MEDIVIR AB i
INTRODUCTION | OPERATIONS | DIRECTORS' REPORT | CORPORATE GOVERNANCE REPORT | FINANCIAL REPORTS | NOTES | OTHER INFORMATION |
Corporate Governance Report
The Parent Company is the Swedish public limited company, Medivir AB, whose shares are listed on the NASDAQ Stockholm stock exchange. Good corporate governance is an essential component of Medivir's efforts to create value for its shareholders and we endeavor at all times to:
- Generate optimum conditions for active and responsible corporate governance.
- Achieve a well-balanced division of responsibility between owners, the Board of Directors, and the company management.
- Maintain a high level of transparency in relationships with owners, the capital market, employees and society at large.
Compliance with the Swedish Code of Corporate Governance ("the Code")
Medivir has applied the Code since July 1, 2008 and has undertaken to follow best practice, wherever possible, with regard to corporate governance. The company has not deviated from any of the provisions of the Code in 2022.
Decision-making at shareholders' meetings
Anette Lindqvist. Uli Hacksell was elected to serve as Chairman of the Board.
- The Auditors' fees for the period until the next AGM shall be payable upon approval of their invoice within the framework of the amount quoted.
- Remuneration guidelines to senior executives.
- Procedures for the appointment of the Nomination Committee and its work.
- The Directors' fees for the period until the next AGM were set at a maximum of SEK 1,730,000, divided as follows: The Chairman shall receive SEK 690,000, and the other Members who are not employed by the company shall each receive SEK 260,000.
- Authorization of the Board on one or more occasions before the next AGM, with or without deviation from the shareholders' prefer- ential rights, to approve the new issue of class B shares in a num- ber that shall not collectively exceed 20 percent of the total number of shares outstanding in the company after exercise of this autho- rization. Issuance of new shares under the authorization shall be carried out on market terms.
- Resolution on the issue of warrants under a new incentive program.
2023 Annual General Meeting
The AGM 2023 will be held on May 4, at Tändstickspalatset, Västra Trädgårdsgatan 15, Stockholm, Sweden.
Nomination Committee
Under the Nomination Committee procedure adopted at the 2022 AGM, the Chairman of the Board shall contact the three largest shareholders in terms of the number of votes at the end of the third quarter and offer them the opportunity to each appoint a representative to the Nomination Committee. If any of these shareholders waive their right to appoint a representative, the right shall pass to the shareholder with the next largest shareholding after these share- holders. According to the procedure, the Chairman of the Board shall also be a member of the Nomination Committee. The Committee members shall jointly elect a Chairman to lead the work of the Committee.
Medivir's shareholders exercise their right of decision at the Annual General Meeting and any Extraordinary General Meetings. See pages 18-19 for more information about Medivir's share and shareholders.
Annual General Meetings
Shareholders exercise their control over the company at the AGM or at EGMs. Minutes from and information on Medivir's General Meetings can be found on the website.
2022 Annual General Meeting
The Annual General Meeting was held on May 5, 2022. In all, 18 (13) shareholders attended, either in person or through proxies, representing 29.27 percent (28.16) of the votes. Uli Hacksell, Chairman of the Board, was elected to serve as Chairman of the AGM.
Matters resolved by the AGM:
- Re-electionof Board Members Uli Hacksell, Lennart Hansson, Bengt Westermark, and Yilmaz Mahshid and new election of
AGM | |
Shareholders | |
Nomination Committee | External auditors |
Karl Tobieson (Linc AB) | Öhrlings Pricewaterhouse Coopers AB |
Richard Torgerson (Nordea Investment Funds) | Tobias Stråhle |
Anders Hallberg (HealthInvest Partners) | |
Uli Hacksell (Chairman of the Board) |
Board of Directors
Uli Hacksell (Chairman of the Board), Lennart Hansson, Anette Lindqvist, Yilmaz Mahshid, Bengt Westermark
CEO and the rest of Group management
Jens Lindberg (CEO), Magnus Christensen, Malene Jensen, Tom Morris*, Fredrik Öberg
The model reflects the situation as of Dec. 31, 2022 * Tom Morris is hired on a consultancy basis.
