Remuneration of the board of directors
Non-executive directors at Gimv are entitled to a fixed, annual remuneration and attendance fees:
- there is a fixed annual remuneration for the respective board members as well as for the chairperson of (each of) the committees;
- there is also an attendance fee for board meetings as well as committee meeting.
This remuneration structure aims for an active participation in both board and committee meetings. The fixed remuneration for the committee chairpersons is justified by the fact that the proper operation of these committees requires adequate preparation by their chairpersons.
The objective, independent judgment of the non-executive directors is further encouraged by the fact that they do not draw any other remuneration from the company than their fixed directors' remuneration and their attendance fees.
Principles established by the general meeting and the board of directors
On 30 June 2011 the ordinary general meeting of Gimv set the total fixed remuneration of all board members, including the chairman and the CEO, at 1 450 000 EUR per year. Directors were authorised to further distribute this remuneration. The following distribution was agreed within the board of directors:
- the fixed remuneration of non-executive directors amounts to 21 000 EUR a year;
- committee chairpersons receive a fixed annual remuneration of 5 250 EUR;
- the remuneration of the chairman of the board of directors is set at 233 400 EUR (premiums of the group insurance excluded).
In addition directors (other than the chairman of the board) receive an attendance fee of 620 EUR per board or board committee meeting.
Apart from the fixed remuneration and attendance fees, non-executive directors do not receive any other remuneration, nor do they participate in the group insurance for Gimv employees, with the exception of the chairman (who is a beneficiary of the group insurance and enjoys an individual pension promise, (cfr infra)) and the CEO (who is a beneficiary of the group insurance and the co-investment structure, and also receives variable remuneration and certain fringe benefits (cfr infra)). In this way the CEO is the only director who takes part in any incentive plan for Gimv personnel.
The same principles for the remuneration of non-executive directors have been in place for several years. The company plans to raise the attendance fee to 670 EUR per meeting.
Remuneration of the board of directors paid out during financial year 2010-2011
The total remuneration actually paid and charged to the financial year 2010-2011 amounted to 1 132 798 EUR, including the remunerations of the chairman and the CEO. This amount is distributed as follows:
1. The amounts mentioned relate to what was paid during the year. These amounts do not necessarily reflect the fixed fees and attendance fee that were earned during the year.
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|year of birth||director since||appointed until GM of||fixed remuneration||attendance fee||total|
|Herman Daems (chairman)||1946||1999||2011||*2||*2||12\13||*2||11\13||*2||*2|
|Leo Victor (vice-chairman)||1946||1980||2011||21 000 €||4 562 €||12\14||7 440 €||5\5||3 100 €||36 102|
|Dirk Boogmans||1955||2010||2014||10 500 €||-||9\9||5 580 €||NVT||620 €||16 700|
|Greet De Leenheer||1947||2004||2011||21 500 €||NVT||13\13||7 440 €||2\2||1 240 €||30 180|
|Christ'l Joris||1954||2010||2014||10 500 €||NVT||6\9||4 340 €||3\3||1 860 €||16 700|
|Jan Kerremans||1946||2005||2011||21 500 €||NVT||12\13||7 440 €||NVT||NVT||28 940|
|Sophie Manigart||1962||2010||2014||10 500 €||NVT||8\9||4 340 €||2\2||620||15 460|
|Martine Reynaers||1956||1999||2011||21 500 €||NVT||9\13||5 580 €||2\2||1 240 €||28 320|
|Eric Spiessens||1960||1999||2013||21 000 €||1 812 €||13\13||7 440 €||5\5||3 100 €||33 352|
|Emile van der Burg||1949||2005||2013||21 000 €||3 125 €||12\13||6 200 €||3\3||6 200 €||36 525|
|Bart Van Hooland||1964||2010||2014||10 500 €||-||9\9||5 580 €||3\3||1 860 €||17 940|
|Zeger Collier *1||1969||2004||2010||11 000 €||NVT||3\3||1 860 €||NVT||NVT||12 860|
|Eddy Geysen *1||1947||2005||2010||11 000 €||NVT||0\3||-||0\2||-||NVT|
|Frank Meysman *1||1952||1998||2010||11 000 €||2 750 €||2\3||1 240 €||3\4||2 480 €||17 470|
|Marc Stordiau *1||1946||1993||2010||11 000 €||NVT||2\3||1 240 €||2\2||1 240 €||13 480|
*1 director until ordinary shareholders' meeting of 30 June 2010
*2 cfr remuneration chairman
*3 cfr remuneration CEO
In addition to his annual director's remuneration of 233 400 EUR, Gimv paid 81 600 EUR of premiums during the financial year 2010-2011 to the chairman's group insurance. In addition the chairman is entitled to an amount of 702 264 EUR under an individual pension promise. This amount, in which an interest at a market rate from 1 August 2006 onwards is included, has been provisioned in full for several years now and will be paid out at the end of the chairman's term of office.
