Executive
Remuneration
Report 2023
Annual Report and Accounts 2023
Contents
PG 02
Introduction
PG 05
Board of Directors' Remuneration
PG 08
Executive Management Remuneration
PG 14
Equity-Based Payment and Shareholdings
PG 18
Management Statement
Introduction
The Executive Remuneration Report outlines the principles governing the compensation of members of the Board of Directors and Executive Management Team of BlueNord ASA, as well as their actual remuneration in 2023.
1 | BlueNord | Executive Remuneration Report 2023 |
Introduction
Introduction
2 | BlueNord | Executive Remuneration Report 2023 |
Introduction
The Executive Remuneration Report outlines the principles governing the compensation of members of the Board of Directors and Executive Management Team of BlueNord ASA ('BlueNord'), as well as their actual remuneration in 2023.
2023 Highlights
Tyra Redevelopment Project
Introduction
Demonstrated
The Executive Remuneration Policy approved by the Annual General Meeting ('AGM') on 19 May 2022 was applied throughout the year. The Policy is designed to align with the Company's overall business objectives, long-term interests, and financial sustainability. To attract, motivate, and retain qualified and high-performing executives in a global industry, total remuneration for BlueNord executives must be competitive. The compensation offered should reflect the required accountabilities, reward success, and be aligned with shareholder interests and BlueNord's strategy.
The Executive Remuneration Report adheres to the requirements laid out in the Norwegian Public Limited Companies §§ Act 6-16a and 6-16b.
The subtotals and totals in some of the tables may not equal the sum of the amounts shown due to rounding.
Disclosures
-
No deviations from the Executive Remuneration Policy have been made by the Board of Directors in 2023. To comply with Danish employment legislation, for executives formally employed with a Danish affiliate under the Danish Salaried Employees Act but holding a global executive role with the Company, the statutory notice period is mutually extended by two months. This means that the CFO has a notice period of three months if resigning.
If the Company terminates the employment, the employer's notice period is currently seven months. Since first date of employment in BlueNord, the COO's terms is a notice period of three months if resigning; the employer's notice period is 12 months. - BlueNord has not during 2023 reclaimed any remuneration paid to executives.
- No executive in the BlueNord Group has received remuneration from any entity other than the one that is their formal employer.
First gas from the Tyra II field was achieved in March 2024, with ramp-up to maximum technical capacity expected within four months. This will lead to a step-change in performance for BlueNord, with a doubling of production combined with a lowering in lifting cost and emissions intensity.
Strong operational performance
Average production of c. 24.9mboe/d for the year is in the upper range of the yearly production guidance provided of 24.5-25 mboe/d at the start of 2023.
Secured further long-term contribution from the 'DUC'
The completion of the Tyra project will provide a strong foundation for future reserves growth, unlocking gross reserves in excess of 200 mmboe and production growth to 55mboe/d in 2025. Optimisation activities have been successfully completed and an active approach continued, to reduce base decline and maximise economic recovery from the DUC.
environmental commitment
BlueNord is actively contributing to the energy transition by pursuing emissions reduction opportunities. This includes ending routine flaring in the DUC, investing in projects and studies for Carbon Capture Storage ('CCS') within and outside the DUC partnership and investing in CarbonCuts, an early-stage onshore CCS project in Denmark. BlueNord's commitment to reducing emissions is further demonstrated by the link between performance and the margin payable under the Company's USD 1.1 billion reserve-based lending ('RBL') facility.
Strong and robust financial position
BlueNord's balance sheet remained strong in 2023 and the Company demonstrated strong cashflow generation and a continued stable liquidity position. Attractive commodity price hedging levels have been achieved with gas hedging above market spot and forward prices, while the interest- rate swap at 0.4% on $1bn of principal in July 2021 has significantly reduced borrowing costs in 2023 and will continue to do so until June 2024.
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Introduction
Introduction continued
A year of challenge and growth
The Remuneration Committee serves as a preparatory and advisory committee for the Board on matters related to Executive Management's compensation. It is established and composed solely of Board members.
