The annual general meeting 2023 adopted a proposal from the nomination committee to set remuneration for the board of directors comprising EUR 93,500 to the chairman and EUR 41,500 to each of the other directors.
The meeting also decided remuneration for committee work as follows: audit committee chair EUR 13,000 and audit committee members EUR 6,500; remuneration committee chair EUR 6,500 and remuneration committee members EUR 3,250; tech committee chair EUR 6,500 and tech committee members EUR 3,250.
Current guidelines for remuneration to senior management
The board of directors proposes that the meeting adopts the following guidelines for compensation of senior executives, which includes the CEO and other members of senior management, and the directors of the board. These guidelines shall apply until the 2026 annual general meeting (provided that (a) new guidelines may be approved in the interim by the shareholders at a general meeting and (b) they may continue to apply after 2026 if the shareholders do not approve new guidelines that are proposed by the board before or at the 2026 annual general meeting).
These guidelines are forward-looking (that is, it is applicable to remuneration agreed, and amendments to remuneration already agreed, after adoption of these guidelines by the meeting) and will replace the remuneration guidelines which were approved at the 2021 annual general meeting in their entirety. Please refer to the last section of this agenda item for a description of the changes which these proposed guidelines purport to make to the 2021 guidelines.
Promotion of the company’s business strategy, long-term interests and sustainability
In short, the company’s business strategy is as follows.
Catena Media aims to be the number-one choice in global, innovative, performance based online marketing in any sector we enter. We will build outstanding relationships and always ensure partner brand growth by providing high-quality, partner-integrated products with superior user experiences. By focusing on strong brands in the online sports betting and casino gaming space, our goal is to become a global business with local presence on all continents. For more information regarding the company’s business strategy, please see www.catenamedia.com.
A prerequisite for the successful implementation of the company’s business strategy and safeguarding of its long-term interests, including its sustainability, is that the company is able to recruit and retain qualified personnel. To this end, it is necessary that the company offers competitive remuneration. This policy enables the company to offer competitive total remuneration to senior executives.
Long-term share-related incentive plans have been implemented in the company and Catena Media intends to continue to implement appropriate long-term share-related incentive plans in the future, including both share option programmes and warrant programmes. The aim here is to achieve an increased alignment between the interests of the participants in the programmes and the shareholders of Catena Media, and to create conditions for retaining and recruiting competent personnel. All long-term share-related incentive plans are proposed by the board of directors and submitted to the annual general meeting for approval.
Variable remuneration covered by this policy is also intended to promote the company’s business strategy and long term interests, including its sustainability.
Types of remuneration
Catena Media will offer compensation that is in line with market terms and based on factors such as the importance of the work duties and the executive’s competence, and experience and performance. Compensation may consist of the following components: fixed base salary; short-term variable remuneration; pension benefits; and other benefits. Additionally, the general meeting may separately resolve to adopt share-related remuneration, which may include both fixed and variable elements.
Fixed base salary
Fixed base salary constitutes of compensation for a committed work contribution at a high professional level that ultimately aims to create added value for customers, shareholders, and employees. Fixed base salary will be attractive in comparison to market rates and be based on the executive’s competence, experience and performance. Salaries are reviewed yearly. Senior executives do not receive remuneration for board assignments in the group’s subsidiaries and associated companies.
The satisfaction of criteria for awarding variable remuneration will be measured over a period of one year. Variable remuneration may amount to not more than 100 per cent (for the CEO) and 50 percent (for other senior executives) of annual fixed base salary. Further variable remuneration may be awarded in extraordinary circumstances, provided that such arrangements are limited in time and only made on an individual basis, either for the purpose of recruiting or retaining executives or as remuneration for extraordinary performance beyond the individual’s ordinary tasks. Such remuneration may not exceed an amount corresponding to 200 percent of annual fixed base salary and may not be paid more than once each year per individual. Any resolution on such remuneration is to be made by the board of directors based on a proposal from the remuneration committee.
Criteria for awarding variable remuneration
Variable remuneration is linked to predetermined and measurable criteria which can be financial or non-financial and are to be determined by the remuneration committee from time to time. The remuneration committee will also determine whether such variable remuneration is subject to any deferral periods and whether the company has the right to reclaim any such remuneration. Variable remuneration will be individualised and may have quantitative or qualitative objectives. The criteria shall be designed so as to contribute to the company’s business strategy and long-term interests, including sustainability, for example by being clearly linked to the business strategy or promoting the senior executive’s long-term development. If the company’s earnings before taxes are negative, no variable remuneration will be paid out.
The extent to which the criteria for awarding variable remuneration have been satisfied is to be evaluated/determined when the measurement period ends. The remuneration committee is responsible for this evaluation. For financial objectives, evaluations are to be based on the latest financial information made public by the company.
In the event that any variable remuneration has been paid out on the basis of information which later proves to be manifestly misstated, the company shall be assured of the possibility to reclaim such remuneration.
