Vestas’ remuneration policy
The company’s remuneration policy reflects the interests of the shareholders and the company, taking into consideration any specific matters, including the assignments and the responsibility undertaken. In addition, the remuneration policy helps to promote long-term goals for safeguarding the company’s interests.
Vestas is a global Group based in Scandinavia - a fact which is reflected in the compensation and reward principles for Executive Management, Presidents, Senior Vice Presidents, Vice Presidents, Directors and Managers. The compensation and award principles are based on Mercer’s International Position Evaluation System, and Mercer Reward Surveys are used as valid benchmark. For all other employee groups, locally based statistics are used as basis for our Group’s compensation and reward standards. The purpose of the aligned compensation and reward system is to ensure competitive compensation and reward packages for all employees at all our destinations globally.
The Board of Directors finds that the information contained in the annual report on remuneration and the process involved in the General Meeting’s approval of the remuneration paid to members of the Board represents a fair balance between the need for openness about remuneration paid to members of the Board and the Executive Management and the need to ensure confidentiality about compensation to individual members. The company’s annual report will not include a detailed account of the remuneration policy and the principles for individual compensation.
Remuneration to the Board of Directors and Executive Management
Disclosures about the total remuneration to members of the Board of Directors and Executive Management, respectively, are provided in the annual report. The Board of Directors finds that this information is adequate for the shareholders to assess the compensation level for members of both the Board of Directors and the Executive Management. Against this background, the company’s annual report will not include details of the individual members’ remuneration conditions.
Remuneration to the Board of Directors
The Board of Directors receives a fixed annual fee for their board duty. Efforts are made to ensure that the remuneration of the Board corresponds to the remuneration level in comparable companies.
Remuneration paid to Board members is presented retrospectively for approval as an integral part of the annual report in accordance with the Danish Public Companies Act.
No special fees have been paid out. The Board of Directors are not comprised by any incentive programme (warrant programme, bonus scheme or similar) or by Vestas’ pension scheme, and at a possible take-over, they will not receive any compensation.
Remuneration to the Executive Management
For 2007, the Executive Management received a total remuneration of EUR 2m, see note 6 in the annual report. The remuneration of the Executive Management is considered to be in accordance with the remuneration level in comparable companies.
Details about the management’s option programme and share-holdings and changes hereto during the year are disclosed in the annual report.
Furthermore the annual report discloses that the Board of Directors and the Executive Management are not comprised by any Vestas pension scheme. The executive service contracts and severance schemes contain no unusual notices of termination, severance payments or agreements on pension after termination.
Incentive programme
Remuneration, including incentive schemes, is evaluated once a year.
The Articles of Association of Vestas Wind Systems A/S contain an authorisation to establish a warrant programme for the Board of Directors. See Article 3(3). Such programme has not yet been established. Only the General Meeting can authorise the establishment of incentive schemes for the Board of Directors.
The Articles of Association of Vestas Wind Systems A/S currently contain an authorisation to establish employee share and warrant programmes. See Article 3(2 and 3).
Future incentive programmes will be established according to prevailing legislation within this area.
Share option programmes for the Executive Management and selected executives have been established for the financial years 2006 to 2009.
2006 incentive programme
In 2006, it was decided to establish an incentive programme for the Executive Management and selected executives of the Group. The programme is based on options which give the participants a right to buy shares from the company’s treasury shares, and the allotment of options is based on the Group’s results for 2007. No options were allotted in 2006.
The targets were met in 2007, 56,448 options will be allotted for 2007 with a value of EUR1m at the grant date, see note 33 in the annual report.
New incentive programme
In 2007, the Group resolved to establish a new incentive programme for the Executive Management and selected executives of the Group. The total value of the option scheme that comprises the years 2007, 2008 and 2009 amounted to EUR 13m at the time of establishment, calculated on the basis of the Black-Scholes model. The exercise price has been fixed at DKK 380.50, equivalent to the closing price on 15 May 2007. Further details of the terms of the programme, see company announcements Nos. 22/2007 and 33/2007.
207,952 options were allotted in 2007, see note 33 in the annual report.
Severance schemes
The severance schemes do not contain uncommon terms of notice, severance pay and pension obligations towards the Board of Directors and the Executive Management.
Moreover, for the Board of Directors applies that at a possible take-over, they will not receive any compensation.
The service contracts for the members of the Executive Management contain notices of termination that are normal for executives in Danish companies. The members of the Executive Management will not receive any compensation in the event of termination in connection with a change of ownership of the company’s voting majority, or if the company is dissolved through a merger or demerger, but their notice of termination will be changed from 24 to 36 months.
The contents of the severance schemes are not announced.
Read more
The Articles of Association of Vestas Wind Systems A/S
Vestas annual report