The guiding principles for remuneration are found in the Remuneration Guidelines, which are set out below. These Guidelines were adopted by the Annual General Meeting on 17 May 2023.
Below is also information on MTG’s outstanding long-term incentive plans.
Further information on remuneration can be found in the 2022 Remuneration Report (please see further down below) and in the 2022 Annual Report (which is available here).
Guidelines for determining remuneration for MTG’s CEO and other senior executives in the MTG Group (the “Senior Executives”), as well as members of the Board if they are remunerated outside their directorship, adopted by MTG’s Annual General Meeting on 17 May 2023.
These Remuneration Guidelines shall be applied to employment agreements entered into after the 2023 Annual General Meeting and to changes made to existing agreements thereafter. These 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, the Board will however propose new guidelines if material changes of the guidelines becomes necessary. 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.
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. Under the guidelines, executive remuneration shall be on market terms and may consist of the following components: base salary, variable cash remuneration, pension and other benefits.
The guidelines provide 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. The criteria shall be designed to contribute to the company’s business strategy and long-term interests, including its sustainability, by for example being clearly linked to the business strategy.
The Remuneration Guidelines, adopted by the Annual General Meeting 2021, have been fully implemented. No deviations from the guidelines have been decided and no derogations from the procedure for implementation of the guidelines have been made. The guidelines are found on pages 100-105 in the Annual Report for 2022. The auditor’s report regarding the company’s compliance with the guidelines is available on www.mtg.com/governance.
Chris Carvalho has been a member of the Board of MTG since the Annual General Meeting 2020, i.e. since 18 May 2020. In parallel with his Board assignment Chris Carvalho has an assignment as a consultant and advisor at MTGx Gaming Holding AB, the commencement of this assignment was in February 2019. The consultancy fee paid by MTGx Gaming Holding AB to Chris Carvalho during 2022, was 0,87 mSEK. Gerhard Florin has been a member of the Board of MTG since the Annual General Meeting 2018. He also serves as elected Chairman of InnoGames. InnoGames has paid 0,82 mSEK in Board fees to Gerhard Florin in 2022, the payment from InnoGames is outside the MTG Board fees which were approved at the Annual General Meeting 2022.
The company has three outstanding Long Term Incentive programs, that is the 2019 LTIP which comprise both a performance share plan and warrants, the 2021 LTIP which is a co-investment performance share plan and the 2022 Incentive Plan that has a new simplified incentive structure for variable remuneration covering both the short-term variable remuneration and the long-term share-based remuneration of MTG. For 2020 it was decided by the Board to not put forward any Long Term Incentive program to the AGM 2020 in light of the uncertain financial effects and possible impact from the spread of Covid-19.
The performance measurement period in the performance share plan in 2019 LTIP was one (1) year, i.e. the financial year 2019. The performance targets were evaluated by the Board after year end 2019 and were not met. Consequently, the performance share plan ceased in 2020, and no shares were transferred to the participants at the end of vesting period.
The 2021 LTIP was approved at the Extraordinary General Meeting (the “EGM”) on 21 January 2021. The participants are required to hold shares in MTG equivalent to at least 5 per cent and up to 20 per cent of the gross annual base salary of each participant to participate in LTIP 2021.
For each share held, the participant receives rights to receive class B shares free of charge (the “Share Rights”), which shall vest depending on the fulfilment of pre-determined performance criteria. Vesting is contingent on continued employment.
The Share Rights shall vest free of charge after a three-year period, ending on 31 December 2023 and the number of Share Rights that vest shall be determined based on the annual TSR (i.e., the value increase plus (i) any dividends paid during such period and (ii) the theoretical value of any subscription rights allotted to shareholders in any rights issue) of class B shares at the end of the vesting period (the “TSR”). The TSR shall be determined based on an initial share price equivalent to the VWAP during the period from 1 October 2020 to 31 December 2020, and a final share price equivalent to the VWAP during the period from 1 October 2023 to 31 December 2023.
The number of Share Rights may be recalculated by the Board of directors in the event of rights issues of shares, share splits, reversed share splits or similar events.
