Pexip : Remuneration Report 2023

Remuneration Report

Pexip ASA 2023

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Background

Under Section 6-16 b of the Public Limited Liability Companies Act, Pexip Holding ASA ("Pexip" or "The Company") is required to present an annual report that provides an overview of the remuneration to the Board of Directors and Senior Executives covered by the guidelines defined in Section 6-16 a. This report meets the requirements set out in the Regulations on guidelines for and reporting of remuneration of executive personnel, and it also meets the requirements of notes to the annual accounts in Section 7-31b and 7-32 of the Norwegian Accounting Act.

Purpose

The Company's Remuneration Policy adopted at the Annual General Meeting (AGM) in May 2021, and updated and approved at the AGM in April 2022 and April 2023, provides the framework for the remuneration of the Board of Directors (the Board) in 2023. This describes in more detail our corporate governance process in relation to the Remuneration Policy. The policy is available on Pexip.com, in the Corporate Governance section.

The Remuneration Policy has been introduced to comply with the regulatory framework. The Policy is a continuation of the previous remuneration principles to ensure that:

• The policy is formulated in a clear and understandable way and contributes to the Company's business strategy, long-term interests, and economic viability.
• The policy contains comprehensible, exhaustive, and complete criteria for receiving variable remuneration in the form of bonuses, remuneration, services, etc.
• The remuneration policy explains how the pay and employment conditions of employees of the Company were considered when establishing the remuneration policy.
• The remuneration report will be reported on an annual basis to comply with these guidelines.
• The policy contains comprehensible, exhaustive, and complete criteria for receiving variable remuneration.
• Remuneration is compared regularly to benchmarks of general industry companies and European Software as a service company.

Overall Company Performance

In 2023 Pexip has delivered a significant transformation resulting in a return to growth and going from a clear negative cash flow to being an EBITDA profitable, cash-flow positive company. The company has doubled down on its key target markets in Connected Spaces and Secure & Custom video meetings. Increased technology differentiation as well as the addition of a major new strategic partnership with HP|Poly has enabled the company to improve its ARR growth throughout 2023 and we exit the year with a much better momentum than it entered 2023 with.

The company set three financial goals for 2023; deliver a flat to positive development in annual recurring revenues, deliver EBITDA of NOK 100-150 million and a NOK 40-60 million free cash flow. All three targets were reached, with an annual recurring revenue growth of 3% overall, and 7% excluding legacy areas, a NOK 113 million EBITDA excluding other gains and losses and a free cash flow of NOK 105 million.

Key Developments in Board Remuneration

At the AGM on April 20, 2023, several changes were made to the board. The number of board members decreased from seven to five. The Chair of the board in addition to three board members stepped down. The former Vice chair of the Board was elected Chair of the board. Two existing board members were re-elected, and two new board members were elected to represent the interests of the shareholders in the best possible manner.

Pexip's nomination committee performs an annual review of the remuneration to the Board. The base remuneration for the Chair of the Board and the Board members has been unchanged in the period, approved on the AGM on April 20, 2023. The remuneration for the Audit Committee was decided at the AGM in April 2023.

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The remuneration of the Chair of the Board amounted to NOK 461,300 for his role as Chair of the Board and former Vice chair of the Board for the calendar year of 2023.

The remuneration for the Board and the Board Committees was approved by the AGM in April 2023.

Key Developments in Executive Management Remuneration

At the end of 2020, the Board sought external expert advice on benchmarking the remuneration of the Senior Executives in the Company, and to give advice on the design on a long-term compensation model both for Senior Executives and other employees. This exercise benchmarked the remuneration to relevant peers, laying the foundation for the adjustments made in January 2021. It also led to changes in the long-term incentive model considering that Pexip is a listed company and the industry it operates in, which are reflected in Pexip's Remuneration Policy. The initial LTI grant was implemented in May 2022, with an additional grant of LTIs in August 2023.

For Senior Executives excluding the CEO, fixed remuneration decreased 13% to NOK 10.33 million (NOK 11.84 million), while total variable remuneration increased 15% to NOK 6.60 million (NOK 5.7 million) as a result of decreasing the size of the management team.

For the CEO, his fixed remuneration was NOK 4.0 million, and his variable remuneration was NOK 3.5 million. For the period he served in 2022 (April 20, 2022 to December 31, 2022), his fixed remuneration was NOK 2.3 million, and his variable remuneration was NOK 1.2 million.

Feedback from shareholders

The AGM approved the remuneration guidelines for senior executives, as well as the remuneration to the Board without significant input or comments. The remuneration of the Board is based on the Remuneration Policy adopted by the AGM. The policy is available on Pexip.com, in the Corporate Governance section.