In the financial year 2010-2011, Gimv paid 515 237 EUR of remuneration and group insurance premiums in respect of the CEO. This includes:
- a fixed remuneration of 371 203 EUR and a group insurance premium of 42 663 EUR;
- a variable component of 99 899 EUR; this amount was agreed upon in October 2008, when the CEO joined the company
- a bodily injury insurance premium of EUR 1 472.
In addition, the CEO was granted a variable component of 125 000 EUR related to the previous financial year, which will be paid out during the current financial year.
The financial value of the fringe benefits in the CEO's remuneration package amounts to 3 511 EUR.
The CEO participates in the co-investment structure, equal to a carried interest (cfr infra). In his capacity as member of the boards of directors of the co-investment companies the CEO owns around 4 percent of the total number of options on shares of the co-investment companies set up in 2007 and 8 percent of the total number of options on shares of the co-investment companies set up in 2010. The value of the carried interest is fully dependent on the evolution of the underlying shareholdings.
Koen Dejonckheere does not participate in the exitbonus.
On the occasion of his appointment a severance arrangement has been agreed with the CEO equal to two times his fixed annual remuneration if his appointment is terminated prior to the age of 60 for any reason other than voluntary departure. If his appointment is terminated after the age of 60, there will be no severance pay.
Remuneration of the members of the management committee
The remuneration policy of the company aimes to attract reputed profiles with the necessary experience to ensure continuing sustainable and profitable growth of the company. The policy should support the retention of this kind of profiles and keep them motivated.
In principle every year, the CEO presents the remuneration committee with proposals regarding the remuneration of each individual member of the management committee. The remuneration committee provides its advice and the board of directors takes the ultimate decision.
The total remuneration package for the members of the management committee is composed of three elements:
- a fixed monthly salary;
- a variable component, existing in turn of a discretionary bonus and an exitbonus;
- carried interest.
Each of these components is explained in more detail below. The principles for the fixed and variable remuneration, exitbonus and co-investment structure are already several years in place and the company does not expect any major changes in the near future. Save for the discretionary bonus, all incentive systems are long term based (more than eight years); payments are only based upon results achieved and happen more than eight years after they were granted. When payouts are made, it is thus certain that the compensation is justified, and claw back arrangements are not applicable.
An important part of the remuneration package depends heavily on the realised profits and exits of the portfolio companies and, as a result, can fluctuate in time. In addition, there are also significant differences in the allocation between the individual members of the management committee, especially where carried interest is concerned.
If, nevertheless, one has to formulate a rule of thumb for the whole remuneration package, it could be said that the fixed remuneration counts for about 60 percent of the total remuneration.
Fixed and variable remuneration
In the financial year 2010-2011, Gimv paid 1 632 700 EUR in gross salaries and group insurance premiums with respect to the members of the management committee, excluding the CEO. This amount includes:
- a joint fixed remuneration of 903 474 EUR and annual fixed group insurance premiums of 174 309 EUR;
- a total variable component (including exitbonus plan) of 554 916 EUR which was paid out during the financial year 2010-2011.
The total financial value of fringe benefits for members of the management committee (not including the CEO) amounts to 10 030 EUR.
No special agreements have been made in relation to the recruitment or dismissal of members of the management committee, who are covered by the usual labour legislation provisions.
The discretionary bonus is set up as a short term incentive and a guiding tool. The specific individual and team objectives to be reached are not directly related to the financial profitability of the portfolio; for this, other incentives have been put in place. The discretionary bonus is clearly complemetary to the other incentive measures which goals are long term and based upon financial profitablity.
The bonus objectives are decided upon by manager and employee together and written down in the appraisal report.
In theory the total budget for the discretionay bonuses can amount for up to 30 percent of the total fixed remuneration package. After hearing the advice of the remuneration committee, the board of directors sets the percentage every year. The past financial year, it was set on 30 percent.
