Pay and benefits
We believe that by stimulating employee motivation, as well as loyalty to our values and our Company, we will deliver better results. In terms of compensation and other employee benefits, this means the following:
- Strengthen and safeguard FREYR’s attractiveness in the labor market.
- Support FREYR’s strategy, values, and integrity by promoting the desired corporate culture and behavior among leaders and employees.
- Promote solid individual and collective performance.
- Give FREYR room to maneuver and differentiate rewards according to market development, competence, experience, function, achievements, achieved results, behavior, and potential.
- Secure equal pay.
We view salary and other forms of reward and compensation as one of the tools to attract, motivate, develop, and retain the critical competence the Company needs to realize its ambitions.Below are general and executive-level criteria for remuneration and rewards (irrespective of locale/geography).
General principles for the remuneration of employees
- As a starting point, we are a fair employer that applies equal treatment to remuneration and rewards without regard to diversity categories (such as gender, age, cultural background, and ethnicity).
- Salary assessments are based on a combination of group-level and individual assessments. Assessment at group level is based on market pay for the category, strategy, and critical competence of the role. Individual factors are emphasized more heavily than the assessment of the category.
- Salary at any one level is to be held within a certain range, with the intention of avoiding outliers.
- Individual rewards must take into account performance, results, behavior, and potential.
Key compensation components
- Base salary is targeted at the market median.
- Pension provided in line with local market practices.
- Benefits, such as insurance, are in line with local market practice, with executives participating on the same basis as all other employees.
- Short-term variable remuneration is provided to employees at all levels of the organization.
- Long-term variable remuneration, consisting primarily of stock options, is granted to all employees shortly after joining the Company and when promoted, and to employees in key positions on an annual basis.
General principles for the remuneration of senior executives
- The remuneration of the CEO and COO is determined by the Board of Directors, whereas remuneration of other senior executives is determined administratively based on frameworks specified by Board of Directors.
- The remuneration level shall reflect the complexity and responsibilities of each role and shall take into account the group’s breadth of international operations.
- Remuneration of the senior executives shall be at a competitive level in the relevant labor market(s).
- Remuneration should be a tool for the Board of Directors to attract and retain the required leadership and be motivational for the individual executive, while also being flexible and understandable.
- Market comparisons are conducted on a regular basis to ensure remuneration levels are competitive.
Components of remuneration of senior executives
- Fixed salary:
The main element of the remuneration package is the annual base salary. This is normally evaluated once a year according to individual performance, market competitiveness, and (local) labor market trends.
- Benefits in kind: The senior executives receive benefits in kind that are common in comparable positions. These include telecommunication and insurance benefits.
- Short-term variable remuneration:
As a key component of the total remuneration package, the annual, variable pay scheme emphasizes the link between performance and pay, and it aims to be motivational. It aligns the senior executives with relevant, clear targets derived from the overall strategic goals. The variable pay scheme takes into consideration both key financial targets and individual targets (derived from the annual operating plan). For the CEO, maximum annual payments can be 75% of base salary. For the other senior executives, this varies by position up to 50% of base salary. The Board of Directors reserves the right to make additional awards for exceptional performance.
- Long-term variable remuneration: With the approval of FREYR’s shareholders, we have instituted a long-term incentive program (“LTIP”) through which we offer share-based compensation awards. As awards under our LTIP generally consist of stock options, value is derived from an increase in the FREYR stock price. Generally, two types of awards are issued under the LTIP, as follows:
- Sign-on options are granted for all new employees, with the number of options based on the stock price at the grant date. The same method is used to grant options to employees being promoted to a new position within the Company.
- Annual options are granted for key executives and employees in what are considered business critical positions. The purpose of annual grants is:
- To attract and retain the best available personnel to ensure our success and accomplish our goals
- To incentivize employees with long-term share-based compensation to align their interests with FREYR’s shareholders; and to promote the success of our business.