Remuneration of the Board of Directors

Policy

The remuneration of the Board is based on the Remuneration Policy adopted by the AGM. The policy is available on Pexip.com, in the Corporate Governance section.

In 2023, the Board remuneration did not deviate from the Remuneration Policy.

Composition of Remuneration to the Board

The remuneration of the Board consists of the Base fee and the Board Committee fee. In addition, the Company has a Directors liability insurance policy with a reputable insurer.

Table 1 - Remuneration composition

Remuneration	Board of Directors
Directors' fee	Yes
Board committee fee	Yes
Variable remuneration	-
Pension	-
Expenses	-
Other benefits	-
Severance pay	-

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Directors' fee

For the Chair of the Board, the base fee level for the period of April 20, 2023 up to the annual general meeting in 2024 was the same as the previous period at NOK 600 000, adopted at the annual general meeting in 2023.

For other Board members, the base level fee for the period April 21 up to the annual general meeting in 2024 was the same as the previous period at NOK 350 000, adopted at the annual general meeting in 2023.

Board committee fee:

The fee level for the additional responsibility of serving in Board committees is determined retrospectively by the Nomination Committee. For the period up to the Annual General Meeting on April 21, 2023, the head of the audit committee received remuneration of NOK 100,000 and the members of the audit committee received remuneration of NOK 50,000.

Social security tax

In 2023 social security taxes were paid based on rates set by the local authorities and in line with the policy.

Table 2 - Board and committee fee levels 2023 (Amounts in NOK 1,000).

	Board	Audit Committee	Nomination Committee
	(NOK)	(NOK)	(NOK)
Chair	600	100	50
Member	350	50	25

Table 3 below includes the total remuneration of each board member in 2023. The total remuneration for each board member supports the focus of the Board on corporate strategy and are contributing to the long-term interest of the Company.

Table 3 - Actual remuneration of the Board

Below is a specification of remuneration to the board of directors for year 2022 and 2023 (Amounts in NOK 1,000).

Name		Fixed base	Fixed base fee 2022	Fixed base	Fixed base fee
Position	fee 2022	paid in 20231)	fee 2023	2023 paid in 20242)
Kjell Skappel3)	Chair of the Board	322,1	87,5	461,3	150
Irene Kristiansen	Board member	322,1	87,5	350	87,5
Phillip Austern	Board member	154,8	87,5	350	87,5
Geir Langfeldt Olsen	Board member	0	0	155,7	87,5
Silvija Seres	Board member	0	0	155,7	87,5
Michel Sagen4)	Former Chair of	544,2	150	333	0
	the board
Per HaugKogstad5)	Former Board	322,1	87,5	194,2	0
	member

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Name		Fixed base	Fixed base fee 2022	Fixed base	Fixed base fee
Position	fee 2022	paid in 20231)	fee 2023	2023 paid in 20242)
Marianne Wergeland Jenssen5)	Former Board	322,1	87,5	194,2	0
	member
Asta Ellingsen Stenhagen5)	Former Board	154,8	87,5	194,2	0
	member

1. Remuneration for the period Oct to Dec 22 were paid in Jan 23.
2. Remuneration for the period Oct to Dec 23 were paid in Jan 24.
3. Kjell Skappel's position as a Vice chair of the Board ended at the annual general meeting in April 2023, where he was elected Chair of the Board, taking over from Michel Sagen.
4. Michel Sagen's position as Chair of the Board ended at the annual general meeting in April 2023. Kjell Skappel was elected to take over the position. Michel was also a consultant for the company. Allowance related to work performed as a consultant was NOK 655 thousand for the year 2022 (60% position from Jan to May and 20 % position from June to Sept). The consultant agreement ended in full on the 30th of Sept 2022.
5. Per Kogstad Haug, Marianne Wergeland Jenssen and Asta Ellingsen Stenhagen's positions as Borad members ended at the annual general meeting in April 2023. Remuneration paid for the period Jan to Apr 2023.

Table 4 - Actual remuneration of the committees

Below is a specification of remuneration to the audit and nomination committee for year 2022 and 2023. (Amounts in NOK 1,000.)

