AKVA group ASA's objetive is to create the greatest possible value for its shareholders over time. Strong corporate governance will contribute to reducing risk and ensure sustainable value creation.
Pursuant to section 3-3 (B) of the Norwegian Accounting Act and the Code (as defined below), the Board reviews and updates the company's principles for corporate governance on an annual basis. This report is included in the company's annual report.
1. Implementation and reporting on corporate governance
The Board of Directors must ensure that the company implements sound corporate goveranance.
The Board of Directors must provide a report on the company's corporate governance in the Directors' Report or in a document that is referred to in the Directors' Report. The report on the company's corporate governance must cover every section of the code of practice. If the company does not fully comply with this code of practice, the company must provide and explanation of the reason for the deviation and what alternative solution it has selected.
The Board of Directors should define the company's basic corporate values and formulate ethical guidelines and guidelines for corporate social responsibility in accordance with these values.
AKVA group ASA ("AKVA group" or the "Company", and together with its subsidiaries the "Group") has defined guidelines for corporate governance, and the board has decided to follow the Norwegian Code of Practice for Corporate Governance (the "Code") as approved by the Norwegian Corporate Governance Board ("NCGB"). The Code was last revised 30 October 2014. AKVA group has furthermore defined its own corporate Code of Conduct and defined values upon which the company should base its activity. These principles also apply to AKVA group’s subsidiaries to the extent they are relevant. The company has guidelines for corporate social responsibility that are reviewed on a yearly basis and are included in the annual report.
The individual recommendations in the Code are discussed below. The Code and its recommendations are available on the NCGB website at www.nues.no. To a large extent AKVA group’s principles correspond to the Code. Possible deviations from the Code are discussed under the relevant sections below, and any deviation is accounted for and any alternative practice adopted by the company explained.
Deviation from the Recommendation: None other than as stated above.
The company's business should be clearly defined in its articles of association. The company should have clear objectives and strategies for its business within the scope of the definition of its business in its articles of association. The annual report should include the business activities clause from the articles of association and describe the company's objectives and principal strategies.
Paragraph 3 in the Company’s articles of association (the "Articles of Association") states: “The objective of the Company is to develop, produce, design, sell and market own and purchased products, and all activities related thereto, including participation in other companies with similar activities. The activities of the Company shall be focused in particular on technology for farming of fish and animals.” The full Articles of Association are included in the Annual Report. The Company’s strategic goals and objectives are described thoroughly in the report.
Deviation from the Recommendation: None
3. Equity and dividends
The company should have an equity capital at a level appropriate to its objectives, strategy and risk profile. the board of directors should establish a clear and predictable dividend policy as the basis for the proposals on dividend payments that it makes to the general meeting. The dividend policy should be disclosed. the background to any proposal for the board of directors to be given a mandate to approve the distribution of dividends should be explained. Mandates granted to the board of directors to increase the company’s share capital should be restricted to defined purposes. If the annual general meeting is to consider mandates to the board of directors for the issue of shares for different purposes, each mandate should be considered separately by the meeting. mandates granted to the board should be limited in time to no later than the date of the next annual general meeting. this should also apply to mandates granted to the board for the company to purchase its own shares.
At year end 2017 the company had a consolidated equity of mnok 500 which accounts for 30 % of the total consolidated assets of the company. The view of the board of directors is that the above stated equity capital level is appropriate in consideration of the company’s objectives, strategy and risk profile.
The company’s main objective is to maximise the value of the investment made by its shareholders through both increased share prices and dividend payments. The company aims to give the shareholders a competitive return on investment by a combination of cash dividend and share price increase. The company’s dividend policy shall be stable and predictable.
When deciding the dividend the board will take into consideration expected cash flow, capital expenditure plans, financing requirements/compliance, appropriate financial flexibility, and the level of net interest bearing debt. The company needs to be in compliance with all legal requirements to pay dividend.
The company will target to pay dividend twice a year, after the 1st and 2nd half of the year.
The dividend policy has been established by the board of directors and is disclosed on the company’s website.
AKVA group paid out a dividend of NOK 1.25 per share in 2017, in total NOK 32,292,879.
In order to enable the company to maintain the dividend policy, the board of directors will propose that the Annual General Meeting to be held in May 2018 authorizes the board of directors pursuant to the Norwegian Public Limited Liability Companies Act (the "Public Companies Act" or the "Act") § 8-2(2) to approve the distribution of dividends based on the company’s annual accounts for 2017. The authority may be used to approve the distribution of dividends up to an aggregate amount of NOK 75,000,000. The authorization shall be in force from the date of the general meeting until the earlier of the time of the Annual General Meeting in 2019 and 30 June 2019.
