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Updates to the Company's New Compensation Policy ahead of ICL's 2022 Annual General Meeting to be held on March 30, 2022.
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1. |
Section 8.1 of the New Compensation Policy regarding equity-based compensation for office holders has been clarified to reflect that any grants of restricted shares will be performance-based only.
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2. |
Section 8.2 of the New Compensation Policy regarding vesting of equity grants has been clarified to reflect that the first portion of any LTI Awards (as defined therein) will be subject to a minimal vesting period of 12 months.
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3. |
Section 10 of the New Compensation Policy has been clarified to reflect that to the extent that equity grants are awarded to board members (excluding the chairman of the board), such equity awards to directors will exclude directors who
are office holders of Israel Corporation Ltd., and the value per annum of such awards will not exceed 50% of the total value of the directors' fixed compensation (including per meeting compensation).
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1. |
General
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1.1. |
This document is designed to detail the compensation policy of ICL Group Ltd. ("ICL" or the "Company") for its Office Holders,
as such term is defined in the Companies Law, 1999 ("Companies Law").
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1.2. |
This policy does not grant any legal rights to ICL's Office Holders. ICL's Office Holders shall be entitled only to the compensation granted to each of them specifically by the HR & Compensation
Committee, the Board of Directors ("Board"), and where required, subject to the approval of the shareholders of the Company. For purposes of this policy, the term "Authorized Organ" shall refer to the
relevant corporate organ or organs stated above, the approval of which is required under the Companies Law for the relevant compensation.
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1.3. |
In the event that an Office Holder shall receive compensation which is less favorable than the compensation described under this policy for an Office Holder in the same position at ICL, this shall not
constitute an exception to this policy.
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1.4. |
For purposes of this policy, “Executive Officers” shall refer to Office holders (as such term is defined in the Companies Law) that have an active executive role with
the Company, including a (full or part time) executive chairman of the Board, and shall not refer to non-executive members of the Board, unless otherwise expressly indicated.
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1.5. |
This policy is written in the masculine form for convenience only and is intended for women and men alike.
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1.6. |
Upon the approval of this policy by the shareholders of the Company, the compensation policy that was in place until such date shall be replaced in its entirety by this amended and restated compensation
policy.
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2. |
Compensation Objectives and Principles
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2.1. |
ICL is a leading global specialty minerals company. ICL Group creates impactful solutions for humanity's sustainability challenges in global food, agriculture, and industrial markets, and leverages its unique
bromine, potash and phosphate resources, its passionate team of talented employees, and its strong focus on R&D and technological innovation to drive growth across its end markets. ICL shares are dually listed on the New York Stock
Exchange and the Tel Aviv Stock Exchange (NYSE and TASE: ICL).
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2.2. |
This policy is intended to enable ICL to attract and retain, on a global basis, highly experienced executives capable of managing vast, complex and global operations, and to motivate them to drive the
Company's long-term goals by structuring a compensation package that maintains the balance between fixed and variable components. As such, the compensation package for Executive Officers will generally have the following characteristics:
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2.2.1. |
compensation elements will be clear and transparent;
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2.2.2. |
components of the compensation package will be aligned with ICL's short-term and long-term goals;
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2.2.3. |
compensation will be structured in ways that aligns Executive Officers' interests with shareholders' interests;
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2.2.4. |
a significant portion of the compensation package will be "at risk" and based on corporate performance as well as individual performance;
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2.2.5. |
equity-based compensation will be subject to a vesting period of over at least three (3) years.
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2.3. |
In addition to the characteristics above, the compensation will be structured so as to ensure balanced and effective risk management by encouraging excellent performance without promoting excessive
risk-taking deviating from the framework outlined by the Board. ICL believes that the following factors may help to discourage inappropriate risk-taking:
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2.3.1. |
a balanced mix of compensation components: fixed component, short-term variable component and long-term variable component;
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2.3.2. |
The compensation goals should reflect a mix of quantitative and qualitative performance measures;
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2.3.3. |
setting caps on the variable compensation components;
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2.3.4. |
determining claw-back provisions with respect to variable compensation.