		Fixed base	Fixed base
Name	Position	fee 20221)	fee 20232)
Irene Kristiansen	Chair of the Audit committee	125	100
Kjell Skappel3)	Former Audit committee member	50	0
Michel Sagen4)	Former Audit committee member	50	50
Marianne Wergeland Jenssen5)	Former Audit committee member	0	50
Geir Langfeldt Olsen	Audit committee member	0	0
Dag Kaada	Chair of the Nomination committee	50	50
Aril Resen	Nomination Committee member	25	25
Oddvar Fosse	Nomination Committee member	25	25

1. Fixed base fee paid in 2022 relates to year 2021.
2. Fixed base fee paid in 2023 relates to year 2022. The remuneration for year 2023 paid in 2024 will be settled on the annual general meeting in April 2024.
3. Kjell Skappel's position as an audit committee member ended in 2021. Marianne Wergeland Jenssen was selected to take over the position from year 2022.
4. Michel Sagen's position as an audit committee member ended in 2022. Geir Langfeldt Olsen was selected to take over the position from year 2023.
5. Marianne Wergeland Jenssen's position as an audit committee member ended in 2022.

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Table 5 - Shareholdings by the board 2023

As of December 31, 2023, the board held shares in Pexip themselves or through companies controlled by them. The Board does not receive any share-based compensation.

Name	Position	At the end of 2023
Kjell Skappel	Chair of the Board1)	10,341,505

Irene Kristiansen

Board member

150,000

Phillip Austern

Board member

100,000

Geir Langfeldt Olsen

Board member

978,312

Silvija Seres

Board member

0

Michel Sagen

Former Chair of the Board2)

1,413,064

Per Haug Kogstad

Former Board member

4,059,775

Marianne Wergeland Jenssen

Former Board member3)

3,000

Asta Ellingsen Stenhagen	Former Board member3)	0

1. Kjell Skappel's position as a Vice chair of the Board ended at the annual general meeting in April 2023, where he was elected Chair of the Board taking over from Michel Sagen.
2. Michel Sagen's position as Chair of the Board ended at the annual general meeting in April 2023. Kjell Skappel was elected to take over the position.
3. Kjell Kogstad Haug, Marianne Wergeland Jenssen and Asta Ellingsen Stenhagen's positions as Borad members ended at the annual general meeting in April 2023.

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Remuneration of the Executive Management Team

Policy

The remuneration of the Executive management team is based on the Remuneration Policy adopted by the AGM. The policy is available on Pexip.com, in the Corporate Governance section.

The executive management remuneration did not deviate from the Remuneration Guidelines.

Remuneration composition

Remuneration for executives comprises a base salary, a pension contribution, a variable short-term incentive, variable long-term incentives, and other benefits. In addition, the Company has a Directors liability insurance policy with a reputable insurer.

Table 6 - Remuneration composition

Remuneration	Executive Management
Fixed salary	Yes
Short-term incentives	Yes
Long-term Share based incentives	Yes
Pension	Yes
Expenses	Yes
Other benefits	Yes
Severance pay	-
Short-term incentives based on share value	-

Fixed salary

The fixed salary shall be the main element in the cash-based remuneration and is decided based on the nature of the position, as well as the qualifications and experience of the executive holding it. The fixed salary is assessed annually, both benchmarking the compensation to similar roles in peer companies as well as overall wage growth.

Short-term incentives

The Company firmly believes that performance-based variable cash salaries for the Senior Executives have a motivational effect and that their implementation is beneficial for the Company and its shareholders to reach the Company's business strategy, long-term interests, and sustainable business practices.

Roles that have the highest direct impact on the Company's short-term performance, such as the Chief Executive Officer and the Chief Revenue Officer, have a higher share of short-term incentives to their overall compensation than the other Senior Executive roles. For the CEO, the on-targetshort-term variable performance-based salary is 47% of base salary and 26-55% for other executives.

The variable cash salaries are aligned with long-term targets. For 2023, Pexip had defined a set of long-term targets on Annual Recurring Revenue and Operating Expenses, which form the basis for the annual business plan and forms the basis of the variable performance-based salary for Senior Executives as follows:

• Growth in Annual Recurring Revenue, where achieving zero growth yields 0% achievement and achieving the annual target yields 100% achievement.

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• Development in Operating Expenses including capitalized R&D, where spend of 130% of plan yields 0% achievement, and spending according to the annual target yields 100% achievement

For both elements, under- and over-performance were rewarded on a linear scale. The plan was capped upwards at 200% of the plan. The Board can adjust targets during the year as well as introduce additional KPIs should it deem it necessary due to changes in market conditions or company performance.

For 2023, Pexip has defined the variable performance-based salary for Senior Executives as follows:

• Annual Recurring Revenue, where achieving 85% of target achievement yields 0% and achieving 100% of the annual target yields 100% achievement.
• Development in Operating Expenses including capitalized R&D, where spend of 115% of plan yields 0% achievement, and spend of 100% of plan yields 100% achievement.

