Camurus has four long-term share-based incentive programs active for the company’s employees, two subscription warrant programs and two employee option program. The programs were adopted by the Annual General Meeting in 2020, 2021, 2022 and 2023.
Subscription warrant programs
The warrants are valued by an independent institute in accordance with Black & Scholes model and are acquired by the participants at market value.As part of the program, the participants receive a threepiece stay-on bonus from the company in form of gross salary additions equivalent to the amount paid by the participant for the subscription warrants. The stay-on bonus is conditional on continued employment. costs including social security fee, are based on how much has been arned, and are expensed over the vesting period. Expenses are recognized as personnel cost in the income statement.
Employee option program
The options are granted free of charge and have a term approximately between three and almost four years from the grant date. Once vested, the options can be exercised during the exercise period provided that the participant is still employed.
Each vested option gives the holder the right to acquire one share in Camurus at a pre-defined price corresponding to 125 percent of the volume-weighted average price for the company’s share on Nasdaq Stockholm during the ten trading days immediately following the respective company’s AGM in which the program was approved. ESOP 2021/2024 program comprises a maximum of 1,215,500 employee stock options, ESOP 2022/2026 a maximum of 1,000,000 employee stock options and ESOP 2023/2026 a maximum of 200,000 employee stock options.
The fair value of the service that entitles to the allotment of options through the program is reported as a personnel cost with a corresponding increase in equity. The total amount to be expensed is based on the fair value of the employee stock options granted, including the share target price, and that the employee remains in the company’s service during the exercise period. The total cost is reported over the vesting period.
At the end of each reporting period, the company reconsiders its assessment of how many options are expected to be exercised and the difference is reported in the income statement and a corresponding adjustment is made in equity. As a basis for allocating social security contributions, a revaluation of fair value is continuously made for the employee stock options earned at the end of each reporting period. Social security contributions are reported as personnel costs and the corresponding provision is made under long- or short-term liabilities depending on the remaining term.
For more information about each program see the below table: