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Expert Corporate Governance Service (ECGS)
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Novozymes - AGM 11 March 2021

We note that as a result of the Covid-19 pandemic the AGM will be held as an electronic meeting only. Consequently, it will not be possible to attend the AGM in person.

Under ITEM 3 approval of the Company's first remuneration report is sought. Although we have no (major) concerns  over the payments to the company CEO (Ms. Baiget) in the year under review, we note that company COO Mr. Videbæk will leave Novozymes during 2021. His severance package of DKK 35.0 million (EUR 4.70 million), was fully expensed in 2020 and consisted of annual base salary, pension and bonuses during the notice period (12 months) as well as termination compensation (24 months' salary and pension) and compensation for not being part of the LTIs in 2020 and 2021. We note that this severance package is NOT in accordance with the Danish Recommendations on Corporate Governance as well as our own guidelines.

In view of insufficient independent representation on the board as well as other concerns, we normally would have recommended to vote OPPOSE to the (re-)election of: Mr. Jørgen Buhl Rasmussen (ITEM 6a), Mr. Cees de Jong (ITEM 7a), Mr. Heine Dalsgaard (ITEM 8a), Mr. Kasim Kutay (ITEM 8c) and Mr. Mathias Uhlén (ITEM 8e). However, considering that the proxy card does not permit this, we recommend abstention instead.

Under ITEM 9a the board of directors proposes to re-appoint PricewaterhouseCoopers as the Company’s external auditor. In view of the substantial amount of non-audit fees as well as the current term in office of the external auditor, we normally would have recommended opposition. However, considering that the proxy card does not permit this, we recommend abstention instead.

Under ITEM 10a the board of directors seeks authorisation to issue shares and/or warrants. In aggregate, the authorisation(s) requested are limited to 21% of the Company’s share capital (after the proposed capital reduction under ITEM 10b), whereof 11% with deviation of shareholders’ pre-emptive rights, which exceeds our guidelines. Accordingly, we recommend to vote OPPOSE.

Finally, we note that the decisions of the AGM 2020 were taken without a written vote, and that consequently, the voting results are not disclosed. As a matter of principle, we believe that, as a minimum, the voting results cast in advance could be diclosed. 

Underlying
Novozymes A/S Class B

Novozymes is a biotechnology company based in Denmark. Co.'s business operations are centered on the development of industrial enzymes, microorganisms, and biopharmaceutical ingredients. Co. provides business-to-business biological solutions used in the production of numerous products such as biofuel, detergents, feed, and crops. Co.'s business operations are organized along two segments: the Enzyme Business which is divided into four areas, providing industrial enzymes for household care, food & beverages, bioenergy, and feed & other technical; and the BioBusiness which is home to Co.'s microorganisms and biopharmaceutical ingredients.

Provider
Proxinvest
Proxinvest

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Expert Corporate Governance Service (ECGS)

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