download PDF - Newron

Compensation,
Shareholdings and Loans
In line with Italian law, the maximum total annual compensation for the members of the
Board is proposed to the shareholders’ meeting by the Company’s management and Board
and approved by decision of the shareholders’ meeting. The proposal for such maximum
total annual compensation was last elaborated by the nomination and compensation committee
of the Company’s Board in 2011, prior to the election of the current Board members
by the shareholders during the shareholders’ meeting. Since then, the maximum total remuneration
for the members of the Newron Board is thousand EUR 220, unchanged from the
previous three-year term. The allocation of all or a part of the maximum total remuner ation
to the individual members is up to the decision by the Board. As per decision of the Company’s
Board, the compensation of the members of the Board since the 2011 shareholders’ meeting
consists of a fixed annual remuneration of currently thousand EUR 20 per capita and an
additional remuneration for members of Board subcommittees of currently thousand EUR 5
per capita and per subcommittee membership. The chairman’s remuneration is thousand
EUR 50. It is the current policy not to pay a variable remuneration to non-executive members
of the Board. For the fiscal year ended December 31, 2011, Luca Benatti has fully waived his
compensation as director. The other members of the Board have waived 10% of their fixed
annual remuneration for a period of 12 months, from July 1, 2010, to June 30, 2011, to support
the Company during its restructuring.
When proposing the maximum total annual compensation for the members of the Board
in 2011, the nomination and compensation committee of the Board did not ask for third-party
support. Instead, the Board proposed to keep unchanged the remuneration from the previous
three-year term, which is deemed to reflect the critical situation of the Company, but still
allow the Company to win internationally experienced senior executive managers from a
variety of disciplines (R&D, marketing, finance, general management) in the pharmaceutical
industry with the competence to execute the duties of the Board as described on page 23,
especially the management of the Company, to the extent it is not delegated to the senior management,
and the control of management in the mid- and long-term interest of the shareholders,
as measured by the development of the market capitalization of the Company. The nomination
and compensation committee is aware that the successful recruitment of qualified Board
members as well as senior managers will depend on an overall remuneration that is competitive
to companies of the same industry and comparable market capitalization. The nomination
and compensation committee has qualified the following companies that are active in drug discovery
and development as peers for such purposes: Santhera Pharmaceuticals, Liestal, CH;
Cosmo Pharmaceuticals, Lainate, I; Evolva, Reinach, CH; MondoBiotech, Stans, CH, and
Paion AG, Aachen, D.
The compensation of the members of the senior management is set and reviewed annually
by the nomination and compensation committee of the Board, in accordance with Newron’s
compensation policies. The review is based on experience of the members of the committee,
publicly available information as well as advice from leading human resources consulting
firms with regards to remuneration packages required to attract internationally experienced
senior executive managers from the biopharmaceutical industry, including information
available on peer companies, as mentioned in the previous paragraph. The nomination and
remuneration committee is required to inform the Board of the decisions taken. The com-
Compensation, Shareholdings and Loans – Newron Annual Report 2011 2 9