Incentives of the Managing Director

The compensation of the managing director may in addition to regular monetary salary consist of a fringe benefits, merit pays, company shares and share options. Conditions on compensation bound to the company’s results are common in managing director agreements [1.6.2.4 Managing Director Agreement]. Issues relating to the compensation of the managing director fall under the decision-making power of the board of directors. See further Rewarding and incentive schemes [2.2.6 Rewarding and Incentive Schemes]

In listed companies, the decision regarding the compensation of the managing director must be grounded on a remuneration policy presented to the general meeting of the company, and it must be addressed in the general meeting every four years. The first remuneration policy must be presented at latest in the annual general meeting of the company held after 1st of January 2020. The general meeting’s decision to uphold the remuneration policy is advisory. A listed company may temporarily derogate from the remuneration policy presented to the general meeting in order to ensure the company’s long-term interests. Such derogation must be carried out in accordance with the procedures defined in the remuneration policy.