Aperam’s remuneration policy for its non-executive directors is based on a fixed amount; for senior managers it blends long-term and short-term incentives. Aperam’s Board of Directors receives a fixed remuneration approved every year by the annual general meeting of shareholders. Aperam’s senior managers remuneration policy aims to achieve a financially responsible balance between attractive fixed salaries, equity-based incentives and performance-related bonuses.
Aperam’s remuneration philosophy for its senior managers is based on the following principles:
- provide total remuneration competitive with executive remuneration levels of a peer group composed of a selection of industrial companies of a similar size and scope;
- encourage and reward performance that will lead to long-term enhancement of shareholder value;
- promote internal pay equity and provide “market” median (determined by reference to its identified peer group) base pay levels for Aperam’s senior managers with the possibility to move up to the third quartile of the market base pay levels, depending on performance over time; and
- promote internal pay equity and target total direct remuneration (base pay, bonus, and long term incentives) levels for senior managers at the 75th percentile of the market depending on performance over time.
The Remuneration, Nomination and Corporate Governance Committee considers detailed remuneration proposals for senior managers, which are approved by the Board of Directors. Compensation to be paid to the Board of Directors is approved by the Company’s shareholders every year. The Board of Directors approves the remuneration of the individual members of the Company’s Leadersip Team. Such proposals comprise fixed annual salaries, performance-related bonuses and equity-based long-term incentives such as performance share units (PSUs), and other benefits. These annual proposals apply to the Chief Executive Officer (CEO) and the other members of the Leadership Team.
Decisions on short-term and long-term incentive plans may apply to a larger group of employees. The Remuneration, Nomination and Corporate Governance Committee receives updates about the application of these plans on a regular basis.
Fixed Annual Salary
Base salary levels are reviewed annually and compared to the market to ensure that Aperam remains competitive with market median base pay levels.
Performance Bonus Plan
Aperam has a short-term incentive plan consisting of a performance-related bonus plan. Bonus calculations for each employee reflect the performance of the Aperam group as a whole, the performance of the relevant business units, the achievement of objectives specific to the department and the individual employee’s overall performance. The bonus is calculated as a percentage of the individual’s base salary. Different percentage ranges are used depending on the hierarchical level of the individual. Performance-related bonuses are paid only if certain minimum performance thresholds are exceeded by Aperam as a whole and/or the relevant business units.
Equity based incentives
The Restricted Share Unit plan (RSU plan) and the Performance Share Unit plan (PSU plan) are designed to enhance the long-term performance of the company and to retain key employees.
The overall cap on PSUs and other other retention based grants below the LT level available for grants The overall cap on PSUs and other other retention based grants below the LT level available for grants during a given year is approved annually by the shareholders at the annual general meeting.
Please see equity incentive plans for additional details.
In addition to the main compensation elements described above, other benefits may be provided to executives, such as company cars, contributions to pension plans or insurance policies.
The remuneration of individual members of the Board of Directors is published in the company’s annual report. Remuneration of the Leadership Team is disclosed on an aggregated basis.