Former Hydrogenpro CEO with 1 Million Earnings – E24

Former Hydrogenpro CEO with 1 Million Earnings - E24

The controversial options package in the professional community gives Walter Qvam millions of kroner in profits.

Walter Qawam. The photo is from 2015, when he was chairman of the Kongsberg Group.

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E24 previously reported how Walter Qvam resigned this fall as Hydrogenpro’s board chairman with a controversial options package.

Qvam has now exercised 170,713 stock options related to Hydrogenpro, according to Message From the company on Wednesday night.

Options are given to Qvam as part of the company’s incentive scheme, i.e. a reward for important people associated with the company.

It is not known whether the gain was realized because it was not mentioned in the notification whether the underlying shares had been sold. The company is under no obligation to report this, as Qvam has resigned as Chairman of the Board of Directors and is therefore no longer a primary insider.

However, it is common for the person exercising the options to sell the underlying shares in order to profit from them.

The price of each exercise option is 7 NOK. Hydrogenpro shares closed at NOK 20.3 on Wednesday on the Oslo Stock Exchange.

Given that Qvam sold around the closing price on Wednesday, it collected nearly NOK 2.3 million in a net profit.

Qvam previously said it did not see any problematic aspects in giving options to the board of directors.

– At the stage I entered the company and was in it, we don’t see any problems with it. This is a company in the start-up stage, Qvam said in October.

E24 requested comment from Qvam on this matter, but did not receive a response on Wednesday night.

It had to be corrected

Hydrogenpro corrected the 2020 annual report after questions about the options afforded to Qvam.

The changes mean that Qvam can now cash in options, even though he has resigned from the board of directors and no longer has anything to do with the company.

According to the original wording of the clauses, Qvam was not allowed to take advantage of the options after he resigned as Chairman of the Board.

The annual report from April stated that one must be associated with the company in order to be able to exercise the “exercise” options.

Unfortunately, a wrong English word was used here. Qawwam said the correct word should be “merit,” not “exercise.”

This was later changed to just that profits (“Eligibility”) Options requires affiliation with the Company.

The new CEO will have several options

Ellen Hanetho was appointed as the new chairman of the board in October. According to the announcement on Wednesday, it will take over options that Qvam was unable to earn (“unvested”).

Hanetho has transferred a total of 337,170 stock options from Qvam. The exercise price for these shares was set at the closing price on the day she was appointed as Chairman, which was NOK 17.24 per share.

The vesting period of these options is three years with expiration after four years.

Hanetho already had just over 1.8 million options related to the Hydrogenpro stake, according to an overview provided by the company this summer.

When asked if she sees any problematic aspects in giving options to the palette, Hanetho answers that it’s not black and white, but depends on the situation.

– I have confidence in shareholder ratings as expressed through the general meeting, Hanetho said in October.

Hydrogenpro’s board of directors gave the options to itself, with shareholder approval.

protest Folketrygdfondet

The exercise price for most options is 7 NOK. These were introduced before the company went public.

But not all owners agreed that the board should be allowed to give itself more options, at an exercise price of NOK 26.15, which corresponds to the price of the Hydrogenpro in early summer.

Folketriggfondet Then they voted against That Hydrogenpro must pass through the scheme at the general meeting.

“It is Folketrygdfondet’s principled view that options should not be issued to members of the board of directors,” the justification stated.

Folketrygdfondet refers in justification to the recommendations made by The Norwegian Committee on Corporate Governance (NUES), which believes that such schemes could weaken the independence of the Board of Directors.

Associate Professor Ivar Braglen at the Norwegian School of Management (NHH) conducted a research on incentives in companies.

He believes there is no final decision on how to compensate the board, but said he understands that minority shareholders may be skeptical about giving board members options.

Sometimes it looks like you’re using options to hide payments, Braglin said.

Braglin spoke in general terms and confirmed that he was not aware of the situation on Hydrogenpro.

Hydrogenpro’s Board of Directors decided, on Wednesday, to increase its share capital by issuing 221,864 new shares, in connection with Qvam’s exercise of options. The decision is based on the approval granted by the majority of the company’s shareholders at the general meeting in May.

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