3.3.22023 Management Board Remuneration
The Supervisory Board is responsible for ensuring that the remuneration policy is appropriately applied and aligned with the Company’s objectives. The remuneration level is determined by the Supervisory Board using a comparison with Dutch and international peer companies, as well as internal pay ratios across the Company.
Reference Group
In order to determine a competitive base salary level and to monitor total remuneration levels of the Management Board, a reference group of relevant companies in the industry (the ‘Reference Group‘) has been defined. Pay levels of the Management Board members are bench-marked to the Reference Group. In the event a position cannot be bench-marked within the Reference Group, the Supervisory Board may benchmark a position to similar companies. For 2023, the Reference Group consisted of:1
In 2023, there were no changes in the base salary of the Management Board members.
Pay ratio
The pay ratio shows the developments in the annual total remuneration of the Management Board members and the average remuneration on a full-time-equivalent basis of employees of the company.2 The average total employee and contractor costs per FTE in 2023 was EUR136 thousand.
The pay ratios of each of the Management Board members over the period of 2019 to 2023 are displayed in the following graph.
Total Remuneration overview
The table below provides insight into the costs for SBM Offshore for Management Board reward in 2023 (based on RP 2022) and presents an overview of the remuneration of the Management Board members who were in office in 2023.
Remuneration of the Management Board
in thousands of EUR | Fixed remuneration | Variable remuneration | ||||||
|---|---|---|---|---|---|---|---|---|
Name of Director, Position | Year | Base salary | Other benefits | STI1 | Value Creation Stake | Pension expense | Total remuneration | Proportion of fixed and variable remuneration |
Bruno Chabas, CEO | 2023 | 960 | 241 | 1,152 | 1,697 | 276 | 4,327 | 34%/66% |
2022 | 960 | 231 | 816 | 1,512 | 297 | 3,815 | 39%/61% | |
2021 | 960 | 250 | 1,279 | 1,797 | 294 | 4,580 | 33%/67% | |
2020 | 960 | 213 | 1,176 | 1,965 | 296 | 6,721 | 22%/78% | |
2019 | 800 | 165 | 916 | 1,372 | 245 | 6,293 | 19%/81% | |
Douglas Wood, CFO | 2023 | 544 | 36 | 490 | 962 | 136 | 2,167 | 33%/67% |
2022 | 537 | 42 | 342 | 850 | 134 | 1,906 | 37%/63% | |
2021 | 518 | 50 | 517 | 968 | 129 | 2,182 | 32%/68% | |
2020 | 518 | 44 | 475 | 1,071 | 129 | 3,293 | 21%/79% | |
2019 | 484 | 41 | 415 | 845 | 121 | 3,422 | 19%/81% | |
Øivind Tangen, COO | 2023 | 518 | 145 | 466 | 916 | 130 | 2,175 | 36%/64% |
2022 | 5582 | 346 | 256 | 695 | 121 | 1,975 | 52%/48% | |
- 1 STI based on accrual accounting, taking into consideration that this reflects the STI to be paid over the performance of that year.
- 2 Including unwinding of rights as employee prior to the Management Board nomination.
1. Base Salary
The 2023 and 2022 base salary levels of the Management Board members are shown in the table above: Remuneration of the Management Board.
2. Short-Term Incentive
RP 2022 indicates that for the STI, the performance areas are Profitability, Growth and Sustainability. As the Company now revolves its strategy around the strategic pillars Environment, Social and Governance, the Supervisory Board deemed it appropriate that the STI performance measures can also be linked to these pillars.
The Supervisory Board set the metrics and the detailed targets (reflected as Threshold/Target/Max) for each of these performance areas at the beginning of the financial year. For each of these targets a scenario analysis takes place to ensure that the targets are suitable, supportive to the strategy and challenging. When conducting scenario analyses and establishing the metrics and detailed targets, the Supervisory Board identifies critical variables and factors that could impact the Company’s performance in the relevant performance areas and could influence pay outcomes. Additionally, regular updates are given on the forecasted target realization throughout the year. These updates are also taken into consideration in the scenario analyses when establishing the targets and detailed metrics at the beginning of the following year.