Committee member | Meetings attended |
Marianne Lie (Chair of Committee)
Jan Lernout (member)
The Board's Remuneration Committee's main activities 2023
Previous performance period
- Reviewing the 2022 results and recommending the achievement of the Annual Performance Bonus Programme and its metrics.
- Reviewing achievement of the 2022 Long-Term Incentive ('LTI') programme's KPIs and recommending the first of three awards set for the programme's vesting period 2022-2024.
Current performance period
- Initiating and reviewing the Executive Remuneration Benchmark report for the Company's executive in relation to the general market and a defined peer group prepared by an external consultancy.
- Reviewing and recommending the proposed annual salary increase for executives and staff.
- Discussing and endorsing the 2023 KPIs for the Annual Performance Bonus Programme.
- Reviewing and endorsing the 2023 Long-Term Incentive ('LTI') Performance Share Programme, its KPIs, plan document and implementation plan.
- Discussing appointment and endorsing the employment terms for the new Chief Financial Officer ('CFO').
- Reviewing and recommending Bluenord's Tax Protection Policy for relevant position categories within the Global Mobility regime.
- Discussing YTD achievement of 2023 KPIs for the Annual Performance Programme.
Governance activities
- Reviewing and endorsing the 2022 Executive Remuneration Report, prior to approval by the Board and advisory approval at the Annual General Meeting ('AGM') in May 2023.
- Reviewing the Executive Remuneration Policy, no changes proposed to the policy approved at the AGM in May 2022.
- Preparing the Executive Remuneration Report for 2023.
- Approving minutes of meetings and following up on actions set from the Remuneration Committee's meetings.
Future performance periods
- Discussing KPIs for the Annual Performance Bonus Programme 2024 (STI).
- Reviewing the LTI programme principles and relevant KPIs prior to 2024 grant.
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Board of Directors'
Remuneration
Board of
Directors'
Remuneration
5 | BlueNord | Executive Remuneration Report 2023 |
Board of Directors' Remuneration
The General Meeting determines the remuneration of the Board and its
sub-committees. The Nomination Committee proposes the remuneration of the Board to the General Meeting. The Board must approve of any Board member's consultancy work for the Company if relevant and any remuneration for such work.
The Board members do not have pension schemes or termination payment agreements with BlueNord. There are no employee-elected Board members.
All BlueNord Board meetings in 2023 were conducted by video conference. Additionally, the Board and BlueNord Executive Management held a physical meeting to discuss strategy.
Board of Directors'
Remuneration
Fee structure
Board of | Audit | Remuneration | ESG* | Nomination | |
2023 fee structure in USD | Directors | Committee | Committee | Committee | Committee |
Chair | 500,000 | 10,000 | 5,000 | 5,000 | 1, 500/meeting |
Member | 60,000 | 5,000 | 5,000 | 5,000 | 1, 500/meeting |
- Environmental, Social and Governance.
Committee fees approved at the AGM May 2023 and apply until AGM 2024. Such fees are paid on a quarterly basis.
Board of Directors' 2023 remuneration
In thousands USD
Period served on the Board | ||||||||||||
Audit | Remuneration | ESG | Nomination | Base | Total | |||||||
Board member | Position | From | To | Committee | Committee | Committee | Committee | fee(2) | Bonus | LTI | Fee | |
Riulf Rustad | Executive Chair | 27/03/2015 | - | - | - | - | - | 500 | - | - | 500 | |
Marianne Lie | Board member | 26/05/2016 | - | Chair | Chair | - | - | 75 | - | - | 75 | |
Tone Kristin Omsted | Board member | 26/05/2016 | - | Member | - | - | - | 65 | - | - | 65 | |
Colette Cohen | Board member | 15/09/2019 | - | - | - | Chair | - | 65 | - | - | 65 | |
Robert J. McGuire | Board member | 02/03/2020 | - | - | - | Member | - | 65 | - | - | 65 | |
Jan Lernout | Board member | 19/05/2021 | - | - | Member | - | - | 65 | - | - | 65 | |
Peter Coleman(1) | Board member | 19/05/2021 | - | Member | - | - | - | - | - | - | - | |
Total Board remuneration 2023 | 835 | - | - | 835 | ||||||||
Nomination Committee remuneration
Period served on the Board | |||||||||||
Audit | Remuneration | ESG | Nomination | Base | Total | ||||||
Board member | Position | From | To | Committee | Committee | Committee | Committee | Fee(2) | Bonus | LTI | Fee |
Richard Sjøquist | 27/03/2015 | - | - | - | - | Chair | 8 | - | - | 8 | |
Anette Malm Justad | 28/06/2018 | - | - | - | - | Member | 8 | - | - | 8 | |
Kristian Utkilen | 20/05/2015 | - | - | - | - | Member | 8 | - | - | 8 | |
Total Nomination Committee | 23 | - | - | 23 | |||||||
- Peter Coleman has voluntarily waived his right to compensation for his Board engagement.
