The board of directors is required by law to prepare guidelines for the remuneration of the executive personnel. These guidelines are communicated to the annual general meeting.

The guidelines for the remuneration of the executive personnel should set out the main principles applied in determining the salary and other remuneration of the executive personnel. The guidelines should help to ensure convergence of the financial interests of the executive personnel and the shareholders.

Performance-related remuneration of the executive personnel in the form of share options, bonus programmes or the like should be linked to value creation for shareholders or the company’s earnings performance over time. Such arrangements, including share option arrangements, should incentivise performance and be based on quantifiable factors over which the employee in question can have influence. Performance-related remuneration should be subject to an absolute limit.



The Public Companies Act includes rules on a statement in respect of the remuneration of executive personnel that is to be prepared by the board of directors and considered by the general meeting. The statement of policy on the remuneration of executive personnel should be clear, easily understandable and specific.

The statement of policy on the remuneration of executive personnel can, for example, include an explanation of how the choice of performance criteria for performance-related remuneration contributes to the long-term interests of the company, and of the methods applied in order to determine whether performance criteria have been fulfilled. In addition, the statement can include the guidelines applied in respect of vesting periods, allotment dates, exercise dates and lock-up periods and compensation for loss of office, as well as explaining the comparables or benchmark evidence that the company uses in determining its remuneration policy.

Performance-related remuneration

Performance-related remuneration should not be such as might encourage a short-term approach that could be damaging to the company’s long-term interests.

Where a company’s earnings or share price are heavily influenced by external forces, the board of directors should consider using other forms of incentive arrangement where the incentive can be linked to quantifiable targets over which the executive personnel has a greater degree of influence.

Great care should be taken when awarding options or similar benefits to executive personnel.

The board of directors should ensure that simulations are carried out of the effects of the structure of performance-related remuneration as part of the evaluation of the possible outcome of the structure that is selected.

Any share option schemes should be combined with direct ownership of the underlying shares in order to make the interests of members of management more symmetrical with those of the company’s other shareholders. In order to reduce the risk of an unrepresentative financial result, the dates of vesting, issue and exercise of options and other performance-based remuneration should be spaced out over time, and any shares acquired through the exercise of options should be subject to a minimum period of ownership. Executive personnel should be encouraged to continue to hold a significant proportion of shares they receive beyond the expiry of the relevant lock-up periods.

The company should seek to ensure the right to demand the repayment of any performance-related remuneration that has been paid on the basis of facts that were self-evidently incorrect, or as the result of misleading information supplied by the individual in question.


The company’s report on corporate governance, cf. Section 1 of the Code of Practice, should provide an account of all aspects of the individual remuneration of the chief executive and other executive personnel, cf. the requirements set out in the Public Companies Act and the Accounting Act. Alternatively, the corporate governance report may make a clear reference to the sections of the accounts where the statement on executive remuneration and information on such remuneration is provided.

The chief executive is appointed by the board of directors and the board of directors determines his or her remuneration (unless the articles of association delegate this authority to some other corporate body), cf. Asal. § 6-2.

The board shall (unless the articles of association delegate this responsibility to some other corporate body) produce a statement on the how the salary and other remuneration etc. of the company’s executive personnel for the current financial year is determined, cf. Asal. § 6-16a. The statement shall also provide an account of the company’s policy on the remuneration of executive personnel applied in the previous financial year. The statement shall be considered by the company’s annual general meeting, cf. Asal. § 6-37. The board of directors shall determine the salary and other remuneration of the executive personnel at a meeting of the board, cf. Asal. § 6-19.

The guidelines for arrangements in respect of granting shares, subscription rights, options and other forms of remuneration linked to shares or the performance of the company’s share price or the share price of other companies in the same group shall be binding on the board of directors unless the articles of association provide otherwise. In other respects, the guidelines are advisory, but the articles of association may stipulate that they shall be binding. If the board enters into an agreement that deviates from the guidelines, the reason for such deviation shall be stated in the board minutes.

The remuneration and loans to/security granted in favour of each member of the executive personnel must be agreed by the board of directors at a meeting of the board, cf. Asal. § 6-19, and must be reported in the notes to the annual accounts, cf. Regnskapsloven § 7-31 and §7-32, and also in any prospectus produced for an invitation to subscription or purchase or for admission to listing of negotiable securities on a regulated market, cf. Securities Trading Regulations, § 7-13, equivalent to Commission Regulation (EU) No. 809/2004 Annex 1, Items 15, and 17.2.