Employee Retention and Incentive Plan

The Annual General Meeting of Kaupthing ehf. was held on 30 August 2016. Shareholders or shareholders’ representatives that hold 88.12% of Kaupthing ehf.’s share capital attended the meeting. The proposal for a Remuneration Policy to the Annual General meeting was approved as presented by 91% of votes cast at the meeting.

Kaupthing ehf. has received a number of media enquiries and, in response to those, makes the following points:

What is Kaupthing ehf.?

  • Kaupthing ehf. is an asset holding company operating under Icelandic law. It is not a bank or financial services company.
  • Kaupthing ehf. is not subject to winding-up or bankruptcy proceedings, following a composition with its creditors in 2015.
  • Approximately 93% of Kaupthing ehf.’s shareholders are foreign parties.
  • Kaupthing ehf.’s main purpose is to liquidate the remainder of its asset portfolio and return the resulting funds to its shareholders.
  • The assets of Kaupthing ehf. (apart from the stake in Arion Bank) are predominantly foreign, e.g. cash in foreign currency, loans or equity stakes in foreign entities and claims against foreign counterparties. Kaupthing does not own or collect any Icelandic mortgages or housing debt.
  • Kaupthing ehf. does not control the operations of Arion Bank. Arion Bank has a separate executive management team which reports to its own board of directors which must be independent of Kaupthing and which are appointed by an independent holding company. The separation of governance and control of Kaupthing ehf. and Arion Bank reflects the requirements of the FME and has been in place since 2009.

What is the retention and incentive plan?

  • The goal of the incentive plan is to
        a) maximize the value of Kaupthing ehf.’s assets in the most efficient manner for the benefit of its shareholders;
        b) retain valuable employees for as long as needed; and
        c) to motivate employees to work efficiently towards the termination of their jobs.
  • The incentive plan covers all employees of Kaupthing ehf., except for the Chief Executive Officer and the Senior Managing Director. The total number of employees that are eligible under the plan is more than 30.
  • Total payments under the plan can range from zero up to GBP 9.3 million (equivalent to ISK 1.5 billion).
  • The maximum amount of GBP 9.3 million is equal to 0.3% of the value of Kaupthing ehf.’s assets.