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At Novozymes, our executives share and promote the long-term interests of our shareholders, and the remuneration of the Board of Directors and Executive Leadership Team supports this.

Novozymes’ remuneration policy is designed to encourage high performance and support value creation. It applies both to managers and to nonmanagerial employees. Remuneration consists of base salary, pension, bonus and incentive programs. These components are linked to the employee’s individual performance and to the achievement of Novozymes’ financial, social and environmental targets.

The remuneration policy aims to provide employees with a competitive package, which is ensured through reviews against external benchmarks.

Management remuneration
  2015 2014
DKK million Executive Leadership Team Board of Directors Total Executive Leadership Team Board of Directors Total
Salaries and other short-term benefits 40  47  39  45 
Defined contribution plans - 10  - 10 
Remuneration excl. expensed stock-based incentive programs 49  56  49  55 
Expensed stock-based incentive programs 34   - 34  28   - 28 
Remuneration 83  90  77  83 

Board of Directors
The remuneration of the Board of Directors comprises a fixed fee and is not incentive based. This ensures that the Board pursues the company’s long-term interests without taking into consideration what this may mean in terms of the value of incentive-based remuneration.

Board members receive a fixed base fee, while the Chairman and the Vice Chairman receive a fee that is three times and two times the base fee respectively. The chairman and other members of the Audit Committee receive additionally one base fee and half a base fee respectively. The Board of Directors assesses the fees paid to the Board annually, based on recommendations from the Chairmanship. In making its recommendations, the Chairmanship is guided by relevant benchmarks, including Novozymes’ peers in Denmark and the rest of Europe.

The Board of Directors’ remuneration for the year is approved at the Annual Shareholders’ Meeting each year.

Remuneration paid to individual members of the Board of Directors:

  2015 2014
DKK '000 Board of Directors Audit Committee Total Board of Directors Audit Committee Total
Henrik Gürtler 1,500  - 1,500  1,250  - 1,250 
Agnete Raaschou-Nielsen 1,000  250  1,250  763  208  971 
Mathias Uhlén 500  - 500  417  - 417 
Anders Hentze Knudsen 500  - 500  417  - 417 
Lars Bo Køppler 500  - 500  417  - 417 
Lena Bech Holskov 500  - 500  417  - 417 
Lena Olving 500  250  750  417  208  625 
Lars Green* 500  500  1,000  347  347  694 
Jørgen Buhl Rasmussen 500  - 500  417  - 417 
Heinz-Jürgen Bertram** 417  - 417  - - -
Kurt Anker Nielsen***  - -  - 138  70  208 
Remuneration 6,417  1,000  7,417  5,000  833  5,833 
* Joined on February 26, 2014.          
**Joined on February 25, 2015.          
*** Resigned on February 26, 2014.          
The Directors' remuneration does not include mandatory social security contributions paid by Novozymes.

The following members of the present Board of Directors hold shares of stock in Novozymes A/S:
Shares of stock Shares of stock at Jan. 1, 2015 Purchased during the year Sold during the year Shares of stock at Dec. 31, 2015 Market value DKK million
Agnete Raaschou-Nielsen 430   -  - 430  0.1 
Mathias Uhlén 650   -  - 650  0.2 
Anders Hentze Knudsen 356   -  - 356  0.1 
Lena Bech Holskov 270   -  - 270  0.1 
Lena Olving 1,000   -  - 1,000  0.4 
Jørgen Buhl Rasmussen 2,000   -  - 2,000  0.7 
Board of Directors 4,706   -  - 4,706  1.6 
Members of the Board of Directors are not granted stock options or stock awards. However, employee-elected members hold a limited number of stock options in Novozymes A/S due to Group-wide employee stock option programs.

Executive Leadership Team
The Board of Directors wishes to incentivize the Executive Leadership Team to ensure continued positive development of Novozymes and, as a result, good value creation for Novozymes’ shareholders. The Board finds that the best results are achieved when a relatively high proportion of an executive’s total remuneration is dependent on achievement of the executive’s individual targets and Novozymes’ financial, social and environmental targets.

The Executive Leadership Team’s remuneration comprises a base salary, pension, a cash bonus scheme, stock-based incentive programs and other benefits (car, telephone, etc.).
Compared with Novozymes’ peers, the variable part of the total remuneration (cash bonus and stock-based programs) is relatively large in relation to the base salary.

The Board of Directors has set the fixed base salary for members of the Executive Leadership Team at a level slightly below the average for a sample of comparable Danish companies. In 2015, the ratio between the CEO’s compensation and the median employee’s compensation was 48, which is below the average ratio of 55 for the 800+ companies assessed by RobecoSAM in 2015.

The Executive Leadership Team has a defined contribution pension scheme, with the pension contribution representing between 25% and 30% of base salary and cash bonus. The maximum annual cash bonus is equivalent to five months’ fixed base salary plus pension and is dependent on achievement of individual targets and the company’s operational targets for financial, social and environmental performance.

An incentive program covering the period 2014-2016 has been established for the Executive Leadership Team. The program is a combination of stock and stock options, with half of the incentive program allocated in stock and half in stock options.

