The Remuneration Committee

The Remuneration Committee consists of up to five members elected by the Board from among its members. One member is designated as chairman and one member is an employee representative.

The Board of Directors has in March 2018 elected the following members to the Remuneration Committee:


Roles and responsibilities

The Remuneration Committee assists the Board with oversight of the remuneration policy for the members of the Board of Directors and Executive Management including guidelines on incentive pay to Executive Management in the company referred to as “The principles for remuneration of Board members and executives in Novo Nordisk A/S”, the remuneration of the members of the Board of Directors and its committees, the remuneration of the members of Executive Management, and other tasks on an ad hoc basis as specifically decided by the Board.


Independence

The Remuneration Committee consists of two non-independent members, including the chairman, and two non-independent members pursuant to the Danish Corporate Governance Recommendations. One member is an employee representative. According to the Danish Corporate Governance Recommendations a majority of the members of a board committee shall qualify as independent. Hence, the composition of the Remuneration Committee does not conform to the Danish Corporate Governance Recommendations. This is due to the fact that the Board of Directors finds that the composition of the Remuneration Committee allows for a member from the Chairmanship who is a representative of the majority shareholder and an employee representative, who both qualify as non-independent Board members, being on the Remuneration Committee while maintaining an operational structure of the Remuneration Committee with relative few members.


Attendance

The Remuneration Committee conducted five meetings in 2017. The members of the Remuneration Committee participated in all meetings within the member’s term in 2017. Please refer to the Annual Report 2017 on pp 54-55 for a detailed attendance overview.


Remuneration Committee Report 2017

The Remuneration Committee works according to an Annual Work Plan with fixed agenda items. In addition, the Remuneration Committee meets when developments require additional meetings.

In 2017, the Remuneration Committee met five times and dealt with the following matters:


Remuneration policy for the members of the Board of Directors and Executive Management

  • Reviewed and recommended to the Board changes to the Remuneration Policy to be approved by the annual general meeting.


Remuneration of the members of the Board of Directors and its committees

  • Reviewed Danish, Nordic and European Benchmark Data on board and board committee remuneration and recommended to the Board the remuneration levels, multiples and allowances for 2018 to be approved by the annual general meeting.
  • Reviewed Group Internal Audit’s report on board remuneration.


Remuneration of the members of Executive Management

  • Reviewed the inclusion criteria for the peer group in the Danish, Nordic and European benchmark and endorsed changes therein.
  • Reviewed Danish, Nordic and European Benchmark Data on executive remuneration and recommended to the Board changes in 2017 and as well as the general remuneration level for 2018.
  • Reviewed the short-term cash-based incentive programme for the Executive Management and recommended to the Board the structure for 2018.
  • Reviewed the long term share-based incentive programme for the Executive Management and recommended to the Board the structure for 2018.
  • Reviewed the proposals for remuneration of executives being promoted and recommending to the Board the remuneration levels.
  • Reviewed key employment terms for the executives not residing in Denmark and endorsed the terms.
  • Reviewed the separation terms for executives leaving the company.
  • Reviewed Group Internal Audit’s report on executive management remuneration.


Reporting on Remuneration of the members of Executive Management

  • Reviewed and recommended to the Board the Remuneration Report for 2017 to form part of the company’s Annual Report 2017.


Remuneration Committee matters and governance

  • Endorsed the Annual Work Plan for 2018.
  • Conducted a self-assessment including a review of the Remuneration Committee Charter.
  • Conducted private meetings without the assigned executive being present.
  • Endorsed the report on the Remuneration Committee’s activities in 2017.


Special focus areas

  • Benchmarks – supplementing the executive remuneration benchmarks with additional benchmark data presented by an external remuneration consultant.
  • Executive remuneration levels – based on available benchmark data recommending to the Board an increase of the fixed base salary for Danish based members of Executive Management; an adjustment of the short-term cash-based incentive programme for 2018 for Executive Vice Presidents and a modernisation of the maximum of the long-term share-based incentive programme to ensure that it is competitive.
  • Remuneration of executives – recommending to the Board remuneration levels for executives being promoted.