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Nomination Committee duties
The duties have changed over the years in order to comply with the requirements of the Code. The primary duty of the Committee continues, however, to be to propose candidates for election to the Board of Directors. In order to ensure its ability to evaluate the expertise and experience required of Board Members, the Committee must keep itself informed of the Group's strategy and the challenges it will face. The Committee must also take into consideration all applicable rules governing the independence of the Board Members. The Committee shall also draw up proposals for resolution by the AGM regarding the remuneration and fees payable to: Board Members elected by the AGM but who are not employed by the company, the auditor and Members of the Nomination Committee.
To date, the Committee has not proposed payment of any remuneration to its members. The Nomination Committee proposes candidates for the position of auditor in consultation with the Board of Directors. The Nomination Committee is also tasked with proposing a candidate for election as Chairman of the AGM.
The work of the Nomination Committee ahead of the 2023 AGM The work begins with a review of a checklist detailing all of the duties of the Committee as prescribed by the Swedish Code of Corporate Governance and by the Nomination Committee's Rules of Procedure as adopted by the AGM. A timetable is also set for the work. A good understanding of Medivir's operations is vital in enabling the members of the Committee to carry out their duties. The Chairman of the Board is responsible for the annual appraisal of the work of the Board, including the efforts of the individual Members of the Board. In 2022 the Board Members responded to a digital questionnaire and the results were compiled. A report based on the results was then jointly discussed at the December Board Meeting, which provided the Board
Members of the Nomination Committee
and its Chairman with a good picture of how the Board can improve its work. The Nomination Committee was also informed of the results of these appraisals, including the appraisal of the Chairman of the Board. The Committee interviewed all Board Members as part of the task of evaluating the Board of Directors. The Committee is thus able to assess the expertise and experience required for Board Members. The Nomination Committee also studied the Group's appraisals of the quality and efficiency of the Auditor's work, including recommendations for auditors and audit fees. The Nomination Committee had held four meetings by March 3, 2023. The Commit- tee's full proposals for the 2023 AGM were published in conjunction with publication of the notice convening the AGM.
The composition of the 2022-2023 Nomination Committee was as follows:
- Karl Tobieson, Chairman of the Nomination Committee, and representing Linc AB
- Richard Torgerson, representing Nordea Investment Funds
- Anders Hallberg, representing HealthInvest Partners
- Uli Hacksell, Chairman of the Board Medivir AB
Medivir's Nomination Committee has announced that it will propose to the 2023 Annual General Meeting the re-election of board members Uli Hacksell, Lennart Hansson, Yilmaz Mahshid, Bengt Westermark and Anette Lindqvist. As Chairman of the Board, the Nomination Committee will propose re-election of Uli Hacksell.
Duties and work of the Board of Directors
The primary duty of the Board is to manage the Group's operations on behalf of the owners in such a way that the interests of the owners, in terms of a long-term healthy return on capital invested,
are optimally protected. The Board manages and decides on Group-wide issues such as:
- Strategic orientation and significant objectives.
- Significant issues in relation to the optimization of capital struc- ture, investments, acquisitions, and divestments.
- Monitoring and control of operations, financial position, informa- tion provision and organizational issues, including appraisals of the Group's executive management.
- Appointment and, when required, dismissal of the CEO.
- Overall responsibility for setting up efficient systems for internal control and risk management.
- Significant policies.
Composition of the Board of Directors
The Members of the Board shall serve from the end of the AGM at which they were elected until the end of the next AGM.
