Members of the Board of Directors receive at least half of their fixed fees in shares, with the option to elect to be paid up to 100% of their fixed fee in shares. For Board members electing to receive more than 50% of their fixed fee in shares, the shares exceeding the 50% portion are granted at a discount of 20% to market price. The proportion between shares (in excess of 50%) and cash is selected by each Board member upon election at the annual general meeting and is fixed until the next annual general meeting. The Board of Directors is compensated on a pro-rata basis for the period of service, even in the case of early termination or removal.
In 2024, the fair value at grant date amounted to kEUR 785 (2023: kEUR 886), reflecting a measurement based on a total number of shares of 25,796 (2023: 43,690) and a price of EUR 30 per share as at 10 April 2024 (2023: a price of EUR 20 per share as at 12 April 2023).
All shares will be fully vested at the annual general meeting in April 2025. In 2024, a total amount of kEUR 802 (2023: kEUR 892) was recognized as “General and administrative expenses” in the income statement according to the principles of graded vesting in IFRS 2.
The Board of Directors has adopted a Long-Term Incentive Plan (“LTIP”) for Executive Committee members and selected key employees of the Group. Under this share-based incentive program, eligible participants are awarded the contingent right to receive a certain number of shares in the future (“PSU(s)”) in the Company, subject to, inter alia, continued employment and achievement of market as well as non-market performance targets. The actual number of PSUs that will eventually vest and be settled in shares depends on revenue, EBITDA, and Total Shareholder Return (“TSR”) performance of the Group over a three-year performance period.
Two grants were made during 2024:
The participants are compensated for missed dividend payments during the vesting period if the PSUs vest. As a result, expected dividends during the vesting period have not impacted the fair value measurements of the grant.
An expense of kEUR 512 has been recognized in 2024 as “General and administrative expenses” in the income statement relating to the grants described above.
The CEO of the Group, Juan José González, is participating in the share-based incentive program described above. In addition to this, he was also granted PSUs on 6 September 2023 (“2023 CEO Grant”). The vesting of the PSUs for the 2023 CEO Grant depends on RONOA and EPS performance of the Group over a three-year performance period.
In accordance with IFRS 2, the maximum number of shares potentially vesting was used for the determination of the fair value of the grant. As a result, the fair value at grant date amounted to kEUR 1,135, reflecting a measurement based on 51,060 number of PSUs and the share price of PolyPeptide Group AG as of the grant date of EUR 23. The vesting period ends 10 trading days after the shareholders approve the 2025 audited consolidated financial statements.
The participant is compensated for missed dividend payments during the vesting period if the PSUs vest. As a result, expected dividends during the vesting period have not impacted the fair value measurement of the grant.
In 2024, no expense has been recognized in the income statement since it is expected that no PSUs from the CEO Grant will eventually vest. In 2023, an amount of kEUR 110 was recognized as “General and administrative expenses” in the income statement. This amount has been reversed in 2024.