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 chair and one member is an employee representative.

The Board of Directors has in March 2019 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 (“Remuneration Principles”)”, 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 chair, and two 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 should 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 2018. All Remuneration Committee members attended all committee meetings within the member’s term in 2018, except one member who was excused from one meeting within the member’s term in 2018. Please refer to the Annual Report on pp. 50-51 for a detailed attendance overview.


Remuneration Committee Report 2018

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 2018, the Remuneration Committee met 5 times and dealt with the following matters:

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

  • Reviewed and recommended to the Board changes to the Remuneration Principles to be approved by the annual general meeting.
  • Reviewed feedback from investors on Novo Nordisk’s Remuneration Principles as well as actual remuneration.
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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 2019 to be approved by the annual general meeting.
  • Reviewed Group Internal Audit’s report on Board remuneration.
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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.
  • Recommended to the Board changes in executive remuneration in 2018 and as well as the general remuneration level for 2019.
  • Reviewed the short-term cash-based incentive programme for the Executive Management and recommended to the Board the structure for 2019.
  • Reviewed the long term share-based incentive programme for the Executive Management and recommended to the Board the structure for 2019.
  • Reviewed the shareholding requirements for executives as well as the executives’ adherence to the shareholding requirements.
  • Reviewed and recommending to the Board proposals for remuneration of new executives.
  • Reviewed the separation terms for executives leaving the company.
  • Reviewed Group Internal Audit’s report on executive remuneration.
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Reporting on Remuneration

  • Reviewed and recommended to the Board the Remuneration Report for 2018 to form part of the company’s Annual Report 2018.
  • Reviewed and endorsed the model for the Remuneration Report for 2018 to be uploaded on novonordisk.com.
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Remuneration Committee matters and governance

  • Endorsed the Annual Work Plan for 2019.
  • Conducted a self-evaluation 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 2018.
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Special focus areas

  • Remuneration of new executives – assessing and recommending to the Board remuneration levels for new executives.
  • Executive remuneration levels – recommending to the Board appropriate levels of remuneration for the executives based on available benchmark data.
  • Remuneration components – general reviews of various executive remuneration components such as short-term incentives, long term incentives, termination and severance payments, claw back provisions etc.

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