Both elements are capped upwards at 200% of the plan.

The Company may demand variable cash salary refunded to the same extent it may demand fixed cash salary refunded following the expiry of the employment, typically in the event of erroneous payments or breach of contractual obligations.

Long-termshare-based incentives

The purpose of the long-termshare-based incentives (SBI) is to support the alignment between the executive management and shareholder interest and ensure the retention of key talent in Pexip.

The SBI has two parts:

• Part one of the SBI provides a cash amount to eligible executives, who must invest the net amount after tax in Pexip shares within one month after the grant and retain the shares for a minimum of 3 years. After the lock-up, executives are free to keep or sell the shares at their discretion. The conditions for the cash amount are equal to the variable performance-based salary.
• Part two of the SBI is based on share options. The share options will have a strike equal to the volume- weighted average of the past seven days before the award.

A share option SBI was granted in May 2022 with vesting in December 2024. A further share option SBI was granted in August 2023 with vesting of one third in December 2024, December 2025 and December 2026.

Pension

Pexip has a pension scheme according to local standards for all employees, also covering the Executive Management Team. In Norway, which is the location of Pexip's HQ, Pexip has a pension contribution of 5% of base salary between 1 to 12 G ("G" or grunnbeløpet is the public pension base rate adjusted annually).

Expenses:

In 2023 executive management received reimbursement for reasonable documented expenses related to travel, business expenses, broadband and electronic communication.

Other benefits

In 2023 executive management received other benefits like life and accident insurance, phone etc. in line with the remuneration policy.

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Table 7 - Actual remuneration of Executive management

Below is a specification of remuneration to the Executive management for year 2022 and 2023 (amounts in NOK 1,000). Remuneration is paid by the entity the Executive is employed by, which is Pexip France SAS for Ian Mortimer and Pexip AS for the other Executives.

		Fixed			Variable
Name of	Reported	Base	Total fixed	Pension	Short	Other	Severance	Long	Total	Total	Short term	Long term
Senior	financial	salary	remuneration		term	remuneration	pay	term cash	variable	remuneration	incentives	incentives
Executive and	year				incentives			incentives	remuneration		accrued	accrued
position								for share			2023 paid	2023 paid
								purchase6)			2024	2024
	2023	4,030	4,030	71	2,102	348	-	1,005	3,526	7,556	497	468
Trond	(53%)	(47%)
Johannessen
CEO1)	2022	2,228	2,228	45	434	223	-	488	1,190	3,418	788	-
	(65%)	(35%)
	2023	2,629	2,629	70	892	170	-	423	1,555	4,183	273	156
Øystein Hem	(63%)	(37%)
CFO
	2022	2,461	2,461	63	452	125	-	456	1,096	3,557	153	-
	(69%)	(31%)
Ingrid	2023	1,432	1,432	67	366	56	-	423	883	2,315	104	156
(62%)	(38%)
Woodhouse
CPO			1,320						750
	2022	1,320	60	180	54	-	456	2,070	66	-
	(64%)	(36%)
	2023	1,972	1,972	71	887	373	-	423	1,744	3,716	273	156
Åsmund	(53%)	(47%)
Fodstad
CRO2)	2022	1,785	1,785	63	562	315	-	456	1,396	3,181	137	-
	(56%)	(44%)
	2023	1,421	1,421	67	293	67	-	423	850	2,271	91	156
	(66%)	(37%)
Patricia Auseth
CMO3)			1,293						639
	2022	1,293	60	155	36	-	388	1,932	56	-
	(67%)	(33%)
	2023	1,555	1,555	62	384	78	-	267	792	2,347	117	99
	(66%)	(34%)
Ian Mortimer
CTO4)			1,281						440
	2022	1,281	51	128	57	-	203	1,720	64	-
	(74%)	(26%)
Helge Hansen	2023	1,322	1,322	65	335	89	-	282	771	2,094	104	104
SVP Strategy5)	(63%)	(37%)
	2022	1,195	1,195	55	187	36	-	-	278	1,473	53
	(81%)	(19%)

1. Trond Johannessen entered the position as CEO with effective date April 20, 2022.
2. Åsmund Fodstad changed role from President Global Sales & Marketing to CRO on February 1, 2022.
3. Patricia Auseth changed role from SVP Purpose and Development to CMO on February 1, 2022.
4. Ian Mortimer changed role from Software engineer to CTO on July 1, 2022.
5. Helge Hansen changed role from Vice President Strategy to SVP Strategy on November 7, 2022.
6. Long term incentive for share purchase was paid for all four quarters in 2022. In 2023 it was paid for Q1-Q3 only, the part relating to Q4 will be paid in 2024, see Long term incentives accrued 2023 paid 2024.

