Corporate governance of MTG and the MTG Group is exercised through a number of corporate bodies. At the Annual General Meeting, shareholders exercise their voting rights with regard to the composition of the Board of Directors of MTG and election of external auditors. The duties of the Board are partly exercised through its Audit Committee and Remuneration Committee and the Chief Executive Officer of MTG (‘CEO’). The CEO is in charge of the day-to-day management of the Group in accordance with guidelines and instructions from the Board.
The Nomination Committee consists of representatives of some of MTG’s largest shareholders, and its responsibilities include:
- To evaluate the Board of Directors’ work and composition
- To submit proposals to the Annual General Meeting regarding the election of the Board of Directors and the Chairman of the Board
- To prepare proposals regarding the election of Auditors in cooperation with the Audit Committee (when appropriate)
- To prepare proposals regarding the fees to be paid to the Board of Directors and to the Company’s Auditors
- To prepare proposals for the Chairman of the Annual General Meeting
- To prepare proposals for the administration and order of appointment of the Nomination Committee for the Annual General Meeting.
Nomination Committee for the Annual General Meeting 2021
In accordance with the resolution by the Annual General Meeting of MTG shareholders regarding the procedure of the Nomination Committee, a Nomination Committee has been convened to prepare proposals for the 2021 Annual General Meeting.
The Nomination Committee comprises Klaus Roehrig, appointed by Active Ownership Corporation; Joachim Spetz, appointed by Swedbank Robur Funds; David Marcus, appointed by Evermore Global Advisors; and David Chance, Chairman of the Board. In line with past practice, the members of the Committee have appointed Klaus Roehrig, representing the largest shareholder on the last business day of August 2020, as the Committee Chairman.
Shareholders wishing to propose candidates for election to the MTG Board of Directors should submit their proposals in writing via email agm(at)mtg.com or to The Company Secretary, Modern Times Group MTG AB, Box 2094, SE-103 13, Stockholm, Sweden.
The Nomination Committee motivated opinion regarding its proposal to the Annual General Meeting and a brief presentation of its work will be published well in advance of the 2021 Annual General Meeting and will be included in the documentation provided on the General Meetings page of this site.
Nomination Committee motivated opinion 2016
Nomination Committee motivated opinion 2015
Nomination Committee motivated opinion 2014
Nomination Committee motivated opinion 2013
Nomination Committee motivated opinion 2012
Nomination Committee motivated opinion 2011
Nomination Committee motivated opinion 2010
Nomination Committee motivated opinion 2009
Nomination Committees report 2008
Board of Directors
Board members are elected at the Annual General Meeting for a period ending at the end of the next Annual General Meeting. According to the Articles of Association, the number of Board members shall be no less than three and no more than nine members elected by the shareholders.
The Board of Directors of MTG is currently comprised of seven Non-Executive members; David Chance (Chairman), Simon Duffy, Natalie Tydeman, Gerhard Florin, Marjorie Lao, Chris Carvalho and Dawn Hudson.
MTG’s Board of Directors is responsible for the overall strategy of the Group and for organizing its administration in accordance with the Swedish Companies Act and the Swedish Corporate Governance Code. The Board’s work and delegation procedures, instructions for the Chief Executive Officer and reporting instructions are updated and approved annually in connection with the Q4 Board meeting. As in previous years, a Remuneration Committee and an Audit Committee have been established within the Board. These committees are preparatory bodies of the Board and do not reduce the Board’s overall responsibility for the governance of the Company and decisions taken.
The Audit Committee is currently comprised of Simon Duffy (Chairman), Marjorie Lao, Chris Carvalho and Dawn Hudson. The Audit Committee’s assignments are stipulated in Chapter 8, Section 49b of the Swedish Companies Act. These tasks include monitoring MTG’s financial reporting and the efficiency of MTG’s internal controls, as well as maintaining frequent contacts with the external auditor and the Group’s Governance, Risk and Compliance Director. The Audit Committee’s work primarily focuses on the quality and accuracy of the Group’s financial accounting and the accompanying reporting, as well as the internal financial controls within MTG. Furthermore, the Audit Committee evaluates the auditors’ work, qualifications and independence. The Audit Committee monitors the development of relevant accounting policies and requirements, discusses other significant issues in connection with MTG’s financial reporting and reports its observations to the Board of Directors.
The Remuneration Committee is currently comprised of Natalie Tydeman (Chairman), David Chance and Gerhard Florin. The Remuneration Committee’s assignments are stipulated in Chapter 9.1 of the Swedish Corporate Governance Code, and comprise matters concerning salaries, pension terms and conditions, incentive programs and other conditions of employment for the senior executives.
