The proposals submitted
at Annual General Meeting of Kaupthing Bank on Friday 16 March
2007 were approved.
1. The following proposal on
dividends was approved:
The Board of Directors of
the Bank proposes that shareholders be paid dividends amounting to ISK 10,366
million (EUR 118 million) for the operating year 2006, or ISK 14 per share,
which corresponds to 12.2% of net earnings.
The record date for dividends will be on the morning of 19 March 2007 in
Iceland. The record date for dividends
will be on 21 March 2007 in Sweden. The
ex-date in Iceland and Sweden will be on 19 March 2007. The payment of dividends shall be effected on
28 March 2007 (29 March 2007 in Sweden). In other respects, reference is made to
the Annual Accounts of the Company as regards the further disposal of profits
and other changes to the Company's equity.
2. The following proposals on
amendments to the Articles of Association were approved:
A) The following Paragraph shall
form a new Paragraph 2 in Article 4 of the Articles of Association. The current
Paragraph 2 which contains an authorisation to increase share capital by up to
49,100,000 shares or up to ISK 491,000,000 nominal value, shall be deleted.
"The Board of Directors of the Company is authorised to increase
the share capital of the Company by up to ISK 1,500,000,000 nominal value
through the subscription of up to 150,000,000 new shares. The current
shareholders waive their pre-emptive rights to the new shares pursuant to Article
34 of Act no. 2/1995 on Public Limited Companies. The Board of Directors may,
however, authorise shareholders in each instance to subscribe for the new
shares, in part or in whole. There will be no restrictions on trading in the
new shares. The new shares shall belong to the same class and carry the same
rights as other shares in the Company. The new shares shall grant rights within
the Company as of the date of registration of the increase of share
capital. The Board of Directors of the
Company shall determine more specifically how this increase will be executed,
with reference to price and terms of payment. The Board of Directors shall also
determine the stages in which the authorisation will be exercised. The Board of
Directors of the Company is authorised to decide that subscribers pay for the
new shares in part or in whole with other valuables than cash. This
authorisation shall be effective until 16 March 2012, to the extent that it has
not been exercised before that date."
B) The following new point,
which shall be Point 5, shall be added to Paragraph 1, Article 13 of the
Articles of Association. The numbering of subsequent points shall be altered
"A proposal of the Board of Directors on a
C) Following the words
"annual accounts" in the second paragraph of Article 15 of the
Articles of Association, the words "report of the Board of Directors, the
Board’s proposal on the remuneration policy" shall be added.
D) The following paragraph shall
form a new Paragraph (Paragraph 5) in Article 15 of the Articles of
Association: "If the Board of Directors has decided that a shareholders’
meeting shall be held partly electronically, shareholders who participate
electronically in the meeting shall submit questions on the agenda or submitted
documents etc. related to the shareholders’ meeting, not later than 5 days
before the shareholders’ meeting."
E) The following sentence shall
be added to the third Paragraph of Article 19: "Information on the
candidates shall be available at the Bank’s office no later than two days prior
to the shareholders’ meeting."
3. The following proposal of
the Board of Directors on a remuneration policy was approved:
The Remuneration Policy of Kaupthing Bank
The Board of Directors of Kaupthing Bank
proposes that the AGM held on 16 March 2007 confirm the following Remuneration
Policy of Kaupthing Bank:
In accordance with Act 2/1995 article 79a and rules on good corporate
governance the Board of Directors of Kaupthing Bank
shall approve the Bank’s remuneration policy concerning wages and other
payments to the Chief Executive Officer and other senior managers of the
Company as well as its Directors.
The remuneration policy is binding on the Company's Board of Directors
where it pertains to payments in the form of share certificates, call and put
options, priority purchase rights and other kinds of payments which are linked
to share certificates in the Company or the development of the price of shares
in the Company. In other respects the remuneration policy is of guidance for
the Company's Board of Directors.
II. Compensation Committee
The Board has nominated a Compensation Committee to advise the Board on
matters relating to executive compensation and administration of the Company’s
incentive compensation and equity-based plans. The Compensation Committee
reports its activities to the Board on a regular basis and makes such
recommendations as the Compensation Committee deems necessary or appropriate.
This arrangement is in accordance with the guidelines from the Iceland
Chamber of Commerce on Corporate Governance issued in 2005 and recommendations
from UK Corporate Governance Committees on the Code of Best Practice.
III. Remuneration Policy
The Annual General Meeting of Kaupthing Bank
held on 27 March 2004 confirmed the submitted policy from the Compensation
Committee regarding employee stock options and the financing of employee share
The principal in compensating executives is to align the incentives of
the executives with actions that will enhance long-term shareholder value. The continued growth and strong position of
the Bank lie to a large extent in the Bank’s ability to retain existing key
employees and to attract new ones.
The key principles of the Compensation Committee are:
employees are regarded as corner stones in the continued growth of the Bank and
its good standing.
Compensation to key employees must be attractive and competitive.
Option schemes for key employees are to be continued and financing to be provided
in this context.
