Icelandair: Final Agenda and Proposals – Annual General Meeting 3 March 2022
17 Febrero 2022 - 10:12AM
Icelandair: Final Agenda and Proposals – Annual General Meeting 3
March 2022
AGENDA
- The Board of Director‘s report on Icelandair Group‘s
operations in 2021
-
Confirmation of Annual Accounts and decision on the handling of
profit or loss for the financial year
-
Decision on payments to Board Members
-
Proposal of the Board of Directors regarding the Remuneration
Policy
-
Report and proposal from the Nomination Committee regarding Board
Membership
-
Election of Board Members
-
Election of Auditors
-
Share-Based Incentive Program
-
Changes to the Articles of Association
-
Authorization to purchase Treasury Shares
-
Other lawfully submitted matters
PROPOSALS
- Annual Accounts (Item 2)
The Board of Directors proposes to the Annual
General Meeting that the Annual Accounts of theCompany for 2021
will be approved.
- Dividends payments (Item
2)
The Board of Directors proposes to the Annual
General Meeting that no dividends will be paid for the 2021
financial year.
- Remuneration to Board
Members (Item 3)
The Board of Directors proposes to the Annual
General Meeting that remuneration to Board Members and
Sub-Committee Members shall remain unchanges: Each Board Member
will receive ISK 330,000 per month, the Chairman will receive ISK
660,000 per month, the Deputy Chairman will receive ISK 495,000 per
month, Sub-Committee Members will receive ISK 120,000 per month,
the Chairman of the Audit Committee will receive ISK 275,000 per
month and the Chairman of other sub-committees will receive ISK
150,000 per month. The Board of Directors will decide on
compensation for the members nominated by shareholders in the
Nomination Committee. Compensation will be paid on hourly
basis.
- Remuneration Policy (Item
4)
The Board of Directors proposes to the Annual
General Meeting that the attached updated Remuneration Policy will
be approved. The main changes are as follows:
- More thorough description of the
total compensation scheme of the Company and main components of
performance assessment.
- More thorough description and
rationale regarding base salaries, short-term incentives (bonus
scheme) and long-term incentives (stock options).
- Terms and conditions of stock
option programs have been added.
- Description of the Company’s Equal
Pay System has been added.
The updated Remuneration Policy is a part of the
meeting documents. The main reason for the proposed changes to the
Remuneration Policy is to provide shareholders with more detailed
information on the Company’s compensation scheme and performance
assessment. The updated policy reflects the Company’s efforts to
attract and retain exceptional employees and align their interests
with the interests of the Company and the shareholders.
Furthermore, terms and conditions have been added for a stock
option program for the Company’s key employees provided that such
program will be approved on a shareholders’ meeting.
- Nomination Committee
(item 5)
Icelandair Group’s Nomination Committee proposes
that the following candidates, listed in alphabetical order, will
be elected to the Board of Directors of Icelandair Group hf. on the
Company’s Annual General Meeting:
- Guðmundur Hafsteinsson
- John F. Thomas
- Matthew Evans
- Nina Jonsson
- Svafa Grönfeldt
- Auditors (Item 7)
The Board of Directors proposes to the Annual
General Meeting that KPMG ehf. will be the Company’s auditors.
- Share-Based Incentive
Program (Item 8)
The Board of Directors proposes to the Annual
General Meeting that a long-term incentive program will be
approved.
The objective of the performance based incentive
program is to strengthen the Company by incentivizing its key
employees to deliver exceptional performance, set clear standards
for expected performance and significantly reduce the likelihood of
such employees leaving the Company on a short notice. Furthermore,
the program would assist the Company in attracting and retaining
good key employees worldwide and thus strengthen the
competitiveness of the Company. This would both be benificial for
the Company’s interests short-term and long-term to secure
exceptional employees in the key employee positions going forward.
Such long-term incentive program would also be beneficial to the
shareholders since it would align the interests of shareholders
with those of the key employees which would not solely be
compensated by their annual base salary but also based on their
performance and the success of the Company. Short-term and
long-term incentive schemes also require an effective performance
evaluation and the company will strengthen that process in 2022 by
implementing a new and more robust evaluation system. The new
evaluation system is intented to include more regular reviews, be
less subject to discretionary bias and to set clear standards for
expected performance. The estimated cost of the incentive
program is USD 3.6 million based on the Black-Scholes model.
However, the program would not require any direct cash outflow from
the Company since new shares would be issued in order to fulfill
the Company’s obligations in relation to the incentive program
instead of purchase of treasury shares.
