The initial Remuneration Policy for the members of the Board of Directors was approved by a decision of the Annual Ordinary General Meeting of the shareholders of “Kiriacoulis Mediterranean Cruises Shipping SA”. (hereinafter the “Company”) dated July 29, 2019 and published according to the law. According to the above Remuneration Policy approved by the Ordinary General Meeting of the year 2019, the executive members of the Board of Directors (Chairman of the Board / Chief Executive Officer and Vice Chairman of the Board) who are also shareholders of the Company, do not receive any remuneration for their participation in the Board of Directors, the general management of the Company as its legal representatives and its business policy design, given that it was judged that the dividends they receive as shareholders of the Company from its profits are a sufficient reward for the services they provide to the Company from their position as executive members of the Board.
The Remuneration Policy has been drafted in accordance with the European Union Directive on Shareholders’ Rights, which was incorporated into Greek law by Law 4548/2018. The Remuneration Policy applies to the remuneration of all members of the Board of Directors (hereinafter” BoD”). The Policy defines in detail, on the one hand (i) the existing rights of the BoD members and the obligations of the Company to them and on the other hand (ii) the conditions, based on which remuneration will be provided, in the future, to existing and / or new members of the BoD during its validity. The Remuneration Policy takes into account the European best practices for listed companies and at the same time reflects the existing agreements regarding the remuneration of the members of the BoD. In addition, the Remuneration Policy takes into account the provisions of the Company’s Articles of Association, the Corporate Governance Code adopted by the Company, as well as the Internal Rule Book of the Company. The Remuneration Policy is available on the Company’s website www.kiriacoulis.com.
The competent Managements of the Company came to the present Remuneration Policy, which was suggested to the BoD and then the BoD approved it, by its decision at its Meeting of 15 July 2020. During the discussion of the salary of a member of the BoD, this member was not present at the discussion. After being approved by the Board of Directors, the Policy is submitted for approval to the Annual General Meeting of the Company’s Shareholders. The competent Managements of the Company will regularly examine whether the Policy is still in line with the Company’s business strategy or whether amendments to the Policy should be suggested to the BoD. Every four years (or earlier in case there is a need for modification), upon the recommendation of the relevant Directorates of the Company, the BoD will submit the new Policy to the Shareholders for approval, taking into account the applicable provisions of the law as well as the relevant decisions of the BoD, the Hellenic Capital Market Commission and / or other supervisory authorities.
Basic Forming Factors
The key factors of the internal and external environment of the Company that shape the Remuneration Policy for the members of the BoD are the following:
- Liquidity. Cash resources saved by management expenses enhance the Company’s working capital, improving liquidity.
- The strengthening of the share in the markets in which the Company is already active and the entry into new markets. Money savings from management costs can be used to increase disposal costs, which are the key means of achieving this strategic goal.
- The percentage of free dispersion of the Company’s shares. Due to the relatively low percentage of free distribution of its shares, it is estimated that the Company is more properly represented when the persons who are its legal representatives are executives and are majority shareholders.
- The existence of alternative forms of return of benefits to the members of the BoD. Based on the current composition of the BoD, two executive members are shareholders of the majority of the Company and receive dividends when the Company has profits and decides their disposal to shareholders. Furthermore, in case of purchase of own shares or issue of new shares that will result from capitalization of retained earnings or distributors of reserves or difference from the issuance of equity shares, the Company will consider offering free shares to the independent non-executive members of the BoD by the procedure mentioned below.
- Taxation. The existing Greek legislation governing the taxation the employees’ earnings, has created the paradox that human employment costs dearly for a domestic company, while at the same time the after-tax benefit of employment is small.
- The financial situation of the regions-markets of the Company. Uncertainty created by the indefinite – in size and time – effects that events disrupt the economies of the countries from which the Company derives its customers (such as the departure of one or more Member States of an economic association, the trade wars of financial superpowers, pandemics, etc.), makes it imperative to implement a policy of containment of the total operating expenses of the Company and, at the same time, continuous review of their composition.
Existing Rights and Remuneration of Board Members
The Company, on an annual basis, evaluates the accounting and forecasting course of the aforementioned factors. Taking into account the results of the last evaluation, the Company formulated the content of this Policy.
The non-executive members of the BoD do not receive any remuneration for the service of their duties arising from their participation in the BoD.