- Board remuneration includes committee fees for four quarters of 2023.
The overview includes remuneration earned in 2023 by the Board members in their capacity as such on the Board of Directors of BlueNord ASA. The historical remuneration to the Board of Directors for 2019 - 2023 is available on page 7.
The overview of the Board of Director's holdings of shares and share options is presented in the section 4 'Equity-based payment and shareholdings', pages 14-17.
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Board of Directors'
Remuneration
Board of Directors' Remuneration continued
Board of Directors' Remuneration summary 2019-2023
In thousands USD
2023 | 2022 | 2021 | 2020 | 2019 | ||||||||||||||||
Total | Variable | Change | Total | Variable | Change | Total | Variable | Change | Total | Variable | Change | Total | Variable | |||||||
Name | Role | fee | portion % | %(9) | fee | portion % | % | fee | portion % | % | fee | portion % | % | fee | portion % | |||||
Riulf Rustad(1) | Executive Chair | 500 | 0% | 0% | 500 | 0% | -29% | 700 | 29% | 0% | 700 | 29% | -89% | 6,422 | 92% | |||||
Marianne Lie(2) | Board member | 75 | 0% | 5% | 71 | 0% | 19% | 60 | 0% | 0% | 60 | 0% | -36% | 94 | 52% | |||||
Tone Kristin Omsted(2) | Board member | 65 | 0% | 2% | 64 | 0% | 6% | 60 | 0% | 0% | 60 | 0% | -25% | 80 | 44% | |||||
Colette Cohen(3) | Board member | 65 | 0% | 2% | 64 | 0% | 6% | 60 | 0% | 0% | 60 | 0% | 233% | 18 | 0% | |||||
Robert J. McGuire(4) | Board member | 65 | 0% | 2% | 64 | 0% | 6% | 60 | 0% | 20% | 50 | 0% | 100% | n/a | n/a | |||||
Jan Lernout(5) | Board member | 65 | 0% | 2% | 64 | 0% | 72% | 37 | 0% | 100% | n/a | n/a | n/a | n/a | n/a | |||||
Peter Coleman | Board member | - | 0% | 0% | - | 0% | 0% | - | 0% | 0% | n/a | n/a | n/a | n/a | n/a | |||||
Yves-LouisDarricarrére(6) | Former Board member | n/a | n/a | n/a | n/a | n/a | -100% | 23 | 0% | -62% | 60 | 0% | 233% | 18 | 0% | |||||
Chris Bruijnzeel(7) | Former Board member | n/a | n/a | n/a | n/a | n/a | -100% | 23 | 0% | -62% | 60 | 0% | 233% | 18 | 0% | |||||
Lars Purlund(2,8) | Former Board member | n/a | n/a | n/a | n/a | n/a | -100% | 17 | 0% | -71% | 60 | 0% | -98% | 3,219 | 99% | |||||
Total | 835 | 0% | 1% | 826 | 0% | -21% | 1,041 | 19% | -6% | 1,110 | 18% | -89% | 9,870 | 93% | ||||||
- Bonus and option schemes are defined as variable remuneration. The variable portion in 2019 reflects the cash settlement related to the cancellation of the 2016 option scheme and the Fair Market Value ('FMV') of new options granted.
- Variable portion 2019 includes Fair Market Value ('FMV') of total options granted.