Remuneration of Board members
The remuneration to the Board of Directors for Board work, and work in the committees of the Board, is proposed by the Nomination Committee and approved annually by the Annual General Meeting. The Nomination Committee proposal is based on benchmarking of peer group company compensation and company size.
The 2020 Annual General Meeting approved the following fees to the Board of Directors and the members of the Board’s committees:
- SEK 1,450,000 to the Chairman of the Board
- SEK 500,000 to the other six members of the Board
- SEK 235,000 to the Chairman and SEK 130,000 to each of the other three members of the Audit Committee
- SEK 140,000 to the Chairman and SEK 52,500 to each of the other two members of the Remuneration Committee
According to the Articles of Association, MTG shall have no more than three auditors with up to three deputy auditors. A registered accounting firm may be elected as auditor. The auditor’s term of office shall last until the end of the Annual General Meeting that is held during the first, second, third or fourth financial year after the auditor was elected.
At the 2020 Annual General Meeting, KPMG was re-elected as auditor until the end of the Annual General Meeting 2021. Authorized Public Accountant Helena Nilsson was appointed as auditor-in-charge. KPMG has been the Company’s external auditors since 1997.
The audit assignment involves the examination of the Annual Report and financial accounting, the administration by the Board and the CEO, other tasks related to the duties of a company auditor, and consultation or other services that may result from observations noted during such examination or the implementation of such other tasks. All other tasks are defined as other assignments. The auditor reports its findings to the shareholders by means of the Auditor Report, which is presented to the Annual General Meeting. In addition, the auditor reports detailed findings at each of the ordinary meetings of the Audit Committee and to the full Board as necessary.
Guidelines for remuneration for the CEO and other senior executives in the MTG Group, adopted by MTG’s Annual General Meeting on May 18, 2020.
These Remuneration Guidelines shall be applied to employment agreements entered into after the 2020 AGM and to changes made to existing agreements thereafter. The guidelines shall be in force until new guidelines are adopted by the General Meeting, the intention is for the guidelines to remain in place for up to four years. These guidelines do not apply to any remuneration decided or approved by the General Meeting such as long-term share or share price related incentive plans and ordinary Board remuneration.
The Board has established a Remuneration Committee. In order to avoid any conflict of interest, the Remuneration Committee consist only of members that are independent of the company and its management. The remuneration is managed through well-defined processes ensuring that no individual is involved in the decision-making process related to their own remuneration. The Remuneration Committee’s tasks include preparing the Board’s decision to propose guidelines for executive remuneration. The Board shall prepare a proposal for new guidelines at least every fourth year and submit it to the Annual General Meeting. The guidelines shall be in force until new guidelines are adopted by the General Meeting. The Remuneration Committee shall also monitor and evaluate programs for variable remuneration to the executive management, the application of the guidelines for executive remuneration as well as the current remuneration structures and compensation levels in the company.
Information regarding the existing remuneration arrangements for the Senior Executives can be found in the most recent Annual Report, this includes fixed and variable compensation, long-term incentive plans and other benefits.
MTG is a strategic operational and investment company that combines investment expertise with hands-on operational engagement. MTG’s Vision is to become the home of esports and gaming entertainment. MTG’s Mission is to grow the gaming ecosystem and benefit its communities through relevant storytelling with craftmanship, innovation and sustainability at its centre. MTG’s Strategy is to drive profitability and organic growth in portfolio companies and invest in high-potential esports and gaming businesses.
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 can recruit and retain qualified personnel. To this end, it is necessary that the company offers competitive remuneration. The remuneration structures shall encourage employees to do their utmost to safeguard shareholders’ interests and thereby the company’s sustainability and long-term value creation.
More information on MTG’s strategy can be found on the MTG’s website and in the most recent annual report.
The Remuneration Guidelines provides a structure that aligns remuneration with the successful delivery of our long-term strategy: to drive profitability and organic growth in our portfolio companies and invest in high-potential esports and gaming business. The guidelines sets guiding principles for selection of LTIP performance measures and LTIP performance periods to ensure the link to the shareholder value and as such the guidelines contributes to the long-term success and value creation of the company. The guidelines provides for the ability to set relevant financial and non-financial STI measures including governance, social and environmental, further contributing to alignment between the guidelines and sustainability as well as the company values, which are Bold, Smart, Engaging and Fun. The performance measures for the STI are determined by the Remuneration Committee based on the business priorities for the year. Each year stretch objectives are set in the light of the Company’s annual business plan and the operating environment. The guidelines provides incentives for the CEO and the Senior Executives to drive innovative and 5 performance based culture which contributes to achieving our company mission.