The executive members of the BoD, when they are also shareholders of the Company and they have not been contracted with the Company with an employment contract, will receive a lump sum remuneration of up to 50,000 euros per year in case of non-payment of dividend by the Company, as well as the difference in case the amount of dividends paid corresponding to each executive member of the BoD is less than the amount of fifty thousand euros (50,000), for the performance of their duties arising from their executive capacity (which requires the commitment of significant time on their part in addition to the time of their participation in the meetings of the BoD) and as legal representatives of the Company through the positions of the Chairman of the BoD, the Chief Executive Officer and / or the Vice Chairman of the BoD This fee will be paid to the above members until the end of each fiscal year and after the Ordinary General Meeting of the shareholders of each year will have legally decided on the distribution or not of a dividend from the profits of the previous fiscal year. It is noted that in case the number of dividends paid corresponding to each executive member of the BoD separately is greater than 50.000 euros, then no fee will be paid to these members. The Company may reimburse business expenses of a reasonable amount borne by the members of the BoD in the performance of their duties. The above expenses include indicative and not restrictive: travel and accommodation expenses, which are reimbursed according to the respective policy of the Company, attendance of training programs and purchase of relevant professional training material according to the respective policy of the Company so that the member of the BoD to be aware of any related issues. Also, the Company may cover insurance costs of the members of the BoD to a public or private insurance company and to conclude insurance contracts with insurance companies to cover risks to which the members of the BoD are exposed. Finally, the Company may allow the use of privately owned and / or leased cars by members of the BoD, as well as to provide to the members of the BoD mobile devices and their connection to a mobile service provider.
Conditions for the provision of remuneration in the future to existing and / or new non-executive members of the BoD who are not affiliated with the Company under an employment contract.
With this remuneration policy is established the possibility of a share option scheme to the non-executive members of the BoD not affiliated with the Company under an employment contract according with the Article 32 of Law 4548/2018 as in force and the specific terms of the program of free distribution of shares to the members of the BoD are the following:
With a quorum of 100% and a unanimous decision of the BoD of the Company a program of distribution of shares to the independent non-executive members of the Board of Directors may be established in the form of an option (acquisition) of shares, according to the terms of this decision, a summary of which is made public. The total nominal value of shares made available under this paragraph, may not exceed overall 1/10 of the capital paid up at the dated of the decision of the BoD. The decision of the BoD shall state whether, in order to satisfy the option, the company shall increase its share capital or use shares which are acquired or have been acquired in accordance with Article 49 of Law 4548/2018 as in force.
In all events, the decision of the BoD must state the maximum number of shares which may be acquired or issued if the beneficiaries exercise the above right, the price or method of its determination, the terms of offering of the shares to the beneficiaries or their categories without prejudice to Article 35 (2) of Law 4548/2018, as in force, the duration of the program, and any other relevant conditions. The BoD also determines the beneficiaries, the manner of exercising the right and any other term of the share offering scheme. In accordance with the terms of the scheme , the BoD shall provide beneficiaries who exercised their option with share option certificates and every calendar quarter at the most shall deliver the shares which have been issued or shall issue and deliver shares to the above beneficiaries by increase the Company’s capital and amending the Articles of Association accordingly, It also certifies the increase in capital and adheres to publication requirements. The decision of the BoD on the capital increase and confirming its payment shall be taken every calendar quarter by way of derogation to the provisions of Article 20 of Law 4548/2018. Article 26 of Law 4548/2018, shall not apply to capital increases.
This remuneration policy is valid for four (4) years from its approval by the General Meeting. The remuneration policy is submitted to the General Assembly for approval whenever there is a substantial change in the conditions under which the approved remuneration policy was drafted and, in each case, every four (4) years from its approval. In case of revision of the remuneration policy, the relevant report of the BoD must describe and explain all changes in remuneration policy. The relevant decision of the General Meeting of Shareholders must describe the manner in which the votes and views of the shareholders on the policy and reports were taken into account, from the last vote on the remuneration policy at the general meeting of shareholders onwards.
The BoD may in exceptional circumstances apply a derogation from the provisions of this Policy for the remuneration of the members of the BoD, if this is necessary for the long-term service of the interests of the Company or to ensure its viability. The derogation should be decided by the BoD of the Company with a quorum and a majority of 100% of its members, to be accompanied by a special justification and will be valid until the next Ordinary General Meeting of the shareholders. In this case, information on any derogation from the application of the Remuneration Policy with an explanation of the exceptional nature of the circumstances and the indication of the specific elements of the Policy against which the derogation occurred is included in the Remuneration Report in accordance with Article 112 (2) ( g) of Law 4548/2018.
During the approval of this Policy, the Company reserves the right to comply with any contractual obligations already undertaken with the members of the BoD, before the date of entry into force of this Policy. Details of such payments (based on pre-existing contractual commitments) will be presented in the Remuneration Report as they arise.