The general meeting held on 10 May 2017 resolved to grant the board authorization to increase the company’s share capital by up to NOK 2,583,430 through subscription of new shares. The authorization does not authorize the board to waive the pre-emptive right of shareholders pursuant to section 10-4 of the Public Companies Act, nor carry out a capital increase through payments in non-monetary assets, nor incur special obligations on behalf of the company as set out in section 10-2 of the Act, nor decisions on mergers pursuant to section 13-5 of the Act, and may not be used in connection with the company’s option program.
The authorization is in force from the date of the general meeting until the earlier of the date of the Annual General Meeting in 2018 and 30 June 2018. This authorization replaced all previous authorizations to the board to increase the company’s share capital.
The board of directors has proposed that the Annual General Meeting to be held in May 2018 repeats the authorization granted to the board of directors in 2017 with a limitation corresponding to 10% of authorized share capital, but so that the board is not authorized to waive the pre-emptive right of shareholders pursuant to section 10-4 of the Public Companies Act, nor carry out a capital increase through payments in non-monetary assets, nor incur special obligations on behalf of the company as set out in section 10-2 of the Act, and nor decide on mergers pursuant to section 13-5 of the Act, and so that the authorization may not be used in connection with the company’s option program. The new authorization shall expire at the earliest of the Annual General Meeting in 2019 and 30 June 2019. It is further proposed that the new authorization shall replace all previous authorizations to the board of directors to increase the company’s share capital.
The general meeting in 2017 also resolved to grant the board authorization to acquire own shares which have been fully paid in accordance with the rules of §§ 9-2 – 9-4 of the Act. The shares to be acquired under this authorization shall not be acquired at a higher value than market terms on a regulated market where the shares are traded. This authorization may be used one or several times. The aggregate maximum face value of the shares which the company may acquire pursuant to this authorization is NOK 645,857, which equals approximately 2.5 % of the company’s share capital.
Acquisitions of shares pursuant to this authorization may only take place if the company’s distributable reserves according to the most recent balance sheet exceed the purchase price for the shares to be acquired. The board is free to determine how the company’s own shares will be acquired and sold, provided that an acquisition under this authorization must be in accordance with prudent and good business practice, with due consideration to losses which may have occurred after the balance-sheet date or to expected such losses.
The authorization is valid until the Annual General Meeting of 2018, however, no longer than until 30 June 2018. This authorization replaced the authorization for acquisition of own shares granted by the Annual General Meeting on 10 May 2017.
The board of directors has proposed that the Annual General Meeting to be held in May 2018 repeats the authorization granted to the board of directors in 2017, and that the new mandate shall expire at the earliest of the Annual General Meeting in 2019 and 30 June 2019. It is further proposed that the new authorization shall replace all previous authorizations to the board of directors to purchase own shares.
Deviation from the Recommendation:
The authorization to increase the share capital is not restricted to defined purposes as recommended by the Code, and consequently the general meeting does not vote separately on the authorization concerning each purpose. The board of directors is of the view that it is in the common interest of the company and its shareholders that the company is able to raise equity on short notice in connection with transactions etc. without first having to convene an extraordinary general meeting for approving the share capital increase.
The authorization to acquire own shares is not restricted to defined purposes as recommended by the Code, and consequently the general meeting does not vote separately on the authorization concerning each purpose. The board of directors is of the view that it is in the common interest of the company and its shareholders that the company is able to acquire own shares on short notice without first having to convene an extraordinary general meeting for approving such buy-back.
4. Equal treatment of shareholders and transactions with close associates
The company should only have one class of shares.
Any decision to waive the pre-emption rights of existing shareholders to subscribe for shares in the event of an increase in share capital should be justified. Where the board of directors resolves to carry out an increase in share capital and waive the pre-emption rights of existing shareholders on the basis of a mandate granted to the board, the justification should be publicly disclosed in a stock exchange announcement issued in connection with the increase in share capital.
Any transactions the company carries out in its own shares should be carried out either through the stock exchange or at prevailing stock exchange prices if carried out in any other way. If there is limited liquidity in the company’s shares, the company should consider other ways to ensure equal treatment of all shareholders.
