The Remuneration Policy was adopted at the March 26, 2020 Annual General Meeting and replaced the Remuneration Principles. Additionally, the Compensation Report (previously called Remuneration Report) is available and describes the details of the compensation of the Board of Directors of Genmab A/S and our Executive Management officers in respect of the financial year 2019. The decisions made by the Board of Directors were made in accordance with the then effective Remuneration Principles. The 2019 Compensation Report has been prepared in compliance with the Danish Corporate Governance Recommendations on remuneration reports. The Compensation Report also includes disclosures that are not required by law but that Genmab thinks are helpful for shareholders to understand Genmab A/S’ approach to executive compensation and Board of Directors’ compensation.
Since inception, Genmab A/S has established general warrant schemes all of which have the primary objective of giving those who help build the company an opportunity to share in the value of the business that they are helping to create. The warrant schemes are meant to provide an incentive for all company employees, including those in our subsidiaries, and members of the Executive Management. Prior to the Annual General Meeting in March 2017, the warrant authorizations also allowed for warrant grants to members of the Board of Directors, as well as to certain external consultants with a long-term relationship with us.
Grants of warrants to members of Executive Management are subject to the Remuneration Policy for the Board of Directors and Executive Management. Under this policy members of the Board of Directors may only be granted RSUs whereas members of the Executive Management may be granted RSUs or a combination of RSUs and warrants. The Remuneration Policy was adopted by the Annual General Meeting in March 2020 and is available above.
Warrants are granted by our Board of Directors in accordance with authorizations given to it by our shareholders. Warrant grants are determined on a merit basis and upon recommendations of the Compensation Committee. All outstanding warrants have either been issued under the warrant scheme adopted by the Board of Directors in August 2004 (the “2004 Scheme”), the warrant scheme adopted by the Board of Directors in April 2012 (the “2012 Scheme”) or under the most recent warrant scheme adopted by the Board of Directors in March 2017 (the "2017 Scheme").
Under the terms of all three warrant schemes, warrants are granted at an exercise price equal to the share price on the grant date. According to our Articles of Association the exercise price cannot be fixed at a lower price than the market price at the day of grant.
Whereas warrants granted under the 2004 Scheme and the 2012 Scheme can be exercised from one year after the grant date, warrants granted under the 2017 Scheme can be exercised from three years after the grant date. In addition, warrants granted under the 2004 Scheme lapse on the tenth anniversary of the grant date, whereas warrants granted under the 2012 Scheme and the 2017 Scheme lapse on the seventh anniversary of the grant date. All other terms of the three warrant schemes are substantially identical.
Under the 2004 Scheme and the 2012 Scheme, the warrant holder may as a general rule only exercise 25% of the warrants granted per full year of employment or affiliation with us or our subsidiary after the grant date. However, as warrants granted under the 2017 Scheme are subject to three years cliff vesting, the warrant holder may as a general rule exercise all the warrants granted under the 2017 Scheme after three full years of employment after the grant date. Notwithstanding the above, the warrant holder will be entitled to keep and exercise all warrants granted regardless of termination of the employment relationship etc. in instances where we or our subsidiary terminate his/her employment relationship without the warrant holder having given us/subsidiary good reason to do so.
In aggregate, the number of warrants issued under the 2004 Scheme, the 2012 Scheme and the 2017 Scheme amounts to 9,780,703 of which 1,270,920 were still outstanding at March 31, 2020. For a more detailed description of warrants issued under the three schemes please refer to our latest Annual Report.
Until a new scheme may be adopted in the future, all warrants granted after the Annual General Meeting in March 2017 will be granted under the 2017 Scheme.
(last updated June 12, 2020)
In 2014, Genmab A/S established a Restricted Stock Units Program (the “RSU Program”) as part of incentive-based compensation for the Board of Directors and Executive Management. The RSU program was amended in December 2016 to allow for grants of Restricted Stock Units (“RSUs”) to employees of Genmab A/S and its directly and indirectly owned subsidiaries. The RSU program is meant to provide an incentive for program participants to establish and achieve sustainable long term goals for the company which are in line with the creation of value for Genmab shareholders.
Grants of RSUs to members of the Board of Directors and Executive Management are subject to the Remuneration Policy for the Board of Directors and Executive Management. Under this policy members of the Board of Directors may only be granted RSUs whereas members of the Executive Management may be granted RSUs or a combination of RSUs and warrants. The Remuneration Policy was adopted by the Annual General Meeting in March 2020 and is available above.
RSUs are granted by the Board of Directors on the basis of authorizations to repurchase shares given to it by the shareholders. The Board of Directors currently holds an authorization to repurchase up to 500,000 Genmab shares. This authorization was adopted by the Annual General Meeting in March 2016 and shall remain in force for a period ending March 17, 2021.
Under the terms of the RSU Program, each RSU shall provide a participant with a right and obligation to receive one share in Genmab A/S. RSUs vest on the first banking day of the month following a period of three years after the date of grant subject to vesting conditions set out in the RSU Program. The value of each share at the time of vesting is equal to the closing price at Nasdaq Copenhagen.
The first grant of RSUs under the RSU Program was made in December 2014. The total number of RSUs granted under the RSU Program amounts to 413,647. March 31, 2020 a total of 288,855 RSUs were outstanding.
(last updated June 12, 2020)