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3. |
Compensation Components
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Base Salary
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Social and other benefits
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Annual Cash Bonus (Short term Incentive or STI)
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Equity-based compensation (Long-Term Incentive or LTI)
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Retirement and Termination arrangements
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4. |
Ratio between Fixed and Variable Components
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Office Holders
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Fixed Component
(Base Salary)
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Variable Components
(Bonuses & LTI)
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CEO1
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15% - 60%
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40% - 85%
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Executive Chairman1
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0% – 40%
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60% - 100%
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Executive Officers
(other than Executive Chairman, CEO)
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20% - 60%
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40% - 80%
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Board Members
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50% - 100%
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0% - 50%
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1
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The minimal ratio of 15% or 0% fixed component out of the overall compensation, and respectively, the maximum ratio of 85% or
100% variable component out of the overall compensation, represents a situation whereby the Executive Chairman or the CEO, as the case may be, reach their maximum caps of entitlement to the variable components (Bonuses & LTI) in a
given year or whereby the Executive Chairman does not receive a Fixed Component and reaches his maximum caps of entitlement to the Variable Components in a given year.
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5. |
Internal Company Comparison
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Position
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Ratio to average of other employees' Overall Compensation
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Ratio to median of other employees' Overall Compensation
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CEO
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Approx. 11.4 times
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Approx. 19.8 times
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Executive Officers (other than CEO)
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Approx. 5.4 times
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Approx. 6.9 times
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6. |
Fixed Compensation
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6.1. |
Base Salary
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Executive Officer's educational background, qualifications, skills, specializations, prior professional and business experience, past performance and achievements;
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Executive Officer's position and scope of responsibility;
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Executive Officer's previous compensation agreements;
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Comparable compensation agreements within ICL;
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Comparable positions in other local and/or global companies as relevant and if applicable to the position.
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the position of the relevant Executive Officer;
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scope of responsibility;
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relevant Executive Officer's achievements;
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professional and business experience of the Executive Officer;
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previous salary agreements signed with the relevant Executive Officer;
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salary levels for comparable positions within ICL;
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size of the company and nature of its operations
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ICL's macroeconomic environment; and
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comparative relevant market analysis
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6.2. |
The maximum annual base salary for Executive Officers shall not exceed the following amounts:3
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6.2.1. |
Executive Chairman – | $803,000 |
6.2.2. |
CEO – | $978,000 |
6.2.3. | Other Executive Officers – |
$575,000
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6.3. |
Sign-on Bonus
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3 |
The Israeli Shekels (ILS) cap amounts remain unchanged compared to the previous compensation policy. CAPS in USD denominated amounts have been adjusted to reflect an appreciation of 15% of USD/ILS exchange
rate from January 2019 through the date of the approval of the new compensation policy by the board of directors.
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6.4. |
Social and Other Benefits
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Annual vacation as customary;
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Annual sick leave as customary;
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Company contributions to pension funds and disability and life insurance policies;
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Company contributions to educational funds or other savings vehicles;
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Additional benefits may include, inter alia, the following benefits ("Additional Benefits"):
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Providing a Company car or a car allowance;
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Providing communication packages, including telephone, and computers with internet access;
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Subscriptions to relevant literature;
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Life insurance;
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Health insurance;
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Relocation and housing allowances;
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Courses and trainings;
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Professional association membership fees (lawyers bar, accountants bar, etc.);
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Financial/Tax planning in case of relocation.
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7. |
Annual Cash Bonus
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7.1. |
ICL's Executive Officers may be entitled to an annual compensation in accordance with the short-term incentive plan (the "STI Plan" or "STI").