In the event of any not immaterial transactions between the company and shareholders, a shareholder´s parent company, members of the board of directors, executive personnel or close associates of any such parties, the board should arrange for a valuation to be obtained from an independent third party. This will not apply if the transaction requires the approval of the general meeting pursuant to the requirements of the Public Companies Act. Independent valuations should also be arranged in respect of transactions between companies in the same group where any of the companies involved have minority shareholders.
The company should operate guidelines to ensure that members of the board of directors and executive personnel notify the board if they have any material direct or indirect interest in any transaction entered into by the company.
Class of shares, pre-emptive rights and transactions in own shares
AKVA group has only one class of shares. The Articles of Association place no restrictions on voting rights. All shares are treated equal.
If the proposals for authorization to the board of directors to approve increases in share capital referred to above are approved, the board may decide to waive the shareholder's pre-emptive rights in connection with a share capital increase approved under the authorization. Any decision by the board of directors to waive the pre-emptive rights of shareholders will only be made after careful consideration and if such waiver can be properly justified in the relevant circumstances.
In the event the board of directors would propose to the general meeting that the pre-emptive rights of shareholders should be waived, this proposal will be justified in the notice of the general meeting and disclosed in a stock exchange notice in connection with the capital increase.
Any transactions carried out by the company in its own shares will be carried out either on the Oslo Stock Exchange or at prevailing stock market prices. In situations with limited liquidity in the company’s shares, the board of directors will consider alternatives in order to ensure the equal treatment of shareholders.
Transactions between related parties
The company is not aware of any potential conflicts of interest between the duties owed to the company by the members of the board of directors or the company’s management, and their private interests or other duties. The company is party to facility lease agreements with companies that are controlled by shareholders of AKVA group; however, these are all based on arm’s length market terms.
In order to avoid conflicts of interest, the company has introduced guidelines pursuant to which members of the board of directors and the company’s management must act.
Guidelines for directors and key management personell
The board has implemented guidelines to ensure that members of the Board and executive personnel shall notify the board in the event they have any material direct or indirect interest in any transaction entered into by the company.
Deviation from the Recommendation: None other than as stated above
5. Freely negotiable shares
The Company’s shares must, in principle, be freely negotiable. Therefore, no form of restriction on negotiability should be included in a Company’s articles of association.
The shares are freely negotiable. The Articles of Association place no restrictions on negotiability.
Deviation from the Recommendation: None
6. General meetings
The Board of Directors should take steps to ensure that as many shareholders as possible may exercise their rights by participating in general meetings of the Company, and that general meetings are an effective forum for the views of shareholders and the Board.
Such steps should include:
- making the notice calling the meeting and the support information on the resolutions to be considered at the general meeting, including the recommendations of the nomination committee, available on the Company’s website no later than 21 days prior to the date of the general meeting
- ensuring that the resolutions and supporting information distributed are sufficiently detailed and comprehensive to allow shareholders to form a view on all matters to be considered at the meeting
- setting any deadline for shareholders to give notice of their intention to attend the meeting as close to the date of the meeting as possible
- the Board of Directors and the person chairing the meeting making appropriate arrangements for the general meeting to vote separately on each candidate nominated for election to the Company’s corporate bodies
- ensuring that the members of the Board of Directors and the nomination committee and the auditor are present at the general meeting
- making arrangements to ensure an independent chairman for the general meeting
Shareholders who cannot attend the meeting in person should be given the opportunity to vote. The Company should:
- Provide information on the procedure for representation at the meeting through a proxy
- Nominate a person who will be available to vote on behalf of shareholders as their proxy
- To the extent possible prepare a form for the appointment of a proxy, which allows separate voting instructions to be given for each matter to be considered by the meeting and for each of the candidates nominated for election
The Annual General Meeting for 2017 was held on the 10th of May, and was in all material respect carried through in accordance with item 6 in the recommendation with the following exceptions:
- The company does not appoint an independent proxy to vote on behalf of shareholders. In the company’s opinion the shareholder interests are duly protected through participation with a personal proxy or by granting a proxy with voting instructions to the chairman of the meeting, the chairman of the board or any person appointed by him.
- The recommendations of the nomination committee had not been finalised on the date of the notice calling the Annual General Meeting, and were made public 15 days prior to the date of the Annual General Meeting.
The Annual General Meeting in 2017 was chaired by an independent chairman. It is the intention of the board of directors to nominate an independent chairman also for future general meetings.
AKVA group did not conduct any Extraordinary General Meetings in 2017.
