Total remuneration

Fixed remuneration

The supervisory board, for the CEO upon recommendation of the nomination and remuneration committee and for the other management board members upon proposals of the CEO, decided that for the financial year 2020 each management board member received the base salary (gross amount) as identified in the total remuneration table above. The fixed remuneration is a base salary designed to fit responsibilities, relevant experience and competences, in line with market rates for equivalent positions.

Variable remuneration

Galapagos’ policy is to grant a number of long-term incentives based on the individual performance for the performance year while also considering individual impact on long-term value creation. Bonuses consist both of a short-term cash component and a long-term RSU component. Management board members were also offered subscription rights in 2020.

Under our remuneration policy, the CEO’s cash bonus can be maximum 75% of the fixed part of his annual remuneration of the year for which the bonus is awarded. The aggregate cash bonuses of the other members of the management board can be maximum 50% of the total amount of the fixed part of their aggregate annual remuneration of the year for which the bonus is awarded. An equivalent number of RSUs will be granted to the CEO and the other members of the management board under the RSU Annual Long-Term Incentive Plan.

(a) Short-term variable remuneration

The supervisory board determined an overall achievement of 60% (out of a maximum of 100%) against the 2020 corporate objectives. Factors reducing the achievement included actual cash burn being higher than our expected internal goal, as a result of not achieving milestones in the U.S. after Gilead's receipt of the CRL from the FDA for RA, and overall delay in program timelines due to COVID-19.

Mid 2020, the management board determined that at departmental level some adjustments to the objectives for the impact of COVID-19 would be made, however no adjustments were made to the corporate level objectives. The management board therefore adhered strictly to the pre-pandemic objectives for 2020 at the corporate level.

Taking into account 2020 company performance more broadly, the supervisory board determined that a 30% funding level, rather than the 60% achieved, would be appropriate for the management board. The supervisory board, for the CEO upon recommendation of the nomination and remuneration committee and for the other management board members upon proposals of the CEO, considered this level of funding together with individual performance of management board members in order to determine the individual cash bonus outcomes for 2020 set out in the total remuneration table above: Mr. Onno van de Stolpe (€140,400; 22.50% of 2020 base salary), Mr. Bart Filius (€67,206; 15.93% of 2020 base salary), Dr. Andre Hoekema (€58,440; 15.84% of 2020 base salary), Dr. Piet Wigerinck (€55,518; 13.35% of 2020 base salary), Dr. Walid Abi-Saab (€55,518; 13.35% of 2020 base salary) and Mr. Michele Manto (€55,518; 17.08% of 2020 base salary). These 2020 bonuses will be paid in April 2021, and an equivalent number of RSUs will be granted under the 2021 RSU Annual Long-Term Incentive Plan as long-term variable remuneration.

(b) Long-term variable remuneration

In 2020 the management board members were offered new subscription rights under Subscription Right Plan 2020 and each accepted all subscription rights granted as per the following: Mr. Onno van de Stolpe: 85,000 subscription rights, Mr. Bart Filius: 50,000 subscription rights, each of Dr. Piet Wigerinck and Dr. Walid Abi-Saab: 40,000 subscription rights and each of Dr. Andre Hoekema and Mr. Michele Manto: 30,000 subscription rights. Further reference is made to the Equity components of the remuneration, which contains, among others, a description of the 2020 grant of subscription rights.

The total remuneration table above sets forth the value of the number of RSUs vested and paid out in 2020 for each management board member. Each RSU represents the right to receive, at Galapagos’ discretion, one Galapagos share or a payment in cash of an amount equivalent to the volume-weighted average price of the Galapagos share on Euronext Brussels over the 30-calendar day period preceding the relevant vesting date.

As part of the management board’s long-term variable remuneration, a number of RSUs equivalent to the 2020 short-term cash bonuses (based on the average share price of the Galapagos share on Euronext Amsterdam during the month of April 2021) will be granted under the 2021 RSU Annual Long-Term Incentive Plan.

For a description of the RSU grants to the management board members in 2020, reference is made to the Equity components of the remuneration. This section also sets out the main characteristics of the different RSU plans issued by Galapagos to its management board members in 2019 and 2020.

The 50% deferred part of the bonus awarded and relating to the financial year 2017 was entirely forfeited and not paid out in 2020 as a result of the share performance of Galapagos NV’s share over the period 2017 – 2020 relative to the Next Biotech Index (which tracks Euronext-listed biotech companies) as per the provisions of the Senior Management Bonus Scheme.

Pension and other components

In addition, the management board members enjoy a number of benefits such as a retirement plan, insurance programs (covering life insurance, disability, travel insurance and health), company cars and the provision of tax advisory services. The aforementioned retirement plan is set up as a defined contribution arrangement and is in line with market practice in Belgium. The pension and other components of the remuneration of each management board member are summarized in the total remuneration table above.