The STI Plan is aimed to create an alignment between the compensation of the Executive Officers and the Company's annual and long-term goals while focusing, among other things, on individual goals that will be defined for each of the
Executive Officers. The STI Plan may include rules for eligibility in cases the Executive Officer serves for only part of the relevant year. STI Plans payouts to Executive Officers, excluding the CEO and the Executive Chairman, may be
calculated by using measurable financial metrics and/or measurable non-financial metrics, as pre-determined or pre-approved by the HR & Compensation Committee and the Board, and\or a qualitative evaluation. It is clarified that, the HR
& Compensation Committee and Board of Directors may determine in any given year, that the STI payout for Executive Officers, other than the CEO and Executive Chairman, in whole or in part, will be granted according to a qualitative
evaluation of non-measurable items of the said organs, subject to the maximum payouts set forth in Section 7.4 below.
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7.2. |
Annual STI for the CEO
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7.2.1. |
Measurable Financial and measurable non-financial goals
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Performance level
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Payout factor
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Below 60% of budget (threshold)
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0
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Between 60% - 90% of budget
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0.6
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Between 90% - 120% of budget
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0.9 – 1.2 (linear and continuous)
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Above 120%
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1.5
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Performance level
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Payout factor
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Threshold
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0
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Partial
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0.6
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Good
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0.8
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Excellent
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1.0
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7.2.2. |
Qualitative evaluation of the CEO overall performance
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7.2.3. |
If either ICL operating income and/or net income actual performance (as adjusted according to paragraph 7.6 below) will not meet the threshold performance level (60% of budget), there will be no payout under
this plan for the 80% of STI that is measured against measurable financial and measurable non-financial goals.
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7.2.4. |
The maximum STI payout for the CEO cannot exceed for any given year, the lower of 130% of the CEO's target STI for such year or $1,500,000.
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7.2.5. |
In case the CEO’s employment terminates prior to the end of the fiscal year, the HR & Compensation Committee and the board of directors may approve prorated STI payout for the CEO after the end year
results are published. The prorated calculation will reduce the CEO’s Target STI relatively to his employment period during the fiscal year.
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7.3. |
Annual STI for ICL Executive Chairman of the Board ("CoB")
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7.3.1. |
If ICL Operating income and/or Net income (as adjusted according to paragraph 7.6 below) will not meet the threshold performance level (60% of budget), there will be no payout for the CoB under this plan.
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7.3.2. |
The maximum STI payout for the CoB shall not exceed, for any given fiscal year the lower of 150% of the CoB target STI or $1,000,000.
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7.4. |
The maximum STI payout for Executive Officers, other than the CEO and Executive Chairman, shall not exceed, for any given fiscal year, the lower of 225% of the Executive Officer target STI for such year or
$1,000,000.
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7.5. |
Discretion of the Board to Reduce Bonus - The Board shall have the discretion to reduce the amount of the STI Payout of an Executive Officer in any given year, based on circumstances determined by the Board.
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7.6. |
The Measurable Financial Goals for purposes of calculating the CEO and the Executive CoB's STI, for any given year, will be calculated according to the figures from ICL's annual reports and will be adjusted
by applying the following adjustments4:
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Mergers, acquisitions, restructuring or divestments ("M&A") of entities, businesses or assets, including adjustment of the capital gain or loss; accounting impact
of such M&A and any related costs.
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Changes in the company's applicable GAAP or new/revised accounting standards, that were not considered for purposes of determining the annual budget.
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Income or expense from legal claims or tax impacts, that are not related to the current year, including tax assessments, that were not considered for purposes of determining the annual budget.
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Environmental undertakings, that were not considered for purposes of determining the annual budget.
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Income or loss resulting from updates to provisions (that are included in the last annual financial statements) due to changes in the underlying assumptions relating to: regulations, interest or exchange
rates, that were not considered for purposes of determining the annual budget.
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Income or loss resulting from impairment of assets, that were not considered for purposes of determining the annual budget.