Deviation from the Recommendation: None other than as stated above
7. Nomination committee
The company should have a nomination committee, and the general meeting should elect the chairperson and members of the nomination committee and should determine the committee’s remuneration.
The nomination committee should have contact with shareholders, the board of directors and the company’s executive personnel as part of its work on proposing candidates for election to the board.
The nomination committee should be laid down in the company’s articles of association. The general meeting should stipulate guidelines for the duties of the nomination committee.
The members of the nomination committee should be selected to take into account the interests of shareholders in general. The majority of the committee should be independent of the board of directors and the executive personnel. At least one member of the nomination committee should not be a member of the corporate assembly, committee of representatives or the board. No more than one member of the nomination committee should be a member of the board of directors, and any such member should not offer himself for re-election to the board. The nomination committee should not include the company’s chief executive or any other executive personnel.
The nomination committee’s duties are to propose candidates for election to the corporate assembly and the board of directors and to propose the fees to be paid to members of these bodies.
The nomination committee should justify its recommendations.
The company should provide information on the membership of the committee and provide suitable arrangements for shareholders to submit proposals to the committee for candidates for election.
The Articles of Association provide for a nomination committee. The nomination committee shall evaluate and recommend candidates for directors elected by the shareholders as well as directors’ remuneration, both for the board of directors and for the nomination committee itself. The nomination committee shall consider and recommend to the shareholders for resolution at the general meeting on the following matters:
- Candidates for election as members of the Board of Directors
- Candidates for election as members of the Nomination Committee and the Chairman of the Committee
- The proposed remuneration of the Board of Directors and the members of the Nomination Committee
- Any proposed amendments to the Nomination Committee Charter
- Approve the text in the Annual report (Corporate Governance section) of the company, related to the Nomination Commitee
The nomination committee shall consist of three members elected by the shareholders at the general meeting. The nomination committee’s chairperson shall be a member of the nomination committee and shall be elected by the shareholders at the general meeting.
The nomination committee’s work is based on the nomination committee Charter approved by the Annual General Meeting in May 2007, which includes appropriate arrangements for shareholders to submit proposals to the committee for candidates for election.
The current nomination committee was elected by the ordinary Annual General Meeting on 10 May 2017 and consists of:
- Eivind Helland, (chair, for 2 years) General Manager, Blue Planet AS
- Bjørnar Mikalsen (for 2 years), Head of Sales, Skretting Nord
- Ingvald Fardal (for 2 years), MsC Business Administration
None of the nomination committee members are members of the board of directors.
The nomination committee is of the opinion that the composition reflects the common interest of all the company’s shareholders.
The work of the Committee
The nominating committee has held 4 meetings since the 2017 general meeting.
Deviation from the Recommendation: None
8. Corporate assembly and Board of Directors: composition and independence
The composition of the corporate assembly should be determined with a view to ensuring that it represents a broad cross-section of the company’s shareholders.
The composition of the board of directors should ensure that the board can attend to the common interests of all shareholders and meets the company’s need for expertise, capacity and diversity. Attention should be paid to ensuring that the board can function effectively as a collegiate body.
The composition of the board of directors should ensure that it can operate independently of any special interests. The majority of the shareholder-elected members of the board should be independent of the company’s executive personnel and material business contacts. At least two of the members of the board elected by shareholders should be independent of the company’s main shareholder(s).
The board of directors should not include executive personnel. If the board does include executive personnel, the company should provide an explanation for this and implement consequential adjustments to the organisation of the work of the board, including the use of board committees to help ensure more independent preparation of matters for discussion by the board, cf. Section 9.
The chairman of the board of directors should be elected by the general meeting so long as the Public Companies Act does not require that the chairman must be appointed either by the corporate assembly or by the board of directors as a consequence of an agreement that the company shall not have a corporate assembly.
The term of office for members of the board of directors should not be longer than two years at a time.
The annual report should provide information to illustrate the expertise of the members of the board of directors, and information on their record of attendance at board meetings. In addition, the annual report should identify which members are considered to be independent.
Members of the board of directors should be encouraged to own shares in the company.
Composition of the Board of Directors
The board of directors consists of 10 members, and currently has the following composition: Hans Kristian Mong (Chairperson), Anne Breiby (Deputy Chairperson), Frode Teigen, Evy Vikene, Nils Viga, Anthony James, Aino Olaisen, Tore Obrestad, Carina Jensen and Henrik A. Schultz. The 3 latter directors have been elected by and from the employees.
