3 years ago

Annual Report 2012

Annual Report 2012

GROUPNote 8 - Other

GROUPNote 8 - Other specifications to the income statement(USD '000)Employee benefits expenseFigures in USD '000 2012 2011Included in ship operating expenses:Wages and salaries, seafarers 43 679 43 703Social security costs, seafarers 1 116 835Total 44 795 44 538Included in General and administrative expenses:Wages and salaries 12 191 13 569Social security costs 1 175 1 298Pension costs (Note 13) 790 523Share incentive programme - 446Total 14 156 15 836At 31 December 2012, the Company had 79 permanent employees onshore (2011: 87) and 1,250 crewmembers employed on its vessels or on leave (2011: 1,340).Remuneration2012 2011Chief Executive OfficerRemuneration 598 775Pension 18 106Bonus - -Executive ManagementRemuneration 1 188 2 018Pension 91 164Bonus - -Total compensation paid to the CEO and Executive Management1 895 3 063Board of Directors 283 306Total remuneration 2 179 3 370The members of the Board of Directors and Executive Management have no loans or guarantees from theCompany. Refer to note 2 in parent company for remuneration to Executive Management.Compensation to the BoardThe compensation to the Board is determined on a yearly basis by the Company in its Annual General Meeting.Refer to note 2 in parent company for further information.In addition to the Board of Directors remuneration, Chairman of the board Aage Rasmus Bjelland Figenschouwas engaged by the Company as a consultant and received payment of USD 25 thousand and USD 98 thousandfor services provided in 2011 and 2012 respectively. Former Chairman of the Board Bjørn J. Sjaastad, was alsoengaged by the Company as a consultant and received payment of USD 131 thousand and USD 211 thousandin 2011 and 2012 respectively.Benefits upon termination of employmentExecutive management have termination compensation built into their contracts of employment.Compensation varies between 3 to 9 months for members of executive management. Executive managementcurrently consist of five people.36

GROUPBonus agreementThe Company has established a discretionary bonus scheme for key employees which is based on anevaluation of the Company’s and the employee’s performance.Employee share option programSenior management participates in a share-based incentive program, where the employees are granted shareoptions. The program does not provide the choice of cash settlement instead of shares. The fair value of theshares and options are measured at the grant date and is recognised in the income statement under Generaland Administrative expenses over the vesting period.Eitzen Chemical has used the Black & Scholes option pricing model based on the exercise price. The totalnumber of shares to be issued under the share option program is limited up to a maximum of 18,854,446shares.2012 2011WeightedWeightedNumber ofNumber ofaverageaverageshare optionsshare optionsexercise priceexercise price(NOK)(NOK)At the beginning of the year 11 280 000 2.31 16 020 000 2.31Granted during the year - - - -Forfeited during the year -3 240 000 2.31 -4 740 000 2.31Exercised during the year - - - -Outstanding at the end of the year 8 040 000 2.31 11 280 000 2.31Exercisable at the end of the year 8 040 000 2.31 7 520 000 2.19Each share option gives the right to acquire one share. The strike price was NOK 1.90 per share on the date ofthe award, increasing by ten per cent per annum. The strike price was calculated based on the average shareprice of Eitzen Chemical from the summons to the Extraordinary General Meeting on 5 November 2009 andthe Extraordinary General Meeting held on 26 November 2009. On 5 February 2013 the Company held anextraordinary general meeting whereby a reverse share split in the ratio 100:1 was approved. The number ofnumber of share options currently exercisable is 80,400 and the weighted average exercise price is NOK 231.Refer to note 23 for further information.Allotted share options can be exercised over a period of five years. One third of the allotted share options canbe exercised twelve months after the date of allotment, one third can be exercised 24 months after the date ofallotment and one third can be exercised 36 months after the date of allotment. Options that are vested shallbe valid and can be declared for a period of 60 months from the award date.Remuneration to the auditors (ex VAT)Figures in USD '000 2012 2011Statutory audit 429 435Other assurance services 3 20Tax assistance 98 33Other non-assurance services 3 3Attestation services 25 6Total 556 49737

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