The stock options will be granted annually, while the stock will be allocated in January 2017. Achievement of a cumulative economic profit of DKK 5.0 billion over the three-year period will result in 80% of the program being awarded, while cumulative economic profit of DKK 5.5 billion or more over the three-year period is required for the full program to be awarded. If the economic profit for the period is below DKK 2.5 billion, no stock or stock options will be granted. Between these three points, stock and stock options will be granted proportionally.

The general purpose of the program is to ensure that the members of the Executive Leadership Team are incentivized in such a way that there is a focus on long-term growth and earnings at Novozymes, in order to ensure that shareholders’ interests are met as best possible.

As a result of this program, 641,735 stock options were granted to the Executive Leadership Team in 2014, and 463,749 in 2015. Stock options will also be awarded in 2016. Furthermore, 282,152 shares may be released in January 2017, and dividends from these shares during the three-year period will be used to buy additional shares. Combined, these shares will give the maximum number of shares that can be released in January 2017.

As the incentive program is based on achievement of cumulative targets for economic profit in the three-year period, the final number of stock options and shares granted will not be known until the end of the program in January 2017. The fair value of the program on the grant date was DKK 134 million, which will be expensed over a six-year period assuming that the target is met and the maximum-value clause does not come into effect.

These assumptions were unchanged at year-end, and DKK 34 million was expensed in 2015.


Remuneration paid to individual members of the present Executive Leadership Team:

  Peder Holk Benny Per Andrew Thomas Thomas  
DKK million Nielsen D. Loft Falholt Fordyce Videbæk Nagy Total
Salary 7.9  4.6  4.7  4.4  5.1  4.6  31.3 
Cash bonus 2.1  1.4  1.1  0.8  1.5  1.2  8.1 
Contribution-based pension 2.6  1.4  1.3  1.3  1.5  1.3  9.4 
Expensed incentive programs 7.8  5.2  5.2  5.3  5.2  5.2  33.9 
Total remuneration 2015 20.4  12.6  12.3  11.8  13.3  12.3  82.7 
               
Salary 7.0  4.3  4.4  3.9  4.7  4.3  28.6 
Cash bonus 2.7  1.6  1.6  1.5  1.7  1.6  10.7 
Contribution-based pension 2.6  1.4  1.4  1.4  1.5  1.4  9.7 
Expensed incentive programs 6.4  4.2  4.2  4.4  4.2  4.2  27.6 
Total remuneration 2014 18.7  11.5  11.6  11.2  12.1  11.5  76.6 
The following members of the Executive Leadership Team hold shares of stock in Novozymes A/S:
Shares of stock Shares of stock at Jan. 1, 2015 Purchased during the year Sold during the year Shares of stock at Dec. 31, 2015 Market value DKK million
Peder Holk Nielsen 82,188   -  - 82,188  27.2 
Benny D. Loft 2,260   -  - 2,260  0.8 
Per Falholt  - 121,215  101,225  19,990  6.6 
Andrew Fordyce  -  -  -  -  -
Thomas Videbæk  -  -  -  -  -
Thomas Nagy 20,000  60,000  75,000  5,000  1.6 
Executive Leadership Team 104,448  181,215  176,225  109,438  36.2 
The following members of the Executive Leadership Team hold stock options and stock awards in Novozymes A/S:
Stock options Options at Jan. 1, 2015 Additions during the year Exercised during the year Options at Dec. 31, 2015 Market value DKK million
Peder Holk Nielsen 269,262  107,019   - 376,281  49.8 
Benny D. Loft 159,913  71,346  61,215  170,044  14.3 
Per Falholt 219,913  71,346  121,215  170,044  14.3 
Andrew Fordyce 104,189  71,346   - 175,535  14.9 
Thomas Videbæk 98,698  71,346   - 170,044  14.3 
Thomas Nagy 158,698  71,346  60,000  170,044  14.3 
Executive Leadership Team 1,010,673  463,749  242,430  1,231,992  121.9 
           
Stock awards  Awards at Jan. 1, 2015 Additions during the year Released during the year Awards at Dec. 31, 2015 Market value DKK million
Andrew Fordyce 4,602   - 2,191  2,411  0.8 
Executive Leadership Team 4,602   - 2,191  2,411  0.8 
Members of the Executive Leadership Team have contracts of employment containing standard conditions for executive officers of Danish listed companies, including the periods of notice that both parties are required to give and noncompetition clauses. If an executive officer’s contract of employment is terminated by the company without there having been misconduct on the part of the executive officer, the executive officer has the right to compensation, which, depending on the circumstances, may amount to a maximum of three years’ base salary and pension contributions.

Senior leadership
The remuneration of Novozymes’ senior leadership (207 vice presidents and directors) follows the general remuneration policy. A three-year incentive program has been established for senior leadership below executive level and largely follows the same mechanisms as the program for the Executive Leadership Team described above.

Further information on the incentive program for this employee group can be found in Note 6.2 to the consolidated financial statements, which also includes an overview of outstanding stock options.