All of the shareholder-elected members of the board are independent from executive management and material business contacts. Three of the shareholder-elected members of the board are independent from the main shareholders of the company. The board of directors elects the chair and the deputy chair. All the members of the Board are generally encouraged to own shares in the company.
Hans Kristian Mong and Frode Teigen represent the largest shareholder of the company, Egersund Group AS. Anthony James represents Wheatsheaf Investments Ltd, the second largest shareholder of the company. The other members of the board of directors are independent of shareholders and other stakeholders. Further details of the individual directors can be found in the annual Report.
The nomination committee’s recommendation of candidates, including the basis of the recommendation, will be appended to the notice for the Annual General Meeting, which will be published on the company’s website and on the Oslo Stock Exchange’s reporting site, www.newsweb.no.
Deviation from the Recommendation: None other than as stated above regarding the board of director's competence to elect the chairman of the board.
9. The work of the Board of Directors
The board of directors should produce an annual plan for its work, with particular emphasis on objectives, strategy and implementation.
The board of directors should issue instructions for its own work as well as for the executive management with particular emphasis on clear internal allocation of responsibilities and duties.
In order to ensure a more independent consideration of matters of a material character in which the chairman of the board is, or has been, personally involved, the board's consideration of such matters should be chaired by some other member of the board.
The Public Companies Act stipulates that large companies must have an audit committee. The entire board of directors should not act as the company’s audit committee. Smaller companies should give consideration to establishing an audit committee. In addition to the legal requirements on the composition of the audit committee etc., the majority of the members of the committee should be independent.
The board of directors should also consider appointing a remuneration committee in order to help ensure thorough and independent preparation of matters relating to compensation paid to the executive personnel. Membership of such a committee should be restricted to members of the board who are independent of the company’s executive personnel.
The board of directors should provide details in the annual report of any board committees appointed.
The board of directors should evaluate its performance and expertise annually.
The board of directors has the final responsibility for the management and organisation of the company and supervising routine management and business activities. This involves that the board is responsible for establishing control arrangements to secure that the company operates in accordance with the adopted values and Code of Conduct as well as with shareholders’ expectations of good corporate governance. The board of directors primarily looks after the interests of all the shareholders, but is also responsible for the company’s other stakeholders.
The board’s main task is to ensure that the company develops and creates value. Furthermore the board of directors shall contribute to the shaping of and implementation of the Group’s strategy, ensure appropriate supervision and control of management and in other ways ensure that the Group is well operated and organised. The board sets the objectives for the financial performance and adopts the company’s plans and budgets. Items of major strategic or financial importance for the Group are the responsibility of the board. The board hires the CEO, defines his or her work description and authority and sets his or her salary and other compensation. The board each year produces an annual plan for its work as recommended.
Instructions to the Board of Director
The latest version of the board’s instructions was approved by the board in a board meeting on 10 April 2014. The instructions cover the following points: Composition of the board, the board’s duties, day-to-day management, calling of board meetings and related issues, the board’s decisions, board minutes, disqualification and conflict of interest, confidentiality obligation, convening general meetings, insider rules and ethical guidelines for conduct of business. The board of directors can decide to deviate from instructions in certain cases.
The board of directors receives regular financial reports on the Group’s economic and financial status.
In accordance with section 6-41 of the Public Companies Act AKVA group has established an audit committee, consisting of Anne Breiby (Chair) and Anthony James. The Group CFO acts as the secretary of the committee. The mandate and work of the audit committee is described in further detail under item 10 below.
The audit committee has been operating since 2011. 6 meetings were held in the committee during 2017.
The Compensation Committe
The company has established a compensation committee, and the current Charter for the compensation committee was approved by the board in a board meeting on 21 September, 2006. The committee’s tasks revolve around the CEO’s terms of employment and the remuneration of the executive management including salary levels, bonus systems, options schemes, pension schemes, employment contracts etc. The committee submits recommendations to the board of directors for final approval.
The current members are Nils Viga (Chair) and Frode Teigen. The chairperson of the board generally also participates in the meetings. The committee has had 2 meetings since the 2017 general meeting.
The Board’s self-evaluation
The board completes a self-evaluation annually in terms of efficiency, competence and the board’s duties in general. The evaluation is made available for the nomination committee.
Deviation from the Recommendation: None
10. Risk management and internal control
The board of directors must ensure that the company has sound internal control and systems for risk management that are appropriate in relation to the extent and nature of the company’s activities. Internal control and the systems should also encompass the company’s corporate values, ethical guidelines and guidelines for corporate social responsibility.