A rights issue was approved by the EGM in January 2021. In early 2022 MTG divested ESL Gaming to Savvy Group. MTG intended to return at least 40 percent of the net proceeds from the divestment of ESL Gaming to its shareholders. A share redemption plan was proposed as part of this intention, and the share redemption plan was approved by the AGM in June 2022.
Based on the 2021 rights issue and the 2022 share redemption plan the number of Share Rights were subject to customary recalculation (in addition to the TSR being increased by the theoretical value of the subscription rights).
The 2022 Incentive Plan was approved by the AGM in 2022. The 2022 Incentive Plan has a new simplified incentive structure for variable remuneration, it covers both the short-term variable remuneration and the long-term share-based remuneration of MTG.
The plan provides the participants a possibility to receive variable remuneration partly in the form of cash remuneration, partly in the form of rights to receive class B shares free of charge (the “Share Rights”). In brief, to the extent certain performance conditions are achieved during the financial year 2022, the participants in the 2022 Incentive Plan are allotted a variable remuneration in the beginning of 2023 of which a part will be paid out in cash, and a part will be allotted in the form of Share Rights. Each such Share Right carries a right to receive one (1) MTG Class B share, subject to continued employment at the time of vesting. 50 percent of the share rights vest in 2024 and 50 percent in 2025, in both cases after the publication of the year-end for 2023 and 2024, respectively.
The 2019 warrant plan was directed to the CEO, senior executives and other key employees. Each warrant entitles the holder to, during a period from 15 June 2022 to 15 June 2023, subscribe to one new Class B share at 135 SEK. The participants’ maximum profit is capped. MTG subsidized the participants’ purchase of warrants by granting the participants a cash compensation corresponding to between 25-75 per cent (depending on the participant’s category), net after taxes, of the warrants purchased by the participant. Such subsidy was paid out at the time of purchase of the warrants.
If the participant leaves MTG during the three-year vesting period for the subsidy, MTG may under certain circumstances reclaim the subsidy, in whole or in part in proportion to the term of the vesting period.
Based on the 2021 rights issue which was approved by the EGM in 2021 and the 2022 share redemption plan approved by the AGM in 2022, and in accordance with the terms and conditions for warrants 2019/2022, a recalculation of the subscription price as well as a recalculated number of MTG Class B shares for which each warrant entitles the holder to subscribe shall apply. The rational for the recalculation is to compensate the warrant holders for the shareholders’ right to purchase new MTG Class B shares at a discount 2021 and for the extraordinary cash value transfer to MTG’s shareholders 2022.
The performance measures for the CEO’s variable remuneration have been selected to deliver the company’s strategy which is in the long-term interest of the company. In the selection of performance measures, the strategic objectives and short-term and long-term business priorities for 2022 have been taken into account. The combination of these measures further contributes to the profitability and organic growth in the vertical companies as well as the long-term interests and alignment with sustainability of the company.
MTG has the following outstanding share based long-term incentive programs:
The Annual General Meeting held on 17 May 2023 approved an incentive structure for variable remuneration for approximately 36 key employees in MTG and Innogames covering both the short-term variable remuneration (STI) and the long-term share-based remuneration of MTG.
The 2023 Incentive Plan has the same structure as the 2022 Incentive Plan and provides the participants a possibility to receive variable remuneration partly in the form of cash remuneration, partly in the form of MTG shares. In brief, to the extent certain performance conditions are achieved during the financial year 2023, the participants in the 2023 Incentive Plan are allotted a variable remuneration in the beginning of 2024 of which a part will be paid out in cash, and a part will be allotted in the form of rights to receive MTG Class B shares free-of-charge. Each such share right carries a right to receive one (1) MTG Class B share, subject to continued employment at the time of vesting. 50 percent of the share rights vest in 2025 and 50 percent in 2026, in both cases after the publication of the year-end report for 2024 and 2025, respectively.
More information on the 2023 Incentive Plan (including performance conditions) can be found in item 19 of the notice of the 2023 Annual General Meeting.