There is no limit on the number of consecutive periods during which a person may be a Board Member. The Board of Directors elected by the shareholders at the 2022 AGM until the end of the 2023 AGM comprised five Members of the Board and no Deputy Members, including the Chairman of the Board. Women make up 20 percent of the Board. The CEO and CFO also attend Board Meetings. However, they are not present for matters that may involve a conflict of interest, or where it is otherwise inappropriate for them to attend, such as in conjunction with the evaluation of the CEO's work. See page 31 for a presentation of the Members of the Board.
Rules of Procedure and Board Meetings
The Board of Directors adopts written Rules of Procedure every year, clarifying the duties of the Board and regulating the division of labor of the Board, including the role of the Chairman, the decision-making process within the Board, the Board's schedule of meetings, notices convening Board Meetings, agendas and minutes.
The Rules of Procedure also regulate how the Board shall receive
The Nomination Committee, ahead of the 2023 AGM (appointed by the biggest shareholders in terms of the number of votes held on Sept. 30, 2022)
Proportion of votes, % | ||
Name | Representing | Sept. 30, 2022 |
Karl Tobieson | Linc AB | 12.3 |
Richard Torgerson | Nordea Investment Funds | 9.0 |
Anders Hallberg | HealthInvest Partners | 6.3 |
Uli Hacksell | Medivir's Chairman of the Board (convenor) | 0.6 |
Total | 28.2 |
information and documentation in order to ensure its ability to take well-founded decisions. The Board adopts written instructions for the CEO each year, clarifying the CEO's responsibility for the ongoing administration, methods of reporting to the Board, the requirement for internal control instruments, and other matters requiring a decision by the Board or which must be reported to the Board. The Rules of Procedure require an inaugural Board Meeting to be held immediately after the AGM. The Board normally also holds a minimum of six additional Meetings each year. Four of these Meetings are held in
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INTRODUCTION | OPERATIONS | DIRECTORS' REPORT | CORPORATE GOVERNANCE REPORT | FINANCIAL REPORTS | NOTES | OTHER INFORMATION |
conjunction with the publication of the Group's annual and interim reports. Each meeting addresses the company's project portfolio and business development. In addition, at least one meeting addresses specific long-term strategy issues. The budget and economic outlook are addressed at the final Meeting of each calendar year. Additional meetings, incl. telephone conferences, are held as required.
Responsibilities of the Chairman of the Board
The Chairman is responsible for ensuring that the work of the Board is well-organized, conducted efficiently, and that the Board fulfills its obligations. The Chairman monitors company operations in dialogue with the CEO and is responsible for ensuring that other Board Members receive the information and documentation required to enable a high standard of discussion and decision-making, and for monitoring the implementation of the Board's decisions. The Chairman is responsible for conducting an annual appraisal of the Board's work and for ensuring that the Nomination Committee is provided with the results of the appraisals. The Board has evaluated its work during the year by means of an online questionnaire comprising ca.
50 questions in seven areas. The Board has completed the same questionnaire for eight years, for which reason a good description of the trend was obtained. This year's evaluation of the board of directors shows an even and strong result over all seven question areas. Among the strongest areas are the board's competence, composition and working climate. The results of the evaluation were presented to the Nomination Committee. The Chairman represents Medivir on ownership issues.
The work of the Board of Directors in 2022
The Board has held 17 minuted Meetings in 2022 at which the Members had the opportunity to participate virtually. The attendance of the individual Members at these Meetings is shown in the table on page 28. All meetings followed an approved agenda which, together with the documentation for every item, was provided to the Members before the relevant meeting. An ordinary Board Meeting usually lasts for just over half a day in order to ensure sufficient time for presentations and discussions.
The CEO and CFO participate in the majority of Board Meetings. Reviews of the current business position, developments relating to ongoing projects, the Group's results and financial position, liquidity and the outlook for the rest of the year are conducted at every ordinary Board Meeting.
A member of Group management usually reviews a relevant strategic issue. The work of the Board during the year largely focused on:
- Development of the project portfolio.
- Financial development and capital acquisition.
- Interim Reports, the Year-end Report, and the Annual Report.