The Board of Directors proposes that the terms
of the long-term incentive program will be as follows:
Type of share-based incentive
program: Stock options
Participants: The Executive Committee and
other selected key employees.
Total number of share options: The total
maximum amount of shares granted under the program would be 900
million during a three year period following the approval of the
long-term incentive program on the Annual General Meeting 2022.
Granting: Granting would be yearly and
based on the performance of the participants in the preceding year.
No more than 250 million shares will be granted under the program
in 2022.
Vesting time: Three years from the granting
date.
Exercise period: One year following the
three years vesting period. Exercise periods are two per year in
April and October for 15 days following the disclosure of the
respective Q1 and Q3 financials.
Exercise price: The exercise price will be
based on the share price in Icelandair Group at closing of NASDAQ
Iceland on granting date with the addition of 3% annual interests.
The exercise price shall be adjusted for any future dividend
payments decided after the granting date.
Other key terms and conditions:
- The Remuneration Committee shall
have sole discretion on granting to each participant based on
performance assessment.
- Vested stock options which will not
be exercised within the exercise periods will become invalid.
- Participants are required to hold
shares, corresponding to the net profit gained from the options
(after tax) measured in total share value as decided by the Board
of Directors and the Remuneration Committee.
- The options are valid only if the
holder is still employed by Icelandair Group or its subsidiaries on
the exercise date. The Remuneration Committee can waive this
condition under certain circumstances.
- If a change of control occurs, in
accordance with Article 100 of the Icelandic Takeovers Act No.
108/2007, any outstanding stock options shall vest.
- The Company shall not grant any
kind of loans or guarantees on relation to the stock option
program.
- Rights and obligations under the
stock option program cannot be assigned to a third party.
- The Company has the option to
reclaim, in whole or in part, remuneration that has been based on
false, misleading, insufficient or incorrect data, or if the
recipient acted in bad faith in respect of other matters, which
resulted in too high remuneration or remuneration which would
otherwise not have been granted.
- The Company will issue new shares
following the exercise periods corresponding to the total number of
exercised shares. The Annual General Meeting 2022 approves that the
Board of Directors will have authority to issue new shares in
accordance with the terms of the long-term incentive program.
- Changes to the Articles
of Association (Item 9)
The Board of Directors proposes the following
changes to Article 15 of the Articles of Assocation. It is being
proposed that the current Article 15.1, which has lapsed, is
replaced with the following provisions subject to approval of Item
9.
“The Company’s Board of Directors is authorized
to increase the share capital of the Company in stages by up to ISK
900,000,000 shares of nominal value. This authorization shall only
be utilsed to fulfil terms under stock option agreements granted
pursuant to the Company’s Share-Based Incentive Program approved by
the Company’s annual general meeting held on 3 March, 2022. The
shareholders of the Company will not have pre-emptive subscription
rights to shares issued pursuant to this provision. Share prices
and subscription shall be in accordance with the Share Based
Incentive Program and stock option agreements entered into pursuant
to that. This authorization shall be valid until 31 December
2027.”
- Authorization to purchase Treasury
Shares (Item 10)
The Board of Directors of Icelandair Group
proposes to the Annual General Meeting that the Company will be
authorized to purchase in the next 18 months up to 10% of its own
shares in accordance with Article 55 of the Icelandic Companies Act
No 2/1995 in order to set up a formal buy-back programme in
accordance with the provisions of Article 5 of MAR (Regulation (EU)
No 596/2014 of the European Paliament and of the Council), which
has been transposed into Icelandic legislation with Act No 60/2021,
as well as the provisions of the Commision Delegated Regulation
(EU) 2016/1052 which contains regulatory technical standards for
the conditions applicable to buy-back
programmes.
All the current board members have confirmed
that they intend to seek renewed mandate from shareholders at the
meeting. Those who intend to run for the Board of Directors shall
notify the Board of Directors of their candidacy at least 7 days
before the meeting. A request for proportional or cumulative voting
shall be presented to the Board of Directors at least 5 days before
the meeting.
Shareholders have the right to put items on the
agenda of the Annual General Meeting and submit proposed
resolutions, provided a request thereof has been received by the
Company no later than 10 days prior to the meeting via email to
compliance@icelandairgroup.is.
For further information:
Ari Guðjónsson, General CounselEmail:
ari@icelandairgroup.is or Tel: +354 661-2188
- nomination-committee-report-2022
- remuneration-policy-2022
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