The Annual General Meeting held on 8 June 2022 approved a new simplified incentive structure for variable remuneration for approximately 20 key employees in MTG covering both the short-term variable remuneration (STI) and the long-term share-based remuneration of MTG.
The 2022 Incentive Plan provides the participants a possibility to receive variable remuneration partly in the form of cash remuneration, partly in the form of MTG shares. In brief, to the extent certain performance conditions are achieved during the financial year 2022, the participants in the 2022 Incentive Plan are allotted a variable remuneration in the beginning of 2023 of which a part will be paid out in cash, and a part will be allotted in the form of rights to receive MTG Class B shares free-of-charge. Each such share right carries a right to receive one (1) MTG Class B share, subject to continued employment at the time of vesting. 50 percent of the share rights vest in 2024 and 50 percent in 2025, in both cases after the publication of the year-end for 2023 and 2024, respectively.
More information on the 2022 Incentive Plan (including performance conditions) can be found in item 17 of the notice of the 2022 Annual General Meeting.
The extraordinary general meeting on 21 January 2021 approved a long-term incentive plan with approximately 17 participants. The participants are required to hold shares in MTG equivalent to at least 5 per cent and up to 20 per cent of the gross annual base salary of each participant, either shares already held or shares purchased on the market in connection with the notification to participate in LTIP 2021.
For each share held, the participant receives rights to receive class B shares free of charge (the “Share Rights”), which shall vest depending on the fulfilment of pre-determined performance criteria (see below) and the maximum number of Share Rights that may be granted under the LTIP 2021 is 363,331 (prior to any recalculation), representing approximately 0.38 per cent of the outstanding shares and 0.36 per cent of the outstanding votes.
The Share Rights shall vest free of charge after a three-year period, ending on 31 December 2023 and the number of Share Rights that vest shall be determined based on the annual total shareholder return (i.e., the value increase plus (i) any dividends paid during such period and (ii) the theoretical value of any subscription rights allotted to shareholders in any rights issue, including the rights issue resolved on by the board of directors on 17 December 2020) of class B shares at the end of the vesting period (the “TSR”). The TSR shall be determined based on an initial share price equivalent to the VWAP during the period from 1 October 2020 to 31 December 2020, and a final share price equivalent to the VWAP during the period from 1 October 2023 to 31 December 2023 (plus (i) any dividends paid during such period and (ii) the theoretical value of any subscription rights allotted to shareholders in any rights issue, including the rights issue resolved on by the board of directors on 17 December 2020). If the TSR is less than 8 per cent per annum (the “Threshold TSR”) no Share Rights shall vest. If the TSR is equal to the Threshold TSR (i.e., 8 per cent per annum), 25 per cent of the Share Rights shall vest. If the TSR is equivalent to 35 per cent per annum or more (the “Maximum TSR”), 100 per cent of the Share Rights shall vest. If the TSR is between the Threshold TSR and the Maximum TSR, the Share Rights shall vest in a linear proportion.
The 2019 long-term incentive program, approved by the 2019 Annual General meeting, comprised both a performance share plan and warrants.
The targets for the performance share plan 2019 were not met so there are no outcome on the performance share plan.
The warrant plan is directed towards the CEO , senior executives and key personnel. The warrants issued entitle to a maximum of 434,667
Class B shares. Each warrant entitles the holder to, during a period from 15 June 2022 to 15 June 2023, subscribe to one new Class B
share at 115 percent of the average volume-weighted share price during the period 9 May 2019 and 22 May 2019. MTG subsidized the participants’
purchase of warrants by granting the participants a cash compensation corresponding to between 25-75 per cent (depending on the participant’s
category), net after taxes, of the warrants purchased by the participant. Such subsidy will be paid out at the time of purchase of the warrants.
If the participant leaves MTG during the three year vesting period for the subsidy, MTG may under certain circumstances reclaim the subsidy,
in whole or in part in proportion to the term of the vesting period. The participants’ maximum profit are capped at 4.0 times the share price of
SEK 117.24, the average volume-weighted share price during the five last trading days in March 2019.