- Collaborations and partnerships.
- Overview of corporate management.
- Reviews of proposals regarding salaries, variable and fixed remuneration.
- Review of the results of, and proposals for, long-term incentive plans.
- Reviews of the company's risk management, governance, and internal controls.
- Reviews of reports from the company's Auditor elected by the AGM, including the Auditor's audit plan.
The Board's Rules of Procedure
Board Meeting | AGM |
Board Meeting | |
• Approval of the annual accounts | • Inaugural Board |
• Notice convening the AGM | Meeting |
Board Meeting
- Strategy discussion, kick-off
- Review and analysis of the project portfolio
Board Meeting
- Q3 report, press release
- Review and analysis of the project portfolio
- Report from the auditor regarding Q3 report
Strategi och affärsplan | • Impairment testing |
• Workshop with management | • Preliminary budget |
• Risk review |
January | February | March | April | May | June | July | August | September | October | November | December |
Nomination Committee | Board Meeting | Board Meeting | Board Meeting | Board Meeting | Board Meeting | ||||||
• Proposals for the AGM | • Q1 report, press | • Review and analysis of | • Q2 report, press | • Follow-up of strategy discus- | • Business plan and budget | ||||||
Board Meeting | release | the project portfolio | release | sion from August Meeting | • Corporate and CEO objectives | ||||||
• Q4 report, press release | • Audit plan | Nomination Committee | for the coming year, including | ||||||||
• Meeting with auditor in the absence of | • Convening meeting ahead of | bonus structure | |||||||||
management | the AGM | • Risk follow-up | |||||||||
• Report from the Auditor, Q4 and year-end | • Report from the auditor regard- | ||||||||||
audit process | ing the year-end process | ||||||||||
• Bonus payments, previous year | Nomination Committee | • Review and analysis of the |
• Decision on the annual salary review for | • Board evaluation | project portfolio |
the CEO and senior executives | ||
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The Board of Directors' attendance and fees1
ATTENDANCE (TOTAL | TOTAL REMU- | |||||
NUMBER OF MEETINGS) | NERATION | |||||
Independent in | ||||||
Independent in | relation to | |||||
relation to the | major share- | |||||
Members elected by the AGM | Elected | Born | company | holders | Board Meetings | |
Uli Hacksell, chairman | 2018 | 1950 | No | Yes | 17/17 | 690,000 |
Bengt Westermark | 2017 | 1945 | Yes | Yes | 17/17 | 260,000 |
Lennart Hansson | 2018 | 1956 | Yes | Yes | 16/17 | 260,000 |
An van Es Johansson2 | 2019 | 1960 | Yes | Yes | 5/7 | |
Yilmaz Mahshid | 2021 | 1979 | No | Yes | 16/17 | 260,000 |
Anette Lindqvist3 | 2022 | 1961 | Yes | Yes | 10/10 | 260,000 |
- The attendance of the Board members refers to the year 2022. Total remuneration refers to fees paid to the Board of Directors during the period from May 2022 - April 2023. The fee payable to Members of the Board elected by the Annual General Meeting is determined by the Annual General Meeting in line with a proposal by the Nomination Committee. Fees excludes travel expenses. Differences arise between the maximum fee approved by the Annual General Meeting and the actual amount disbursed, as the actual amount disbursed during the calendar year is a combination of the fees paid between the two most recent General Meetings. See Note 4 on pages 44-45 for the actual amounts disbursed.
- Resigned at the 2022 AGM.
- Appointed at the 2022 AGM.
Group management
The Board appoints the CEO and, where necessary, the Deputy CEO. The CEO leads the work of Group management and is responsible, together with Group management, for ensuring that the operating activities are conducted in accordance with the provisions of the Swedish Companies Act, other legislation and regulations, applicable regulations for listed companies, the Articles of Association, and the CEO's Instructions. Group management has a broad composition of individuals with in-depth and extensive experience of R&D, registration and approval of pharmaceuticals, and the requisite expertise in commercial development, accounting, finance and com- munication. For a presentation of Group management, see page 32. The role of Group management is to:
- Set goals, allocate resources, and follow up on the performance of the company and the development of the projects.
