Remuneration
The remuneration committee shall have the task of advising on and making recommendations to the Board of Directors in relation to the remuneration paid to the members of the Board of Directors, and supervising the development of any other remuneration or reward systems of the Company.
Remuneration of the Board of Directors and the members of the Management Team
Any Director who is employed or is the holder of an executive office is entitled to such additional remuneration in respect of his executive role (whether by way of salary, commission, participation in profits or otherwise) as the remuneration committee may approve either in addition to or in lieu of his remuneration as a Director.
Any Director who, by request, goes or resides abroad for any purposes of the Company or who performs services which in the opinion of the Board of Directors go beyond the ordinary duties of a Director may be paid extra remuneration (whether by way of salary, commission, participation in profits or otherwise) or may receive such other benefits as the remuneration committee may approve.
Each Director is entitled to be reimbursed in respect of his reasonably and properly incurred travelling, accommodation and incidental expenses for attending and returning from meetings of the Board, committee meetings or the general meetings of Shareholders and is to be reimbursed in respect of all such expenses properly and reasonably incurred by him in the conduct of the Company’s business or in the discharge of his duties as a Director.
The Remuneration Committee sets the remuneration policy that aims to align Director remuneration with shareholders’ interests and attract and retain the best talent for the benefit of Faron. No Director is involved in discussions relating to their own remuneration. The remuneration of the Directors during the year ended 31 December 2023 is set out below:
BASIC SALARY
Executive Directors’ basic salaries are reviewed annually. The review process is managed by the Remuneration Committee with reference to market salary data, the
Executive Director’s performance and contribution to Faron during the year.
BONUSES
Executive Directors’ annual bonuses are based on the achievement of Faron’s strategic and financial targets and personal performance objectives. The Non-Executive Directors believe that bonuses are an incentive to achieve the targets and objectives and represent an important element of the total compensation of the Executive Directors; they have established that the annual bonus potential will be up to 50% for the Executive Directors.
LONGER TERM INCENTIVES
In order to further incentivise the Executive Directors and employees, and align their interests with shareholders, the Extraordinary General Meeting of the Company on 15 September 2015 approved a share option plan and granted share options to the members of the Board under this option plan. At the AGM held on 28 May 2019, the Company authorised the Board to implement a new share option plan for the employees and Directors of, and persons providing services to, the Group. Rules of that new option plan were approved by the Board on 20 November 2019. The most recent versions of the amendment Option plans 2015 and 2019 were resolved by the general meetings during 2023.
PENSION
Faron has a law-defined contribution plans under which it pays fixed contributions into a separate entity. The plans cover all the employees of Faron including the Executive Directors. Faron has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.
OTHER BENEFITS
The Chief Executive Officer and some employees have the possibility to take a company car allowance, which is part of their gross salary. All employees including Executive Directors have a company mobile phone that constitutes a company mobile phone allowance.
Option plans
The Company has two active option plans, initially established in 2015 (the “Option Plan 2015”) and 2019 (the “Option Plan 2019”), respectively.
Option Plan 2015 was adopted by the Company at the Extraordinary General Meeting held on 15 September 2015 and amended in the Annual General Meetings of 16 May 2017, 18 May 2020, 23 April 2021 and 22 September 2023, respectively. Option Plan 2015 allowed the Company to offer options for subscription free of charge to members of the Board and to such officers and employees of the Company as the Board sees fit. Each option entitles the holder of the option to subscribe for one ordinary share in the Company. Under the terms of Option Plan 2015, an aggregate maximum number of 1,800,000 options could be granted, such aggregate being made up of a maximum of 400,000 “2015A” options, the subscription period for which ended on 9 June 2016, a maximum of 400,000 “2015B” options, the subscription period for which ended on 30 September 2019, a maximum of 500,000 “2015C” options, the subscription period for which ended on 30 September 2019, and a maximum of 500,000 “2015D” options, the subscription period for which ended on 30 September 2019, all such options being exercisable until 30 September 2025.
The exercise price for ordinary shares based on “2015A” options is €3.71. The exercise price for ordinary shares based on “2015B” options is €2.90. The exercise price for ordinary shares based on “2015C” options is €8.39. The exercise price for ordinary shares based on “2015D” options is €1.09.
Option Plan 2019 was adopted by the Board on 20 November 2019 and amended on 19 March 2020 based on an authorisation by the Annual General Meeting of 28 May 2019, as amended in the Annual General Meeting of 18 May 2020. During 2023 the Option Plan 2019 was amended at the Annual General Meeting on 24 March 2023. Share Option Plan 2019 allows the Company to offer options for subscription free of charge to employees and directors of the Group (including any non-executive members of the Board) and any eligible person who provides services to the Group. Each option entitles the holder of the option to subscribe for one ordinary share in the Company. Under the amended rules of the Share Option Plan 2019, an aggregate maximum number of 4,350,000 options can be granted.