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7.7. |
Compensation Recovery ("Claw-Back")
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7.8. |
Special Bonus
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8. |
Equity-Based Compensation
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8.1. |
Long term incentives may be granted in the form of stock options,
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8.2. |
Each LTI Award shall be subject to a minimum vesting period over at least three (3) years, with a minimal vesting period of 12 months for the first
portion of the LTI awards, and subject to the continuing service of the Executive Officer. Unless otherwise approved by the relevant authorized organs, vesting of outstanding long‐term LTI Awards may be pro‐rated for time and/or
performance for departing Executive Officers. The terms of LTI Awards may include provisions for acceleration of vesting in certain events and corporate transactions, such as in the event of a merger, a consolidation, and an acquisition
of the Company or of its assets or certain retirement provisions (as these terms will be defined in the applicable LTI compensation plan). Acceleration of LTI Awards will be allowed only in certain circumstances determined by the
applicable authorized organs.
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8.3. |
The exercise price of any stock option will be no less than the average 30 trading days of ICL’s last known as adjusted to dividend share price during the period prior to the date of Board's approval/grant
date, as applicable. The exercise price may be linked to the Israeli consumer price index. The exercise price may include an adjustment to dividend, to the extent distributed by the Company, and an adjustment to additional events in the
Company's share capital, such as: distribution of bonus shares, rights issuance, consolidation or split of share capital, etc.
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8.4. |
The exercise period of the options shall be of no more than ten (10) full years from the date of grant.
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8.5. |
The total potential dilution from outstanding and proposed LTI plans will not exceed 10 percent. The restrictions described in paragraph 8.5 will not be applicable in case of grant of LTI Awards-based
compensation to management and employees of a target company, in the event of a merger or acquisition of the target company.
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8.6. |
LTI Awards granted to an Executive Officer, will not exceed in value (based on accepted valuation methods), on the date of grant, per one (1) vesting annum, the following amounts:5
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Executive Chairman of the Board – $1,380,0006
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CEO – $1,725,000
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Other Executive Officers – $1,150,000
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5 |
The Israeli Shekels (ILS) cap amounts remain unchanged compared to the previous compensation policy. CAPS in USD denominated amounts have been adjusted to reflect an appreciation of 15% of USD/ILS exchange
rate from January 2019 through the date of the approval of the new compensation policy by the board of directors
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6 |
$1,380,000 is maximum value for an Executive CoB that does not receive base salary. The maximum value for an Executive CoB that does receive base salary is $1,150,000.
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8.7. |
The HR & Compensation committee and the Board may resolve in the future to introduce shareholding guidelines to Executive Officers, according to which, Executive Officers will be required to hold a
minimum number or value of shares, not inclusive of unvested holdings in unvested LTI Awards.
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9. |
Retirement arrangements
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9.1 |
All of the Executive Officers may be entitled to release of funds accumulated in their favor and in their name in designated compensation funds for pension benefits and severance pay. To certain Executive
Officers, additional funds may be paid, if and when there is a difference between the funds that were actually accumulated in the designated funds and the amount that equals their last base monthly salary upon termination multiplied by the
number of years of seniority accumulated in the Company.
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9.2 |
Advance Notice
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Executive Officer
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Advance Notice Period
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Executive Chairman, CEO
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Up to 12 months
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Other Executive Officers
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Up to 6 months
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9.3 |
Adjustment Period and non-compete obligations
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9.4 |
Termination Grant
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9.5 |
Termination Grant upon Change of Control
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9.6 |
Acceleration of LTI Awards
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9.7 |
The aggregate amounts paid to Executive Officers pursuant to Sections 9.2 to 9.4, shall not exceed an amount equal to 12 months base salary, except for a few
existing Executive Officers or employees that will be appointed as Executive Officers, that according to previous commitments of the company to them, are entitled to severance pay in amounts that together with their other termination
benefits exceed the aforementioned maximum.
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10. |
Compensation of Members of the Board
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7 |
In this regards it should be clarified, that termination of a Director's term and renewal for an additional term will not be regarded as termination of service.
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11. |
Management Fee
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12. |
Exculpation, Indemnification and Insurance
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ICL Group Ltd.
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By:
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/s/ Aviram Lahav
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Name:
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Aviram Lahav
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Title:
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Chief Financial Officer
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ICL Group Ltd.
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By:
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/s/ Aya Landman
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Name:
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Aya Landman
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Title:
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VP, Company Secretary & Global Compliance
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