The following two tables show an overview of the 2023 target realization and the related 2023 STI for the individual Management Board members.
Performance area | Performance indicator | Relative weight | Threshold | Target | Max | Actual performance | Actual in % of target |
|---|---|---|---|---|---|---|---|
Profitability | Underlying directional EBITA (USD mln) | 50% | 1,020 | 1,050 | 1,080 | 1,0751 | 55.4% |
Project Execution performance | Commercially sensitive | Between Threshold and Target | |||||
Growth | Order intake, Energy transition | 30% | Commercially sensitive | Between Target and Max | 36.0% | ||
Sustainability | Safety | 20% | T1 Process Safety Incidents with > 3 in severity score=3 | 1 | 28.3% | ||
Operational Excellence on gas flared | average MMscft/day per unit=1.48 | 1.18 | |||||
Injury frequency rate | TRIFR<0.14 | 0.08 | |||||
SDG contribution | SDG #3, #4; #7; #8; #9, #10; #12; #13; #14 completion 100% | 110% | |||||
Weighted performance on all indicators | 100% | 119.7% | |||||
- 1 Underlying EBITDA reflects the following adjustments: i. impact of the sale of Liza Destiny earlier than planned; ii. implementation costs of an optimization plan related to the Company's support functions; and iii. impact of the delay in commencement of a charter by a client notwithstanding the on-target delivery of the vessel by the Company.
2023 STI Performance
Name of Director | Position | Base salary in EUR | Threshold STI | On Target STI | Maximum STI | Actual Performance in % | Actual Performance in EUR |
|---|---|---|---|---|---|---|---|
Bruno Chabas | CEO | 960,000 | 50.0% | 100% | 150.0% | 120% | 1,152,000 |
Douglas Wood | CFO | 544,000 | 37.5% | 75% | 112.5% | 90% | 489,600 |
Øivind Tangen | COO | 518,000 | 37.5% | 75% | 112.5% | 90% | 466,200 |
3. Value Creation Stake
The Supervisory Board decided to grant the Value Creation Stake for 2024 to the Management Board members in accordance with RP 2022. The underpin test as explained in section 3.3.1 was applied to this grant. As per RP 2022, the granted Value Creation Stake vests immediately. The gross annual value for each of the Management Board members is 175% of base salary. The number of shares was based on the four-year average share price (volume weighted) at the date of the respective grant. The cost of the granted Value Creation Stake is included in the table at the beginning of this section 3.3.2. The number of shares vested under the Value Creation Stake can be found in section 3.3.3 of this remuneration report under Conditions of and information regarding share plans.
4. Shareholding requirement Management Board
The following table contains an overview of shares held in SBM Offshore N.V. by members of the Management Board at December 31, 2023.
Shares held by members of the Management Board
Shares subject to conditional holding requirement | Other shares | Total shares at | Total shares at | |
|---|---|---|---|---|
Bruno Chabas | 330,965 | 987,740 | 1,318,705 | 1,254,864 |
Douglas Wood | 176,470 | 123,716 | 300,186 | 264,009 |
Øivind Tangen1 | 78,250 | 94,854 | 173,104 | 129,792 |
Total | 585,685 | 1,206,310 | 1,791,995 | 1,648,665 |
- 1 Management Board member since April 6, 2022.
All Management Board members met the share ownership requirement, which is set at an equivalent of 350% of their base salary. Section 3.3.3 contains more information about the (historical) share plans for the Management Board.
5. Pensions and benefits
Management Board members received a pension allowance equal to 25% of their base salary. In case these payments are not made to a qualifying pension fund, Management Board members are individually responsible for the contribution received and SBM Offshore withholds wage tax on these amounts. For the CEO, two pension arrangements (defined contribution) are in place and its costs are included in the table at the beginning of this section 3.3.2.
The Management Board members received several allowances in 2023, including a car allowance, a housing allowance as well as school fees. The value of these elements is included in the table in section 3.3.2 under item Other Benefits.