The board of directors should carry out an annual review of the company’s most important areas of exposure to risk and its internal control arrangements.
The Board of Directors and internal control
The board of directors ensures that the company has appropriate internal control procedures and appropriate risk management systems tailored to its business.
Managing operational risk primarily takes place within the operational subsidiaries, but with the company’s management as an active driving force through its positions in the boards of the subsidiaries. Generally, the subsidiaries have established adequate practices for such risk management.
The Group is exposed to currency, interest rate, and market risk, as well as credit risk and operational risk.
The Group has implemented a quality control system which further reduces operational risk. AKVA group ASA became ISO 9001:2008 certified as of December 2014.
The Groups' financial guidelines ensure the monitoring of financial risk. Management of exposure in financial markets, including currency, interest rate and counterparty risk, is emphasised in the company’s governing documents. Further details on these principles are provided in note 16 to the Group's financial statements and the parent company’s financial statements.
The Group has developed an authority matrix which is included in its governing documents.
Management regularly prepares performance reports that are reviewed by the board. The interim financial statements are subject to review in board meetings.
The Board’s work plan
The board of directors has established an annual work plan that includes an annual review of compliance of external and internal laws and regulations, risk and the HSE-situation, financial risks and identification of risk related to the strategic goals and risk handling. By carrying out the established work plan, the board controls that the company has sound internal control and systems for risk management for the company’s activities, including systems suitable for controlling the compliance with the company’s corporate values and ethical guidelines. The guidelines for corporate social responsibility are also included in the work plan.
The mandate of the committee is to monitor and evaluate the Group’s financial reporting, including to evaluate substantial accounting issues, accounting principles and procedures applied by the Group in its financial reporting to Oslo Stock Exchange. The committee is to evaluate the work of the Group’s external auditor, including the auditor’s independence from management and compliance with rules and regulations in regards to services beyond financial audit. The committee also discusses the scope of the audit with the external auditor as well as evaluates reports from the auditor to the board of directors and management of the Group. The audit committee nominates external auditor for the Group as well as propose compensation for the external auditor to the board of directors.
The audit committee is also monitoring the Groups internal control systems, including managements operational and financial risk management.
The audit committee is free to address any other issue it finds necessary to fulfil its mandate.
Deviation from the Recommendation: None
11. Remuneration of the Board of Directors
The remuneration of the board of directors should reflect the board’s responsibility, expertise, time commitment and the complexity of the company’s activities.
The remuneration of the board of directors should not be linked to the company’s performance. The company should not grant share options to members of its board.
Members of the board of directors and/or companies with which they are associated should not take on specific assignments for the company in addition to their appointment as a member of the Board. If they do nonetheless take on such assignments this should be disclosed to the full board. The remuneration for such additional duties should be approved by the board.
Any remuneration in addition to normal directors’ fees should be specifically identified in the annual report.
It is the board’s opinion that the size of the remuneration of the board of directors is in compliance with the criteria in the recommendation concerning inter alia the board’s responsibility and expertise.
Furthermore, the following applies to the remuneration:
Deviation from the Recommendation: None
- The remuneration is not linked to the company’s performance, and the board members are not granted share options
- None of the board members and/or companies with which they are associated, have taken on specific assignments for the company in addition to their appointment as a member of the board
- The remuneration of the board is proposed to the general meeting by the nomination committee
12. Remuneration of the executive management
The board of directors is required by law to prepare guidelines for the remuneration of the executive personnel. These guidelines are communicated to the Annual General Meeting. The board of director’s statement on the remuneration of executive personnel should be a separate appendix to the agenda for the general meeting. It should also be clear which aspects of the guidelines are advisory and which, if any, are binding. The general meeting should vote separately on each of these aspects of the guidelines.
The guidelines for the remuneration of the executive personnel should set out the main principles applied in determining the salary and other remuneration of the executive personnel. The guidelines should help to ensure convergence of the financial interests of the executive personnel and the shareholders.
Performance-related remuneration of the executive personnel in the form of share options, bonus programmes or the like should be linked to value creation for shareholders or the company’s earnings performance over time. Such arrangements, including share option arrangements, should be an incentive to good performance and be based on quantifiable factors over which the employee in question can have influence. Performance-related remuneration should be subject to an absolute limit.
