16.0

9.0

8.0

7.0

6.0

5.0

4.0

10.0

5.7 5.5

5.2

4.6

8.2

7.1 6.8

6.2

9.7 9.4

8.7 8.6

2016201520142013






DKKm

20162015201420130.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0 6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

3.9

3.3

3.7 3.9

4.8 4.6

4.3 4.5

6.1 6.0

5.4 5.3




DKKm

2016201520142013

6.5

6.0

5.5

5.0

4.5

4.0

3.5

3.0

2.5





0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0


3.2 3.3 3.1

2.8

5.2 5.1

4.7

4.3

6.3 6.3 6.2

6.3


0%

40%

30%

35%

25%

15%

20%

10%

5%

CEO average: 12%

CFO average: 11%





CEO average: 60%

CFO average: 49%




0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200%













0%

20%

40%

60%

80%

100%

120%

140%

0% 20% 40% 60% 80% 100% 120% 140%

LTI

STI

57%

28% 28%

15% 15%

13%

17% 6%

11% 2%

6% 21%

-



TSR/share price

None

EPSRevenue

Cash flowIndividual

Undisclosed


0

5

10

15

20

25

30

35

40

- 1 2 3 4 5 6 7 8 9

Num

ber o

f pro

gram

mes



0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%


2013 2014 2015 2016

5.0

2.9

4.4

5.8 5.5

3.2

5.0

6.6

5.8

3.6

5.2

6.8

6.1

4.0

5.1

7.1


DKK

m

2013 2014 2015 2016

PSU & RSU Options




57%

17%

17%

9%


32

We cover all aspects of executive remuneration and share plans. Our experienced team includes specialists within human capital, performance management, remuneration and share plan structuring, tax, valuation and accounting specialists, actuaries and lawyers. We provide advice on all areas, including implementation, investor relations, accounting, legal and tax issues. Our practice is built on an integrated model, linking all of these areas, often fragmented across many staff-functions in the companies that wish to implement incentives programmes.

How can Deloitte help?

The experience and breadth of our practice means that we have particular strengths in the key areas of investor relations and legal implementation of incentive schemes.

We also have access to a wide knowledge base within Deloitte – across borders and in-depth of industries. This allows us to more fully understand industries and provide you with strategic solutions for your specific needs.

One team

Design

Strategic plan design

Business relevant performance measures

Updates on market trends and corporate governance

Drafting of share scheme participant documentation

Cost effective funding and specialist advice on tax accounting, legal and

financial issues

Executive pay benchmarking updates

Drafting of employee communication documents

All-employee schemesAssistance with drafting remuneration reports

Tax assistance, global tax analysis, tax efficient arrangements, tax

guides and binding rulings

Insight on shareholder views and assistance with consultation

Drafting of incentive plan rules

Remuneration committee advisers Implementation & communication


33

If you would like further information on any of the areas covered in this report or help in interpreting and using this data, please feel free to contact any of the persons below:

Our contacts

Tinus Bang ChristensenPartnerFinancial Advisory+45 30 93 44 [email protected]

Richard Tabori KraftPartnerTax+45 29 61 73 [email protected]

Martin FaarborgPartnerAudit+45 21 27 65 [email protected]

Martin John ConnieAssistant DirectorFinancial Advisory+45 30 93 43 [email protected]

Anja AndersenPartnerTax+45 30 93 40 [email protected]

Casper BallingAssociateFinancial Advisory+45 30 93 53 [email protected]

34


This report does not constitute the provision of advice or service to any reader of this report, and therefore Deloitte may not be named in a company’s public documentation as having provided material assistance to the remuneration committee based solely on the use of the information provided in this report.


35

CompanyA.P. Møller - Mærsk A/SCarlsberg A/SChr. Hansen Holding A/SColoplast A/SDanske Bank A/SDSV A/SFLSmidth & Co A/SGenmab A/SGN Store Nord A/SLundbeck A/SISS A/SJyske Bank A/SNordea Bank ABNovo Nordisk A/SNovozymes A/SPandora A/STDC A/SVestas Wind Systems A/SWilliam Demant Holding A/SDFDS A/SDong Energy A/SG4S PLCKøbenhavns Lufthavne A/SNKT Holding A/SRockwool International A/SRoyal Unibrew A/SScandinavian Tobacco Group A/SSimCorp A/SÖssur hfSydbank A/STopdanmark A/STryg A/SNets A/SALK-Abelló A/SAmbu A/SJeudan A/SSchouw & Co A/SSpar Nord Bank A/S

Appendix

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Remuneration in Danish Large Cap companies

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