The remuneration of the CEO and the Senior Executives consist of base salary, short-term and long-term incentives, pension and other benefits.
Attracts and retains the CEO and the Senior Executives taking into account of their individual responsibilities, their personal contribution, the size of role and business complexity. The base salary for the CEO and the Senior Executives shall be competitive. The base salary is reviewed annually, typically with effect from 1 January. The Remuneration Committee looks at pay practices in selected comparison groups, the benchmarks are conducted through independent advisors. Decisions on salary also take into account the performance and experience of the individual, changes in the size and scope of the role, and the level of salary awards across the business.
Short Term Incentive (STI)
Drives and rewards achievement of our stretching annual financial, strategic, operational and sustainability targets aligned with our business strategy. The STI is capped at 125% of the individual’s base salary. Performance measures and weightings are reviewed at the start of each year to take account of current business plans and to ensure they continue to support the short-term business strategy. These measures can vary from year to year to reflect business priorities and typically the measures includes a balance of the Company’s financial performance measures (for example profitability, revenue and cash flow measures) and non-financial measures (for example key operational, strategic, environmental, social, governance or other sustainability related measures) provided that in any given year majority of weighting will be on financial performance measures. Through the combination of the financial measures with the non-financial measures the STI will contribute to the long-term interests and sustainability of the company. Details of actual performance measures applied for each year and how they support the business strategy will be disclosed in the annual Remuneration Report. Performance against targets is monitored and determined based on assessment of performance level versus each target level. The Board reviews the performance and determines the extent to which each of the targets have been achieved, to determine the final pay-out level. As regards to the financial criteria, the evaluation shall be based on the latest financial information made public by MTG. The Board has discretion to adjust the formulaic STI outcome in changed circumstances to improve the alignment of pay with value creation for shareholders, and to ensure the outcome is a fair reflection of the company´s performance, and will take into account any relevant environmental, social, and governance (ESG) matters when determining outcomes. To further strengthen the connection to the shareholders’ interest and the company’s long-term value creation, payment of part of the STI may be deferred and delivered in MTG shares and such shares to be retained for an agreed period of time. Awards are subject to claw-back in cases where the final payment is made based on performance that is proven to be manifestly misstated. The Board may decide to reclaim whole or a part of the final payment. In its decision to reclaim any amount the Board may, in its sole discretion, reduce the amount to be reclaimed based on the employee’s lack of direct involvement in the performance and reporting of performance which has been manifestly misstated.
By way of exception, additional one-off arrangements can be made on a case by case basis when deemed necessary, under the condition that such extraordinary arrangement is made for recruitment or retention purposes, subject to Board approval. Each such arrangement shall be capped at, and never exceed, 200% of the individual’s annual base salary.
Long Term Incentive Programme (LTIP)
The Board may offer LTIPs in order to attract and retain key individuals, as well as to share the success of the company’s growth. The LTIPs that can be offered are 3-4 –year plans which are share or share price related programmes (such as performance share plans and/or warrant plans), which will be put forward to the General Meeting to resolve on – irrespective of these guidelines. Share and share price related LTIPs shall be structured to ensure a long-term commitment to the development of MTG and with the intention that the Senior Executives shall have a significant long-term shareholding in MTG. The outcome shall be linked to certain pre-determined performance criteria, based on MTG’s share price and value growth. The Board has also – irrespective of these guidelines – in 2018 agreed to offer one employee, today a Senior Executive, participation in the local Management Incentive Programs, i.e. a cash based LTIP linked to pre-determined levels for the value creation of a specific vertical or subsidiary within MTG. The maximum outcome has a predetermined cap.
More information regarding the ongoing LTIPs, including the criteria which the outcome depend on, can be found on MTG’s website and in the most recent annual report, www.mtg.com.
Provides competitive and appropriate retirement arrangement in the context of the market practice in the applicable country of the executives employment or residence and total remuneration. The pension arrangements shall be provided in the form of a defined contribution or as a cash allowance and shall amount to no more than 20% of the individual’s annual base salary.
Provides competitive level of benefits and supports recruitment and retention. Other benefits may include car allowance, company car and housing. The combined value of these benefits shall normally constitute a limited value in relation to the total remuneration package and shall correspond to market practice.
Additional benefits may be received by Senior Executives in certain circumstances such as relocation or international assignment, taking into account the overall purpose of these guidelines.