Guidelines and terms
The board of directors and the compensation committee have the responsibility to establish guidelines and recommendations with regards to the remuneration of the CEO and the executive management. Each year the committee undertakes a thorough review of the remuneration and other salary to the CEO and the executive management. The review is based upon market sampling of similar positions. The structure and level of the remuneration and incentive system for the CEO and the executive management is determined by the board of directors. The fixed remuneration and performance-based remuneration is described in the notes to the annual accounts.
The incentive scheme for the group management consist of two components: i) an annual bonus limited to between 30% and 50% of annual salary, dependent upon individual and financial targets, for the years 2017, 2018 and 2019; and ii) a deferred bonus limited to between 30% and 50% of annual salary, dependent upon individual targets and the development of the company’s share price relative to the OSLO Seafood Index (OSLFX), for the same period.
The bonus plan do not exclude discretionary bonuses.
According to the established bonus regime and agreed terms, total bonuses of NOK 12,624,000 were paid out in 2017 to the Group's executive management based on the 2016 performance.
AKVA group introduced a share option plan in 2006, which allows the board of directors to grant options for the subscription of shares for an aggregate nominal value of NOK 1,012,108. The share option plan was approved by the general meeting on 6 October 2006. The options could be awarded both to leading employees and other selected employees. There are currently no outstanding options in accordance with this share option plan.
No members of management or other employees are currently entitled to receive share options.
In accordance with the Public Companies Act and the Code, the guidelines for the remuneration of the CEO and the executive management are communicated as a separate appendix to the Annual General Meeting.
Deviation from the Recommendation: None other than as stated above.
13. Information and communications
The board of directors should establish guidelines for the company’s reporting of financial and other information based on openness and taking into account the requirement for equal treatment of all participants in the securities market.
The company should publish an overview each year of the dates for major events such as its Annual General Meeting, publication of interim reports, public presentations, dividend payment date if appropriate etc.
All information distributed to the company’s shareholders should be published on the company’s website at the same time as it is sent to shareholders.
The board of directors should establish guidelines for the company’s contact with shareholders other than through general meetings.
Annual and periodic accounts
The company normally presents provisional annual accounts in late February. The complete annual report including annual financial statements and the Directors’ report is sent to all shareholders and other stakeholders in April/May and presented at the Annual General Meeting. The company also makes its interim accounts publicly available through the Oslo Stock Exchange publication system, as well as through presentations that are open to the public. The company’s financial calendar is published on the company’s website and through the Oslo Stock Exchange publication system. All shareholders have equal access to financial and other material company information.
Other market information
Public presentations are conducted in connection with the company’s interim reports. The interim presentation is also made available on the Group’s website and through the Oslo Stock Exchange publication system.
In the interim report the CEO reviews the result for the past period and comments on the development for the various products and market segments. Furthermore the CEO provides a summary of the market outlook and short term future prospects. The CFO also participates in these presentations. The CEO and CFO also maintain a dialog with and make regular presentations to analysts and potential investors.
The company considers it essential to keep shareholders and potential investors informed about its economic and financial development. Significant importance is also attached to securing that the same information is released to the whole market at the same time. From time to time the company will prepare an updated company presentation which is made available on the company’s home page http://ir.akvagroup.com/investor-relations/financial-info-/other-presentations-and-reports.
Deviation from the Recommendation: None
The board of directors should establish guiding principles for how it will act in the event of a take-over bid.
In a bid situation, the company´s board of directors and management have an independent responsibility to help ensure that shareholders are treated equally, and that the company’s business activities are not disrupted unnecessarily. The board has a particular responsibility to ensure that shareholders are given sufficient information and time to form a view of the offer.
The board of directors should not hinder or obstruct take-over bids for the company’s activities or shares.
Any agreement with the bidder that acts to limit the company’s ability to arrange other bids for the company’s shares should only be entered into where it is self-evident that such an agreement is in the common interest of the company and its shareholders. This provision shall also apply to any agreement on the payment of financial compensation to the bidder if the bid does not proceed. Any financial compensation should be limited to the costs the bidder has incurred in making the bid.
Agreements entered into between the company and the bidder that are material to the market's evaluation of the bid should be publicly disclosed no later than at the same time as the announcement that the bid will be made is published.
In the event of a take-over bid for the company’s shares, the company’s board of directors should not exercise mandates or pass any resolutions with the intention of obstructing the take-over bid unless this is approved by the general meeting following the announcement of the bid.