- Produce information and documentation that enables the Board to take well-founded decisions.
- Implement the strategy adopted by the Board throughout the organization on the basis of the annual strategic work.
- Following up on established goals is a key tool in the management of our operational work.
Guidelines for remuneration to senior executives
Remuneration principles for senior executives at Medivir are determined by the AGM. The proposed guidelines for 2023 are essentially in line with the guidelines applied to date, but have been adapted as a result of certain changes in the Companies Act.
In this context, senior executives refers to the CEO and other members of Group management. The guidelines apply to employment contracts entered into after the adoption of the guidelines by the AGM or AGM-approved amendments to existing terms. Medivir shall offer a competitive total compensation package that promotes recruitment and retention of qualified senior executives. Remuneration payable to senior executives may comprise a fixed salary, performance-related pay, incentive plans approved by the AGM, pensions and other benefits. The fixed salary shall take into account the extent of the individual's responsibilities and their experience.
Performance-based pay, as a cash bonus, may comprise a maximum of 50% of the annual fixed salary. Performance-related pay shall be linked to predetermined and quantifiable criteria formulated in order to promote the company's long-term value creation.
A remuneration report covering the types of remuneration regulated by guidelines adopted by the AGM has been prepared separately and will be presented at the AGM in May 2023.
Evaluation of principles for remuneration to senior executives In 2022, Medivir has complied with the remuneration principles for senior executives approved by the AGM.
Long-term incentive plans
The purpose of long-term incentive plans is to generate the conditions for retaining and recruiting competent personnel and to offer employees an attractive opportunity to acquire a stake in the Group, so as to encourage continued company loyalty by combining the interests of the shareholders and the employees.
At the beginning of the period, there were 1,113,864 outstanding warrants in the ongoing incentive program. In January, 51,864 warrants expired in the 2018 program. No shares were subscribed for.
During 2022 Medivir employees bought 525,000 warrants. The total number of outstanding warrants at the end of the period amounted to 1,587,000.
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Remuneration to senior executives (SEK thousand)
Performance- | Severance | |||||||
Funktion | Year | Fixed salary | related pay | Benefits | pay | Total | Pension | Total |
CEO, Jens Lindberg1 | 2022 | 2,253 | 344 | 80 | - | 2,676 | 600 | 3,276 |
2021 | - | - | - | - | - | - | - | |
Former interim CEO Magnus Christensen2 | 2022 | 174 | - | - | - | 174 | 47 | 221 |
2021 | 1,429 | 239 | - | - | 1,668 | 372 | 2,040 | |
Former CEO Yilmaz Mahshid3 | 2022 | - | - | - | - | - | - | - |
2021 | 725 | - | 33 | - | 758 | 249 | 1,007 | |
Other senior executives4 | 2022 | 4,159 | 347 | - | - | 4,505 | 1,510 | 6,015 |
2021 | 3,661 | 1,077 | 55 | - | 4,793 | 1,675 | 6,468 | |
Total | 2022 | 6,585 | 691 | 80 | - | 7,355 | 2,157 | 9,512 |
2021 | 5,815 | 1,316 | 88 | - | 7,219 | 2,296 | 9,515 | |
- Jens Lindberg took up his position as CEO 24 January 2022.
- Magnus Christensen acted as interim CEO from 5 May 2021 up until 24 January 2022.
- Yilmaz Mahshid acted as CEO during the period 14 September 2020 - 5 May 2021.
- For 2021 and 2022, it includes a subsidy in accordance with the warrant programs approved at the Annual General Meetings in May 2021 and May 2022, respectively. In 2022, the CEO bought 250,000 and other senior executives bought a total of 250,000 warrants. In 2021, the incoming CEO bought 240,000 warrants and other senior executives bought a total of 260,000 warrants.