- Colette Cohen took up office 15 September 2019 and remuneration for 2019 was pro rata .
- Robert J. McGuire took up office 2 March 2020 and remuneration for 2020 was pro rata.
- Jan Lernout took up office 19 May 2021 and remuneration for 2021 was pro rata.
- Yves-LouisDarricarrère took up office 15 September 2019 and ended office 19 May 2021. Remuneration for 2019 and 2021 was pro rata.
- Chris Brunijnzeels took up office 15 September 2019 and ended office 19 May 2021. Remuneration for 2019 and 2021 was pro rata.
- Lars Purlund took up office 26 May 2016 and resigned 14 April 2021. Remuneration for 2021 was pro rata.
- Change related to full-year committee fee in 2023 vs three quarters paid in 2022.
For further information on the Board of Directors' equity-based remuneration, refer to pages 14-17.
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Executive Management
Remuneration
Executive
Management
Remuneration
8 | BlueNord | Executive Remuneration Report 2023 |
Executive Management Remuneration
Equity-Based Payment and Shareholdings
BlueNord's current Executive Remuneration Policy was approved by the AGM on 19 May 2022; 72.54 percent of issued voting shares voted; 99.97 percent (2021 voting: 86.75 percent) voted in favour and 0.03 percent (2021 voting: 13.25 percent) voted against the proposed policy, representing respectively 72.52 percent (2021:
54.58 percent) and 0.02 percent (2021: 8.3 percent) of the share capital.
Executive management remuneration In thousands US dollars
Remuneration is based on the same pillars and principles for both executives and employees:
- A clear and transparent compensation policy.
- Compliance with regulatory requirements and principles of good business conduct.
- Fair treatment of all employees.
- Sustainable pay linking remuneration to performance, actual results and stakeholder value-creations.
Remuneration of the executive management The total remuneration for executives shall be competitive to attract, motivate and retain qualified and high-performingexecutives in a global industry. Compensation offered is to reflect the accountabilities, reward success in value-creation,ensure alignment to strategy and shareholders' interests and reflect market trends and practices to remain competitive. Total remuneration for executives consists of three main elements: fixed pay, pension and benefits, and variable pay.
The Board of Directors decides on individual compensation for CEO and Chief Financial Officer ('CFO'). The CEO decides for other Executives, seeks advice, and informs the Remuneration Committee and the Board when applicable.
Employment period | Fixed remuneration | Variable pay | ||||||||||||
Other | Fixed | Variable | ||||||||||||
Executive Management | Position | From | To | Salary | benefits | Pension | STIP(1) | LTI(2) | Extraordinary items | Total Remuneration | % | % | ||
Euan Shirlaw(3) | Chief Executive Officer | 01/10/2019 | - | 533 | 4 | 30 | 362 | 293 | - | 1,221 | 46% | 54% | ||
Jacqueline Lindmark Boye | Chief Financial Officer | 01/11/2022 | - | 275 | 1 | 30 | 179 | 158 | - | 643 | 48% | 52% | ||
Marianne Eide | Chief Operating Officer | 01/01/2022 | - | 309 | 4 | 19 | 177 | 184 | - | 693 | 48% | 52% | ||
Cathrine Torgersen | Chief Corporate Affairs Officer | 01/01/2020 | - | 255 | 2 | 19 | 138 | 151 | - | 566 | 49% | 51% | ||
Total executive management remuneration | 1,372 | 11 | 98 | 856 | 787 | - | 3,124 | 47% | 53% | |||||
- Short Term Incentive Programmes. Approved bonus expected to be paid in April 2024.
- Long Term Incentive Programmes. Performance shares granted according to programme terms based on average volume-weighted average price ('VWAP') in December 2022 of NOK 386.92. While long-term incentives are fully reported with FMV in year of grant, these vest over three years in accordance with delivery against plan targets. FMV based on a Monte Carlo simulation model.
- Pension is paid as pension allowance over salary equal employer contribution less national insurance, according to BlueNord UK pension policy. Employee contribution paid.
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Disclaimer
Bluenord ASA published this content on 10 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 April 2024 05:20:05 UTC.