Termination of employment and severance pay
In general, executive contracts have indefinite duration. The notice period can be up to one year for either party and non-compete restrictions can go up to one year. The Company may require the individual to continue to fulfil current duties during the notice period or may assign garden leave.
In case of termination of a Senior Executive’s employment agreement, the STI is evaluated and paid prorata for the period up to the termination date where applicable. It should be noted that these cases are handled according to the discretionary right of the Board.
Salary and employment conditions for employees
In the preparation of the Board’s proposal for these guidelines, salary and employment conditions for employees of the company have been taken into account by including information on the employee’s total income, the components of the remuneration and increase and growth rate over time, in the Board‘s basis of decision when evaluating whether the guidelines and the limitations set out herein are reasonable.
Deviations from the Guidelines
The Board may temporarily resolve to deviate from the guidelines, in whole or in part, if in a specific case there is special cause for the deviation and a deviation is necessary to serve the Company’s long-term interests, including its sustainability, or to ensure the Company’s financial viability. The Remuneration Committee’s tasks include preparing the Board’s resolutions in remuneration-related matters. This includes any resolutions to deviate from the guidelines.
CEO & Group Management
MTG’s Group Management comprises the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) and other key executives.
The CEO is responsible for the day-to-day management of the Company in accordance with the instructions established by the Board.
The CEO and the Group Management team, supported by the various employee functions, are responsible for the adherence to the Group’s overall strategy, financial and business control, financing, capital structure, risk management and M&A. Among other tasks, this includes preparation of financial reports and communication with the stock market and other issues. The Company policies issued include inter alia code of conduct, anti-bribery and corruption, risk management and financial control.
The guiding principles for executive remuneration are found in the Remuneration Guidelines approved by the Annual General Meeting, the guidelines are attached to the Notice to the Annual General Meeting and may be in force up to four years. A proposal for new Remuneration Guidelines shall be prepared and submitted to the Annual General Meeting if there are significant changes or at least every fourth year. The remuneration paid to Group Management, as well as information about the beneficial ownership of the Company shares and other financial instruments are set out in the Annual Report every year.
Share based long-term incentive plans (LTIP)
MTG has one outstanding share based long-term incentive program, approved by the 2019 Annual General Meeting. For more details see page 86-87 in MTG’s Annual Report 2019.
Articles of Association
Articles of Association
Modern Times Group MTG AB
Adopted by the Annual General Meeting on 18 May 2020
The name of the Company is Modern Times Group MTG AB. The Company is a public company(publ).
The board of directors shall have its registered office in the municipality of Stockholm.
The primary purpose of the Company’s business shall be to generate profit for its shareholders.
The object of the Company’s business shall be to own and manage real property and movables,primarily through investments in businesses within the sectors of digital entertainment, esport and online gaming. Furthermore, the object of the Company’s business shall be to conduct business operations compatible with the above mentioned businesses.
The Company shall have the right to guarantee or otherwise pledge security for obligations assumed by other companies within the group.
The Company’s share capital shall be not less than SEK 298,000,000 and not more than SEK 1,192,000,000.
The number of shares in the Company shall be not less than 59,600,000 and not more than 238,400,000.
Shares may be issued in three Classes, Class A, Class B and Class C. Class A shares may be issued to a maximum number of 238,400,000, Class B shares to a maximum number of 238,400,000 and Class C shares to a maximum number of 238,400,000. Each Class A share carry ten votes and each Class B share and Class C share carry one vote.
Class C shares do not entitle to dividends. Upon the Company’s liquidation, Class C shares carry an equivalent right to the Company’s assets as the other classes of shares, however not to an amount exceeding up to the quota value of the share, annualised as per day of distribution with an interest rate of STIBOR 30 days with an additional one percentage point calculated from the day of payment of the subscription price. STIBOR 30 days is set on the first business day of each calendar month.
Should the Company resolves on an issue of new Class A, Class B and Class C shares, against other payment than contribution in kind, each holder of Class A, Class B and Class C shares has preferential rights to subscribe for new shares of the same class in proportion to the number of old shares held by such holder (primary preferential rights). Shares not subscribed for with primary preferential rights shall be offered for subscription to all shareholders in the Company (subsidiary preferential rights). If the number of shares so offered is less than the number subscribed for with subsidiary preferential rights, the shares shall be distributed among the subscribers in proportion to the number of already shares held, or, to the extent that this is not possible, by lot.