IV. Remuneration to Board Members
Board Members shall receive a fixed monthly payment in accordance with
the decision of the AGM, as stipulated in article 79 of the Act no. 2/1995 on
Public Limited Companies. The Board of Directors shall submit a proposal on the
remuneration for a term of one year, taking into account the time board members
spend on their duties, the responsibility involved and the Bank’s operations in
V. The structure of salaries
In accordance with the Bank’s policy the Compensation Committee makes a
proposal on the salaries paid to the CEO and the Executive Chairman. The proposal is based on an examination by
the Committee of salaries paid to executives of European banks and information
from external consultants.
The basic salary to other Managing Directors is determined by the CEO in
consultation with the Managing Director of Human Resources taking into account
the responsibility and the scope of the management position in question.
Bonus payments are only made when Kauphing
Bank’s required return on equity of 15% has been achieved. Bonus payments to
others than the CEO and the Executive Chairman are determined by the CEO in
consultation with the Executive Chairman of the Board of Directors and the
Managing Director of Human Resources. A
specific proportion of bonus payments above a certain amount will be linked to
the price of the Bank's shares and payment deferred for three years. The payment
is however subject to the basic condition that the employee remains employed
within the group.
To align the incentives of the employees with actions that will enhance
long-term shareholder value, the Bank has enabled employees to purchase shares
in the Bank. The Bank has in this context written call options, offered loans,
according to general rules, to finance purchases, and in some cases written put
options on shares sold.
The total put options and call options written towards employees can at
any given time be up to 9% of issued shares in the Bank. The purchase or strike
price in options shall be the market price on the date the options are written.
There are still two years left of the current option scheme with the
Executive Chairman and the CEO. According to the scheme they are each entitled
to 812,000 shares in 2007 and 812,000 shares in 2008 but on the recommendation
of the Compensation Committee the Board of Directors of Kaupthing
Bank recommends that the scheme be extended for three years, subject to the
approval of the AGM. The amount is to be the same as in the current option
scheme or 812,000 shares every year in 2009, 2010 and 2011. The price will be the market price on the
date of the AGM 2007.
Termination or retirement payments
In general no additional retirement or termination payments to those
stipulated in the employment contract shall be agreed upon in the case of
termination. However special circumstances may lead to a separate termination
agreement being concluded regarding retirement or termination payments.
4. The following persons were
elected as members of the Board of Directors for the term of one year:
1. Sigurdur Einarsson – United
Kingdom, Executive Chairman of Kaupthing Bank hf. (First elected 2003).
2. Hjörleifur Jakobsson –
Iceland, CEO of Ker hf.
(First elected 2003).
3. Antonios P. Yerolemou –
United Kingdom, Member of the Board of Directors of Bakkavör
4. Ásgeir Thoroddsen –
Iceland, Attorney to the Supreme Court of Iceland. (First
5. Bjarnfredur Ólafsson –
Iceland, Attorney to the District Court of Iceland. (First
6. Brynja Halldórsdóttir –
Iceland, CEO of Norvik hf.
(First elected 2004).
7. Gunnar Páll Pálsson – Iceland, CEO of VR trade union. (First elected 2001).
8. Niels de Coninck-Smith –
Denmark, CEO of Ferrosan A/S. (First elected 2005).
9. Tommy Persson – Sweden, CEO of Länsförsäkringar
AB. (First elected 2002).
following substitutes were elected:
1. María Sólbergsdóttir – Iceland,
project manager at Kaupthing Bank.
2. Gudný Arna Sveinsdóttir – Iceland, CFO of Kaupthing
3. Martha Eiríksdóttir – Iceland, Head of Business
Relations of Landsnet.
4. Margeir Daníelsson –
Iceland, former CEO of the Co-operative Pension Fund of Iceland.
5. Thórdur Magnússon –
Iceland, Chairman of the Board of Directors of Eyrir Invest ehf.
6. Panikos J. Katsouris –
United Kingdom, CEO of Katsouris Brothers Ltd.
7. Hildur Árnadóttir –
Iceland, CFO of Bakkavor Group hf.
8. Jónas Gudbjörnsson –
Iceland, CFO of Ker hf.
9. Kristin Pétursdóttir – Iceland, economist.
5. The following proposal on
remuneration of the Board of Directors for the term of one year was approved:
It is proposed that Board
members receive ISK 400,000 per month and that the Executive Chairman receives
ISK 800,000 per month. Remuneration to substitutes shall be ISK 400,000 for
each Board meeting attended. In addition
remuneration for Board members who serve on the sub-committees of the Board
shall be ISK 150,000 per month to each member for their position on each
6. The following proposal
regarding election of an auditor for the next accounting year was approved:
It is proposed that KPMG Endurskodun hf. be elected the
company’s auditors and that Sæmundur Valdimarsson, certified auditor,
perform this duty on behalf of the auditing company.
7. The following proposal on
purchase of own shares was approved:
The Board of Directors, acting for the Bank, is authorised to purchase
own shares in the Bank or to accept such shares as collateral. This
authorisation shall be effective for 18 months from the date of the Annual
General Meeting 2007 with the restriction that the total shares purchased or
accepted as collateral shall not exceed 10% of the total shares in the Bank at
each time. The price paid shall not be lower than 20% below, and not higher
than 20% above, the rate at which the Bank's shares are priced on the Iceland
Stock Exchange (OMX Iceland) or Stockholm Stock Exchange (OMX Sweden).
A corresponding authorisation granted by the 2006 Annual General Meeting
contact Jónas Sigurgeirsson,
Chief Communications Officer, tel. + 354 444 6112.