Annual Report 2022

Annual Report 2022

Remuneration Components of our Senior Management Team Compensation

Pursuant to our shareholder-approved remuneration policy, the remuneration of our executive director(s) consists of the following components:

  • fixed-base compensation;
  • short-term variable compensation, based on the achievement of pre-determined targets;
  • severance arrangements;
  • long-term variable compensation, in the form of stock options and RSUs; and
  • pension and fringe benefits.

We note that while our remuneration policy by law applies only to members of our Board of Directors, we apply its principles to all our employees. In the rest of this chapter, we have limited our reporting to members of our Board of Directors and our senior management team unless explicitly mentioned otherwise.

Fixed-base compensation

We grant our senior management team members a fixed base (cash) compensation determined on the basis of our benchmarking exercise explained in section Changes to our remuneration practices in response to shareholder dissent. The final determination of a senior management member’s fixed-base pay is made considering the benchmark, the individual’s skills, experience and performance, the remuneration practices and conditions across the wider organization and our interactions with key stakeholders to secure broad public support for our remuneration practices and the feedback from the individual on their own remuneration levels. The target fixed cash compensation levels are set in accordance with our remuneration policy (as detailed in section Reference Group and Setting Reward Levels) but we note that the actual base cash remuneration for our executive director is below the targeted percentiles, taking into account the feedback from our executive director on proposals of the remuneration and nomination committee to increase the base pay to align more closely with the targeted percentile of the benchmark.

Short-term variable compensation based on the achievement of pre-determined targets

The objective of our short-term annual incentive compensation is to ensure that our senior management team is incentivized to achieve pre-defined performance targets in the shorter term. Variable cash incentives are granted for achieving predetermined specific performance targets. Our senior management team is eligible for an annual short-term variable incentive of their annual base compensation. The short-term target percentage is equal to up to 60% of the fixed-base compensation for our CEO, between 40-50% for our C-level employees (benchmarked per role) and up to 35% for vice president level members of our senior management team. The short-term incentive opportunity is capped at 200% of the target percentages, in line with the principles applied for the broader employee base at the Company. We have not established pay-out caps per individual target, but apply the pay-out cap of 200% of the total variable pay opportunity (i.e. in case of our CEO, the maximum variable pay cap of 200% represents 120% of base cash remuneration).

Long-term variable compensation, in the form of stock options and RSUs

Stock options and RSUs may be awarded every year, in accordance with our Equity Incentive Plan, whereby the stock options vest over a three-year period and the RSUs vest over a four-year period. Stock options may not be exercised by our Belgian tax resident employees (including our CEO) until the fourth calendar year following the year of the grant. RSUs vest 25% of the total grant at each anniversary of the grant date. Shares obtained through the vesting of RSUs and through the exercise of stock options, are subject to our equity holding requirements further explained in section Changes to our remuneration practices in response to shareholder dissent.

Severance arrangements

Our CEO has a severance arrangement in place of 18 months if he is discharged for reasons other than for cause.

Pension and fringe benefits

Pension and fringe benefits are awarded based on local market practices. For Belgium tax resident employees (including our CEO) this includes a defined contribution pension scheme operated by a third-party pension insurance organization, a company car (as from a certain paygrade level) and a hospitalization plan. We note that the pension arrangements offered to our Belgian based executives including our CEO mirror those offered to other Belgian based employees.

Performance of scenario analyses

In accordance with the DCGC, when determining the remuneration package of our executive director(s), scenario analyses are performed annually and taken into account in setting the level of the base remuneration to be paid as well as the variable remuneration and the corresponding targets.