Audit and audit consulting costs (SEK thousand)
GROUP | |||
2022 | 2021 | ||
PwC | |||
Audit engagement | 536 | 384 | |
Auditing activities other than audit engagement | 55 | 135 | |
Tax advice | 46 | 45 | |
Valuation services | - | - | |
Other services | 78 | 116 | |
Total, PwC | 715 | 680 | |
Other auditors | |||
Audit engagement | - | - | |
Total | - | - | |
Total | 715 | 680 |
In May 2020, the Board of Directors and the AGM approved a new long-term incentive plan. In the second quarter of 2020, Medivir's employees purchased 227,000 warrants with a market value of SEK
-
each and a strike price of SEK 31.40 per share. Medivir's employees purchased a further 300,000 warrants in the third quarter of 2020. These warrants were issued at a market value of SEK 1.00 with a strike price of SEK 31.40 per share. The total of 527,000 war- rants can be exercised to subscribe for new class B shares during the period from December 1, 2023 through December 15, 2023. The
2020 valuation calculation was based on the following figures: term,
- years; strike price, SEK 31.40; VWAP, SEK 15.70; risk-free inter- est rate, 0.0 percent; volatility, 41 percent. After recalculation caused by the rights issue during the first quarter of 2021, each such war- rant entitles the holder to subscribe for 1.16 new B shares in the company at a subscription price of SEK 27.10.
In May 2021, the Board of Directors proposed and the AGM approved a new long-term incentive program. During the second quarter 2021, Medivir employees bought 230,000 warrants at a mar- ket value of 1.00 each with an exercise price of SEK 13.79 per share. In the fourth quarter 2021, Medivir employees bought an additional 305,000 warrants of which incoming CEO bought 240,000. These warrants were issued at a market value of SEK 1.71 each with an
exercise price of SEK 13.79 per share.The warrants may be exercised to subscribe for new class B shares during the period from 1 December 2024 up to and including 15 December 2024. The valuation calculation for 2021 was based on the following figures: term,
3.60 years; strike price, SEK 13.79; VWAP, SEK 7.88; risk-free interest rate, 0.4 percent; volatility, 41 percent.
In May 2022, the Board of Directors proposed and the AGM approved a new long-term incentive program with similar terms to the program in 2021. In the fourth quarter 2022, Medivir employees bought 525,000 warrants of which CEO bought 250,000 . These war- rants were issued at a market value of SEK 0.77 each with an exer- cise price of SEK 14.13 per share.The warrants may be exercised to subscribe for new class B shares during the period from 1 December 2025 up to and including 15 December 2025. The valuation calcula- tion for 2022 was based on the following figures: term, 3.12 years; strike price, SEK 14.13; VWAP, SEK 8.07; risk-free interest rate, 2.14 percent; volatility, 36 percent.
Election of auditors
The duties of the Nomination Committee include proposing an auditor to the AGM.
Öhrlings PricewaterhouseCoopers AB (PwC) was appointed as the company's external auditors for a one-year period up to and includ-
ing the 2023 AGM. Tobias Stråhle, Authorized Public Accountant, is the Auditor-in-Charge for Medivir.
- The auditors work according to an audit plan and report their observations on a rolling basis to the Board, both during the course of the audit and in conjunction with the preparation of the annual accounts.
- The auditors review one interim report and the annual financial statement in order to assess their accuracy, completeness and the correspondence of the accounts with generally accepted account- ing practice and relevant accounting principles.
- The Auditor-in-Charge attends the AGM at which he or she pres- ents details of the audit work and observations made.
Auditors' fees
Fees for auditing Medivir's accounts are determined by the AGM in line with proposals by the Nomination Committee. Auditors' fees in 2022 and 2021 are shown in the table above.
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Medivir AB published this content on 31 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 April 2023 07:49:07 UTC.
