Performance criteria and evaluation methods for management board members
For 2020, the performance criteria considered in decision-making for cash bonuses and annual RSU grants include the elements identified in the table below, whereby each of the corporate objectives is further detailed in a clear and measurable way to enable robust evaluation by the nomination and remuneration committee as well as the supervisory board. Our ambition is to establish ourselves as a successful commercial stage biopharmaceutical company focused on the development and commercialization of novel medicines in areas of unmet medical needs to improve the lives of people suffering from serious diseases. In order to achieve this long-term goal, we want to keep innovation in our research efforts while making sound clinical progress year over year and maintaining a healthy cash position. In addition, our corporate development goals aim to foster the growth of the company and the creation of value for all shareholders. Finally, our commercial development goal is intended to bring us closer to becoming a commercially successful biopharmaceutical company which brings novel medicines to market (subject to having obtained governmental approvals), by preparing and executing successful commercial launches of our first product.
Mid 2020, the management board determined that at departmental level some adjustments to the objectives for the impact of COVID-19 would be made; no adjustments were made to the corporate level objectives. The management board therefore adhered strictly to the pre-pandemic objectives for 2020 at corporate level.
In terms of the individual performance evaluation, this is supported by the group’s performance management system that assesses the performance of all employees (including management board members) over the calendar year against a set of objectives determined at the start of the year.
Finally, Galapagos’ policy is to grant a number of subscription rights each year based on a consideration of each management board member’s role, individual performance for the performance year as well as individual impact on long-term value creation.
The nomination and remuneration committee is responsible for evaluating the management board members’ performance in accordance with the principles set out above. The nomination and remuneration committee is composed exclusively of non-executive directors and a majority of its members qualify as independent supervisory board members. This helps prevent the occurrence of conflicts of interest regarding the implementation of the remuneration policy in relation to the management board members. The management board members are not invited to take part in any discussions of the nomination and remuneration committee related to their own individual remuneration.