If an offer is made for a company’s shares, the company’s board of directors should issue a statement making a recommendation as to whether shareholders should or should not accept the offer. The board’s statement on the offer should make it clear whether the views expressed are unanimous, and if this is not the case it should explain the basis on which specific members of the board have excluded themselves from the board’s statement. The board should arrange a valuation from an independent expert. The valuation should include an explanation, and should be made public no later than at the time of the public disclosure of the board´s statement.
Any transaction that is in effect a disposal of the company’s activities should be decided by a general meeting, except in cases where such decisions are required by law to be decided by the corporate assembly.
The board of directors has established guidelines in the event of an offer for all or a substantial majority of the shares in AKVA group is made.
In the event of a take-over bid for the shares in the company, the board shall ensure that shareholders in the company are treated equally, and that the company’s business activities are not disrupted unnecessarily. The board shall ensure that shareholders are given sufficient information and time to form a view of the offer. The board shall not seek to prevent or obstruct take-over bids for the company’s business or shares unless there are particular reasons to do so.
Any agreement with a bidder for the shares of the company that acts to limit the company’s ability to arrange other bids for the company’s shares should only be entered into where such an agreement clearly is in the common interest of the company and the shareholders. This provision shall also apply to any agreement on the payment of financial compensation to a bidder if the bid does not proceed.
In the event of a take-over bid for the company’s shares, the board shall not exercise authorizations or pass any resolutions with the intention of obstructing the take-over bid unless this is approved by the general meeting subsequent to the announcement of the bid.
If an offer is made for the shares in the company, the board shall issue a statement making a recommendation as to whether shareholders should or should not accept the offer. The board's statement on a bid shall make it clear whether the views expressed are unanimous, and if this is not the case it shall explain the basis on which specific members of the board have excluded themselves from the board's statement. Before issuing its final statement the board shall arrange for an evaluation of the financial aspects of the bid from an independent expert. The evaluation shall include an explanation, and shall be made public no later than at the time the board's statement is made public.
Deviation from the Recommendation: None.
The auditor should submit the main features of the plan for the audit of the company to the audit committee annually.
The auditor should participate in meetings of the board of directors that deal with the annual accounts. At these meetings the auditor should review any material changes in the company’s accounting principles, comment on any material estimated accounting figures and report all material matters on which there has been disagreement between the auditor and the executive management of the company.
The auditor should at least once a year present to the audit committee a review of the company’s internal control procedures, including identified weaknesses and proposals for improvement.
The board of directors should hold a meeting with the auditor at least once a year at which neither the chief executive nor any other member of the executive management is present.
The board of directors should establish guidelines in respect of the use of the auditor by the company’s executive management for services other than the audit.
The board of directors must report the remuneration paid to the auditor at the Annual General Meeting, including details of the fee paid for audit work and any fees paid for other specific assignments.
An outline of the work planned by the auditor is presented to the audit committee every year. The auditor is always present during the board’s discussion of the annual accounts. At this meeting the board is briefed on the annual accounts and any other issues of particular concern to the auditor. Part of the meeting is also executed without the presence of the CEO and other executive management. The chairman of the board also has an annual separate meeting with the auditor. The board has implemented guidelines in respect of use of the auditor by the executive management for services other than the audit.
Deviation from the Recommendation: None.
16. Management and internal procedures
This point is not covered by the Corporate Governance Recommendation.
The Group chief executive officer/CEO is in charge of the day-to-day management of the Group, including responsibility for the company and the other companies in the Group being organised, operated and further developed in accordance with applicable legislation, the Articles of Association and decisions taken by the board of directors and the Annual General Meeting.
The executive management consists of 9 individuals. In addition to the Group CEO, the executive management consists of the Chief Financial Officer (CFO), the Chief Operating Officer (COO) Cage Based, the Chief Operating Officer (COO) Land Based, the Chief Operating Officer (COO) Software, Senior Vice President (SVP) Supply Chain & Manufacturing, Regional President Americas & Australasia, Regional President Europe & Middle East and Senior Vice President (SVP) Technology & Development.
The executive management group meets monthly with a fixed agenda in addition to fixed weekly meetings and day-to-day contact on an operational basis and a number of other scheduled meetings and business reviews through the year.
The executive management group evaluates its own work and working methods annually. The evaluation is submitted to the board's compensation committee, and a condensed version is presented to the board of directors.
Each Group company (other than the company) has its own board of directors staffed by members of the executive management group and sometime other senior employees. External directors are also from time to time appointed.