Through the exitbonus plan, certain staff members, including members of the management committee, share in the capital gains realised from 31 March 2009 to 31 March 2014 on investments made prior to 2001 (with the exception of Barco). The financial impact on Gimv of this exitbonus plan is totally dependent on the evolution of the value of the underlying shareholdings. Members of the management committee are together entitled to 26.54 percent of the total exitbonus plan. The CEO does not participate in the exitbonus plan.
In the context of the exitbonus plan, Gimv set up a total provision in respect of all beneficiaries of 1 934 835 EUR in the financial year ending on 31 March 2011. During the financial year 2010-2011 this provision evolved from 1 120 637 EUR at 31 March 2010 to 1 934 835 at 31 March 2011. The evolution reflects both some divestments and the evolving valuation of the underlying portfolio.
The conditions and modalities of this exitbonus plan are described in detail in agreements bewteen the company and each of the benificiaries.
In line with international market practices in the private equity and venture capital industry, Gimv has created a co-investment structure (“carried interest”) since 2001, whereby members of the management committee and staff members are more closely involved in the investment activities by allowing them to participate in the investment portfolio and thereby also in the long-term investment results. The conditions and modalities of co-investment structure are described in detail in agreements between the company and each of the benificiaries.
To this end Gimv has set up co-investment companies for the various business units. Members of the management committee and the involved staff members participate, via share options, in the share capital of these co-investment companies in their capacity as members of the boards or investment advisory committees of these companies.
Co-investment plan beneficiaries are all together entitled to 10 percent of the capital gains realised on exits of shareholdings in the respective investment portfolios after deduction of financing and management costs. This structure represents in this way a carried interest of 10 percent within the Gimv group. The board of directors has fixed this percentage at 12.5 percent for the investment period 2010-2012, bearing in mind (i) the usual percentages applicable in this kind of structures within the venture capital sector, (ii) involvement of the Gimv partners in attracting third party funds and (iii) the increased personal financial involvement of the members of the partners’ council of the company.
In their capacity as members of the boards and/or investment advisory committees of these co-investment companies, members of the management committee (excluding the CEO) together own approximately 14 percent of the total number of options on the shares of the co-investment companies set up in 2004 and 2007, and about 20 percent of the co-investment companies set up in 2010. The other options on the shares are being held by the staff members.
The value of the carried interest depends entirely on the evolution of the value of these companies' shareholdings and this value evolution is mainly a derivation of the value of the participations of these companies.
On 31 March 2011 the total provision set aside by Gimv in previous years for the as yet unexercised options amounted to 7 123 470 EUR. This provision is calculated on the assumption that the employees concerned remain with the company until the end of the vesting scheme and is based on the valuation of the financial assets in question at the end of the financial year. During financial year 2010-2011 this provision evolved from 4 108 735 EUR at 31 March 2010 to 7 123 470 EUR at 31 March 2011.
This change in provision is mainly the result of the evolution of the evaluation of the portfolio companies, the increased number of outstanding share options on the 2010 co-investment companies and the partial exercise of share options on the 2007 co-investment companies 2007. For the latter the related provision has been transferred to the non-controlling interests. Together with the evolving valuations of the shareholdings, this explains the evolution of the non-controlling interests of the last financial year.
Remuneration for staff members of Gimv group
Just as for the management committee, Gimv wants to attract, through its remuneration policy, reputed profiles with the necessary experience to ensure a sustainable and profitable growth of the company. Such policy needs to bind and keep motivating this kind of profiles.
Every year, the CEO presents the remuneration committee with a proposal for a bonus budget, including the possible individual share for the members of the partners’ council. The remuneration committee provides its advice and the board of directors takes the final decision.
The total remuneration package for the staff is comprised of the same three elements as this of the management committee:
- a fixed monthly salary;
- a variable component, existing in turn of a discretionary bonus and an exitbonus;
- carried interest.
The principles for the fixed and variable remuneration, exitbonus and co-investment structure are already several years in place and the company does not expect any major changes in the near future.
An important part of the remuneration package depends heavily on the realised profits and exits of the portfolio companies and, as a result, can fluctuate in time. In addition, there are also significant differences in the allocation between the individual staff members, especially where carried interest is concerned.
If, nevertheless, one has to set forth a rule of thumb for the whole remuneration package, it could be said that the fixed remuneration counts for about 60 percent of the total remuneration.
On behalf of the board of directors, 17 May 2011
Herman Daems, chairman, and Leo Victor, director