StrongPoint ASA (STRO) Earnings Call Transcript & Summary

Good morning, and very welcome to StrongPoint's Extraordinary General Meeting here at Slynga, StrongPoint's headquarter. When I stood here back in April, and we had our ordinary general meeting, I said that I hope that, that was the only time we should do a digital general meeting, but COVID-19 has proven me wrong on that one, so here we go again in a digital version. We have a very brief agenda. And I've been asked to chair the meeting as Chairman of StrongPoint. My name is Morthen Johannessen. In order to co-sign the protocol and the minutes from this general meeting, Hilde, our CFO, will do so. We have some formalities in terms of counting the shares that we have got prior to the meeting and also approving the notice and agenda before we go into the 2 specific items that's behind this call for this extraordinary meeting. That's a proposal for a dividend for the financial year 2019 and it's also an approval that we are asking for a long-term incentive program for the management of the company. Formalities first. And it's an impressive number of votes that we received. I've been told that, in fact, it's -- this participation now is at all-time high level, with more than 14 million shares, which represent then above 33% of the total issued shares in the company. So we appreciate that. In terms of the notice and the agenda, we have not received any more input or anyone trying to -- or wanted to change the agenda, so we can approve it as it has been sent out and communicated. Back in April, when we had our ordinary meeting -- ordinary general meeting, we had just got this new situation worldwide with the COVID-19. And as a Board, we decided that it was definitely not the time to go to the Annual General Meeting and suggest a dividend, because we were, as most companies, a little bit uncertain in terms of how we would be able to perform under those circumstances. In light of that, we are very pleased that the company has performed very well during the 3 first quarter of this year. Those of you being early birds, listening into the quarter 3 presentation this morning by Jacob and Hilde, have seen that year-to-date performance is very solid. And we are therefore pleased to be able to propose a dividend of NOK 0.60. And paying that dividend, when approved, I think it's -- goes now back to 2011, the company has every year since 2011 been able to pay a dividend to our shareholders, and it's our ambition to be able to do so also in the years to come. So with the 100% support for that proposal, we can then pay out the dividend of NOK 0.60 per share. That has been approved. Then it's the long-term incentive program that we have been working on for quite some time. You all know that we have some very stretched ambitions for the next coming years. And we feel it's very appropriate also to have some long-term incentive plans in place. In order to go through the details there, I have with me one of my Board colleagues, Peter Wirén, which is chairing our [ Co Pandem ] Committee. So I will hand over to Peter. Peter, please?

So good morning, everyone. My name, as Morthen said, is Peter Wirén, and I'm the Chairman of the Compensation Committee at StrongPoint. So I'm here to talk to you about the compensation program that the Board has worked on for some time and that we think will further align key personnel's remuneration and incentives with shareholders' interest. We have done a benchmark to see how management at StrongPoint stands in relation to other management teams in similar businesses out there. And we have concluded that there -- that we are at a reasonable level when it comes to remuneration, which is good as we want to be competitive, but not the front-runner when it comes to remuneration. Having said that, the benchmark tells us that we should consider a long-term incentive program. So share purchase programs, mandatory use of part of management's cash bonuses compensated in shares, and the Board of Directors partly compensated in shares are all examples of this. But in order to also cover the more long-term aspects, the board has considered some different alternatives, and has concluded that a share based-option program as the long-term incentive program for leading personnel would be a good instrument to strengthen this further. The Board of Directors intends to launch an equity share-based option plan as part of the total remuneration for the group management team and other leading personnel. The option program is designed to align and incentivize management performance with shareholder value creation and to attract and retain high-caliber executive management and key personnel. And the Board considers this to be an important element in the efforts to reach the communicated 2025 strategic milestones and ambitions. So the long-term incentive program will be strongly linked to the execution of the 2025 strategic plan. The CEO and group management will be included in the incentive program, and other senior managers and key personnel could be included at the later stage. Sorry. Yes. Thank you. So here is the program structure. And granted options are awarded over 3 years, with the spread of tranches of 25%, 25%, and 50% every year over the 3 years to achieve the desired retention effect. The options will be vested annually, with the availability to exercise the option 1 to 5 years after the grant period. And the expiry date is 5 years after grant. Strike price is equal to market price per share at the time of grant, and it's calculated as the average market price per share over the last 5 days before grants. So it's a volume weighted average price. Between 1% and 3% of share capital is allocated to options every year, and maximum outstanding options shall never exceed 10% of share capital. And the Board of Directors will every year decide the total frame of options and the allocation to the CEO, and allocations to the rest of group management will be done in cooperation with the CEO. So that's the proposal. And therefore, the Extraordinary General Meeting is asked to authorize the Board to set the options, either by issuing new shares or by acquiring shares in the market. The number of options granted on the long-term incentive program in the 2020 grants will not exceed 3% of the total current outstanding shares in the market in -- of the company, sorry. So that's what we ask the general meeting to decide. And Morthen, over to you.

Thanks, Peter. I think you have done a very convincing presentation, Peter, because you got close to 100% support for that proposal. So the long-term investment program has then been approved by our shareholders in this Extraordinary General Meeting, with the technicalities related to the program that you all have seen and received sent out prior to this meeting. So thanks a lot for the support for -- also for that program. That conclude this Extraordinary General Meeting. I would like to thank the shareholders for their participation, sending in their votes and supporting these 2 items then proposed by the Board of Directors. I would also like to close this session by congratulating and thanking the entire StrongPoint organization for very solid and good performance year-to-date, as you have seen and heard earlier this morning. And you all know that we have very ambitious plan for the years to come, but I think we are steadily building a very, very solid platform in order to achieve those ambitions. So thanks a lot to you, all. Take here and stay safe. Thanks a lot.