Should the Company resolves on an issue of new shares solely of Class A shares, Class B shares or Class C shares, against other payment than contribution in kind, all shareholders, irrespective of which class of shares held, are entitled to preferential rights to subscribe for new shares in proportion to the number of shares previously held.
The stipulations regarding preferential rights shall apply mutatis mutandis for new issues of warrants and convertible debt, and shall not infringe on the possibility to resolve on an issue in which the preferential rights of shareholders are waived.
If the share capital is increased by a bonus issue, where new shares are issued, new shares of Class A and Class B shall be issued in relation to the number of shares of the same classes already held. In such cases, old shares of a specific class shall entitle to new shares of the same class. Class C shares do not carry rights to participate in bonus issues. Following a requisite amendment in the Articles of Association, the aforementioned stipulation shall not infringe on the possibility to issue shares of anew class by a bonus issue.
Reduction of the share capital, however not below the minimum share capital, may on request of holders of Class C shares or as resolved by the Company’s Board of Directors or General Meeting, be made by redemption of Class C shares. A request from a shareholder shall be made in writing to the Company’s Board of Directors and the Board of Directors shall promptly act on the matter. When are solution on reduction has been passed, an amount corresponding to the reduction amount shall be transferred to the Company’s equity reserves, if the required funds are available.
The redemption payment per Class C share shall correspond to the quota value of the share annualised per day with an interest rate of STIBOR 30 days with additional one percentage point calculated from the day of payment of the subscription price. STIBOR 30 days shall be initially set on the day of payment of the subscription price.
Following notice of the redemption resolution, holders having requested redemption shall promptly receive payment for the share, or, if authorisation from the Swedish Companies Registration Office or a court is required, following notice that the final decision has been registered.
Upon decision by the Board of Directors, Class C shares shall be reclassified into Class B shares,provided that the shares are held by the Company. Immediately thereafter, the Board of Directors shall report the reclassification to the Swedish Companies Registration Office (Sw. Bolagsverket) for registration. The reclassification is effected when it has been registered and the reclassification been noted in the Swedish Central Securities Depository.
It shall be possible to reclassify Class A shares to Class B shares. Holders of Class A shares shall,during the calendar months January and July each year (the “Reclassification periods”), be entitled to request that all or part of the shareholder’s Class A shares shall be reclassified to Class B shares. The request shall be made in writing and must have been received by the Board of Directors no later than on the last day of the specific Reclassification period. The request shall state (i) the number of Class A shares that the shareholder wants to reclassify or (ii) the maximum percentage of the total number of votes in the Company, that the shareholder wants to hold, after reclassification has been completed of all Class A shares requested to be reclassified during the specific Reclassification period. When making a request according to alternative (ii) above, the shareholder shall also state the total number of Class A and Class B shares that the shareholder holds at the time of the request.
After the end of each Reclassification period, the Board of Directors shall consider the question of reclassification. Immediately thereafter, the Board of Directors shall report the reclassification to the Swedish Companies Registration Office (Sw. Bolagsverket) for registration. The reclassification is
effected when it has been registered and the reclassification been noted in the Swedish Central Securities Depository.
The board shall consist of no less than three and no more than nine directors.
The Company shall have no more than three auditors with up to three deputy auditors. A registered accounting firm may be elected as auditor. The auditor’s term of office shall last until the end of the Annual General Meeting that is held during the first, second, third or fourth financial year after the auditor was elected.
The Company’s financial year shall be the calendar year.
Notice of a General Meeting of shareholders shall be published in the Official Swedish Gazette (Post- och Inrikes Tidningar) as well as on the company’s website. At the time of the notice, an announcement with information that the notice has been issued shall be published in Svenska Dagbladet.
A shareholder that wishes to participate at the general meeting shall notify the company of its participation no later than the day stated in the notice convening the meeting.
A shareholder attending a general meeting may be accompanied by an assistant, however only where the shareholder has provided notification hereof in accordance with the foregoing paragraph.
The Board may collect powers of attorney in accordance with the procedure described in Chapter 7,section 4, second paragraph of the Companies Act.
The Board has the right before a General Meeting to decide that shareholders shall be able to exercise their right to vote by post before the General Meeting.
The shareholder or nominee who on the record date is registered in the share register and in a central securities depository register pursuant to Chapter 4 of the Central Securities Depositaries and Financial Instruments Accounts Act (1998:1479) or any person who is registered in a central securities depository account pursuant to Chapter 4, Section 18 paragraph 6-8 of the mentioned Act, shall be deemed to be authorised to exercise the rights set out in Chapter 4, Section 39 of the Companies Act(2005:551).