REC Silicon Annual Report 2019

58 Notes to the consolidated financial statements, REC Silicon Group REC Silicon Annual Report 2019 MANAGEMENT AND BOARD OF DIRECTORS’ COMPENSATION, LOANS, SHARES, BONDS Salary and other compensation to the Group’s Board of Directors andManagement for 2019 and 2018 are described below. With regard to the determination of salary and other compensation for leading employees for 2020, the Board of Directors will propose guidelines at the 2020 Annual General Meeting that include factors mentioned below. The success of REC is dependent on the competencies, performance and dedication of our employees. Compensation packets are designed to support recruitment, development and retention of the right talent, reward past achievements, and incentivize future strong performance. Fixed base salary levels are determined based on the local market conditions for positions. Performance bonuses are considered and provided for employees whose achievement of performance objectives can be measured through clearly established result parameters or Key Performance Indicators (KPIs). KPI’s should include both financial performance and operational performance tied to each operating facility. Maximumperformance bonus payouts are defined in the bonus plan document and range from15 percent to 20 percent of an employee’s annual salary. Bonus payouts are contingent upon the company’s financial condition and performance. Maximumperformance bonus payout for REC SiliconManagement varies between 33 percent and 100 percent of their established annual salary. The Group offers supplementary pension and personnel insurance to employees in accordance with local standards. In addition to the above-mentioned compensation components, the Group offers housing allowances, car allowances, cell phones, and a limited number of other benefits to selected employees. The Board of Directors also wishes to implement a synthetic incentive program in 2020 whereby employees’ entitlements are linked to the share price development of the Company’s shares. The program is expected to be a six-year program, where the first three years are a lock up period and the next three years will be the period over which the incentive payments will become payable, provided always that the share price is above the strike price. The strike price will be set at the time of grant to the market price at such time + 10 percent. There will be a maximum gain in each calendar year for each employee under the program, equal to the base salary for the employee for the calendar year. The entitlements under the programwill be lost if the employee’s employment is terminated. Total benefits offered under the program are subject to limitations. The Board of Directors has implemented incentive programs during previous periods whereby employee entitlements are linked to the share price development of the Company’s shares. See note 32 for details of share-based compensation programs. Compensation of the Group Management for 2019 (AMOUNTS IN USD) NAME BASE SALARY BONUS EARNED AND MAX% SHARE BASED PAYMENT PENSION BENEFITS OTHER TAXABLE BENEFITS Tore Torvund 807,649 0 -11,969 102,975 92,889 President and CEO 100% James A. May II 284,612 0 -4,741 19,600 2,167 CFO 40% Total 2019 1,092,260 0 -16,710 122,575 95,055 Compensation of the Group Management for 2018 (AMOUNTS IN USD) NAME BASE SALARY BONUS EARNED AND MAX% SHARE BASED PAYMENT PENSION BENEFITS OTHER TAXABLE BENEFITS Tore Torvund 801,315 0 -45,022 102,975 90,750 President and CEO 100% James A. May II 280,618 0 -17,599 16,307 12,113 CFO 40% Total 2018 1,081,933 0 -62,621 119,282 102,863 16