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Table 8 - Long term incentive programmes/Options by Executive management

Below is a specification of long-term incentive programmes for the Executive management. (Amounts in NOK 1,000)

Name of Senior	Long term	Strike	Grant date	Vesting date	Number	Fair value per	Total fair	Terminated/	Number of	Strike price
Executive and	incentive	price			of shares	share at	value at	Cancelled	exercised	exercised
position	programmes	(NOK)			preliminary	grant date1)	launch	2023	options/RSUs	options/RSUs
					allocated	(NOK)	(NOK)		2023	2023
					at year-end
					2023
Trond	Pexip LTI plan				90 000	4.7027	423 243
Johannessen	17.28	May 2022	December 2024	90 000	5.0125	451 125	-	-	-
2022
CEO				90 000	4.7027	423 243
	Pexip LTI plan			December 2024	133 333	5.6097	747 959
	19.75	August 2023	December 2025	133 333	7.1275	950 328
	2023
			December 2026	133 334	8.3443	1 112 578
	Pexip 2020			April 2022	17 500	39.754	695 695
	32	April 2020	April 2023	17 500	40.2847	704 983	-	-	-
	program
			April 2024	17 500	41.1654	720 395
Øystein Hem	Pexip 2018	25	September 2018	September 2022	7 500	9.2884	69 663	-	-	-
CFO	program
	Pexip LTI plan				66 667	4.7028	313 520
	17.28	May 2022	December 2024	66 667	4.7028	313 520	-
	2022
				66 666	5.0125	334 163
	Management	38	May 2019	May 2023	0	7.3218	219 657	30 000
	IPO program
	Pexip LTI plan			December 2024	53 333	5.6097	299 183
	19.75	August 2023	December 2025	53 333	7.1275	380 130
	2023
			December 2026	53 334	8.3443	445 035
	Pexip 2020			April 2022	6 875	39.754	273 309
Ingrid	32	April 2020	April 2023	6 875	40.2847	276 958	-	-	-
program
Woodhouse			April 2024	6 875	41.1654	283 012
CPO	Pexip 2018	25	November 2018	November 2022	7 500	5.7781	43 336	-	-	-
	program
	Pexip LTI plan	17.28	May 2022	December 2024	40 000	4.7027	188 111	-	-	-
	2022				40 000	5.0125	200 500
					40 000	4.7027	188 111
	Pexip LTI plan	19.75	August 2023	December 2024	40 000	5.6097	224 388
	2023			December 2025	40 000	7.1275	285 099
				December 2026	40 000	8.3443	333 772
	Pexip LTI plan				53 333	4.7027	250 813
	17.28	May 2022	December 2024	53 333	4.7027	250 813	-	-	-
Åsmund	2022
			53 334	5.0125	267 336
Fodstad
CRO	Management	38	May 2019	May 2023	0	7.3218	219 657	30 000	-	-
	IPO program
	Pexip LTI plan			December 2024	53 333	5.6097	299 183
	19.75	August 2023	December 2025	53 333	7.1275	380 130
	2023
			December 2026	53 334	8.3443	445 035
	Pexip 2020			November 2022	3 000	12.3778	37 133
	85	November 2020	November 2023	6 000	13.7798	82 679	-	-	-
	program
Patricia Auseth			November 2024	6 000	15.8138	94 882
CMO	Pexip LTI plan				40 000	4.7027	188 111
	17.28	May 2022	December 2024	40 000	5.0125	200 500	-	-	-
	2022
				40 000	4.7027	188 111
	Pexip LTI plan			December 2024	40 000	5 6097	224 388
	19.75	August 2023	December 2025	40 000	7.1275	285 099
	2023
			December 2026	40 000	8.3443	333 772
	Pexip 2019			October 2021	2 000	7.0833	32 852
	32	October 2019	October 2022	4 000	8.2130	14 166	-	-	-
	program
			October 2023	4 000	9.2057	36 823
Ian Mortimer
Pexip LTI plan	17.28	May 2022	December 2024	40 000	4.7027	188 111		-	-
CTO
	2022				40 000	5.0125	235 138
					40 000	4.7027	200 500
	Pexip LTI plan	19.75	August 2023	December 2024	53 333	5.6097	299 183
	2023			December 2025	53 333	7.1275	380 130
				December 2026	53 334	8.3443	445 035
	RSU plan	-	January 2022	February	3 900	36.68	143 052	-	-	-
				2025