Senior executives (including the CEO and the deputy CEO, if any) may also be entitled to share-based remuneration according to the terms of share-based incentive programmes that may be approved by shareholders in general meeting from time to time. The terms of these incentive programmes shall at least include: (a) clear, comprehensive, and varied criteria for the award of share-related remuneration; (b) the financial and non-financial performance criteria for awarding share-related remuneration; (c) the methods to be applied to determine to which extent the performance criteria have been fulfilled; and (d) information on any deferral periods and on the possibility for the company to reclaim any such remuneration. Although the terms of such incentive programmes may vary from one programme to another, (i) the vesting period for any share-related remuneration shall never be less than three years nor more than five years and (ii) such share-related remuneration may not, at the time of initial allocation of such awards/rights, amount to more than 150 percent of the CEO's (and deputy CEO's, if any) fixed annual cash salary, with the value of any share-based remuneration to be calculated according to the Black & Scholes valuation model. The purpose of share-related remuneration (through incentive programmes approved by the shareholders) is to achieve an increased alignment between the interests of senior executives and the company's shareholders, as well as to create conditions for retaining and recruiting competent personnel, which in turn contribute to the company’s business strategy and securing of its long-term interests and sustainability.
In this regard, the board of directors has submitted a new long-term share-related incentive plan proposal for key persons, which was approved during the annual general meeting 2023, with a three-year vesting period, the full details of which can be found at https://www.catenamedia.com/investors/corporate-governance/general-meetings.
For the CEO and other senior executives, pension benefits, as applicable, including health insurance, shall be premium-defined unless the individual concerned is subject to a defined benefit pension under mandatory collective agreement provisions. Variable remuneration will not qualify for pension benefits unless required by mandatory collective agreement provisions. The pension premiums for premium defined pension will not amount to more than 25 percent of the annual fixed base salary.
Other benefits may include, for example, life insurance, medical insurance, housing allowance, school fees, travel cost compensation and company cars. Such benefits may amount to not more than 30 percent of the annual fixed base salary.
Pension and other benefits may be duly adjusted for compliance with mandatory rules or established local practice depending on which law the employment is governed by taking into account, to the extent possible, the overall purpose of this policy.
Remuneration to the members of the board of directors
Remuneration for the board of directors is resolved upon by the general meeting. Directors are only entitled to a fixed base salary and may invoice their board remuneration through a company. Directors may also receive separate remuneration for board assignments in subsidiaries of the company.
To the extent that directors perform services within their respective areas of expertise outside of their duties as board members, remuneration will be on market terms and based on a consultancy agreement.
Salary and employment conditions for employees
In the preparation of the board of directors’ proposal for these remuneration guidelines, the board has taken into account salary and employment conditions for employees of the company by including information on the employees’ total income, the components of the remuneration and increase and growth rate over time, in the remuneration committee’s and the board of directors’ basis of decision when evaluating whether the policy and the limitations set out herein are reasonable. The development of the gap between the remuneration to senior executives and remuneration to other employees will be disclosed in the remuneration report.
Duration and termination of employment, etc.
Senior management employment contracts are generally not limited in time. The notice period may not exceed six months if notice of termination of employment is made by the company. Upon termination by the company, and in addition to their fixed monthly salary during the notice period, the members of the senior executive, including the CEO is entitled to a maximum of 12 months’ base salary as severance pay. If termination is made by the senior executive, the period of notice may not exceed six months and there is no right to severance pay.
All directors must retire from office at the end of each annual general meeting and be eligible for re-election. Directors may be removed, in accordance with and subject to the terms of the Companies Act (Chapter 386 of the laws of Malta) prior to the expiry of their term of office by ordinary resolution of the shareholders in general meeting. The directors are not entitled to any severance pay in the event of any such removal.
The decision-making process to determine, review and implementation of the guidelines
The board of directors has a remuneration committee whose tasks include preparing the board’s decision to propose guidelines for executive remuneration. The board must prepare a proposal for new remuneration guidelines at least every fourth year and submit it to the general meeting. The guidelines will be in force until new remuneration guidelines are adopted by the general meeting. The remuneration committee must also monitor and evaluate programmes for variable remuneration of senior executives, the application of the guidelines for executive remuneration, and the company’s current remuneration structures and compensation levels. Remuneration committee members are non-executive directors independent of the company and its senior executives. The composition of the committee and its independence aims to avoid any potential conflicts of interest in determining senior management remuneration. The CEO and other senior executives do not participate in the board of directors’ processing of and resolutions regarding remuneration-related matters in so far as they are affected by such matters.
Description of material changes to the guidelines and how the views of shareholders have been taken into consideration
The only material changes which these proposed guidelines purport to make to the 2021 guidelines concern the severance pay of senior executives other than the CEO. Whereas the 2021 guidelines provided that other senior executives' fixed base salary during the period of notice, together with any severance pay, could not exceed an amount equivalent to the executive’s fixed base salary for six months, these guidelines propose that "upon termination by the company, and in addition to their fixed monthly salary during the notice period, the members of the senior executive, including the CEO is entitled to a maximum of 12 months’ base salary as severance pay”.
Further, the guidelines have been amended to clarify that the vesting period covers any share-related remuneration (not just the share-related remuneration of the CEO and the deputy CEO, if any), as is the case in the 2021 guidelines, and will never be less than three years nor more than five years (currently two and four years respectively in the 2021 guidelines).