Annual Report 2011 - PGS
Annual Report 2011 - PGS Annual Report 2011 - PGS
Notes to the consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2011, 1,114,782 share options related to the 2006 program expired. No share options expired during the years ended December 31, 2010 and 2009. The table below details the Company’s assumptions used to calculate estimated fair value at grant date: Options outstanding December 31, 2011 Average exercise price Estimated fair value at grant date (average NOK/USD per share option) Dividend Volatility Weighted Grant date Risk free rate yield factor average life 2006 (a) --- NOK 111.50 3.92-4.00% --- 45% 3.5 years NOK 44.10/$7.12 2007 (a) 165,000 NOK 141.05 5.02-5.22% --- 43% 3.5 years NOK 55.20/$8.87 2008 2,434,666 NOK 132.91 4.56-5.75% --- 46% 2.5 years NOK 35.55/$6.77 2009 1,617,425 NOK 40.30 2.28% --- 55% 2.4 years NOK 13.25/$2.08 2010 1,538,500 NOK 78.31 2.30-2.45% --- 60% 3.5 years NOK 28.24/$4.57 2011 1,482,000 NOK 77.19 2.61-2.76% --- 60% 3.5 years NOK 30.35/$5.63 Total 7,237,591 (a) Exercise price is adjusted for special dividend of NOK 10 per share distributed in July 2007. Expected volatility for all grants is based on historical volatility of the Company’s shares after emerging from Chapter 11 in November 2003. As a result of unusual high volatility during the international financial distress 2008 to 2009, the Company has estimated volatility for the 2009, 2010 and 2011 grants in order to reflect the expected volatility going forward. There are no traded options of the Company’s shares and there are no post vesting restrictions included in the option plan. Note 34 - Salaries and Other Personnel Costs, Number of Employees, and Remuneration to the Board of Directors, Executive Officers and Auditors Salary and social expenses that are included in cost of sales, research and development costs and selling, general and administrative costs, excluding such costs relating to discontinued operations (see Note 4) consist of: Years ended December 31, (In thousands of dollars) 2011 2010 2009 Salaries and bonuses 257,994 247,940 247,092 Social security 20,864 21,834 17,935 Pension 7,805 14,544 12,805 Other benefits 31,323 25,523 25,103 Total 317,986 309,841 302,935 The Company had an average of 2,149, 2,090 and 2,192 employees during the years ended December 31, 2011, 2010 and 2009, respectively (excluding Onshore employees). 43 PGS ANNUAL REPORT 2011 114 PGS Annual Report 2011
Notes to the consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Chief Executive Officer (CEO) and Other Executive Officers In 2011, the Company paid compensation to its President and CEO and other executive officers as follows: Total compensation paid in 2011 (a) Name Position Fixed salary Bonus (b) Other benefits (c) Total paid salary and compensation (in dollars) Benefits paid to pension plan (d) Accrued target bonus at December 31, 2011 Jon Erik Reinhardsen President and Chief Executive Officer 899,553 2,041,528 38,535 2,979,616 59,802 448,138 Gottfred Langseth Executive Vice President and Chief Financial Officer 591,409 319,091 41,417 951,917 67,210 194,503 Guillaume Cambois Executive Vice President, Data Processing & Technology 541,172 218,992 191,194 951,358 43,222 177,540 Magne Reiersgard Executive Vice President, Operations, 563,742 272,500 217,556 1,053,798 79,060 172,125 Per Arild Reksnes Executive Vice President, Marine Contract 559,960 251,841 29,182 840,983 106,704 177,540 Sverre Strandenes Executive Vice President, MultiClient 565,247 291,259 283,781 1,140,287 108,736 177,540 (a) Amounts in NOK have been translated to US Dollars using average exchange rate for 2011 of NOK/USD 5.562. (b) Includes payments for the 2010 performance bonus plan (paid in April 2011) and the CEO deferred compensation (see below). (c) Includes items such as car allowance, telephone, internet and other minor benefits. In addition taxable gain on exercised share options. (d) Contribution to defined benefit plans and defined contribution plans (Norway). Share options held by the CEO and executive officers at December 31, 2011 were as follows: Average exercise price on Average exercise price on Weighted Options average Options Options exercised outstanding at Options Options Options at remaining December granted forfeited exercised options expired December options contractual Name 31, 2010 2011 2011 2011 (NOK) 2011 31, 2011 (NOK) term Jon Erik Reinhardsen 375,000 75,000 --- --- --- --- 450,000 83.70 2.60 Gottfred Langseth 315,000 45,000 --- --- --- 90,000 270,000 83.70 2.60 Guillaume Cambois 130,000 45,000 --- 20,000 (a) 40.29 --- 155,000 88.97 3.00 Magne Reiersgard 204,999 45,000 --- 20,000(b) 40.29 39,999 190,000 87.33 2.80 Per Arild Reksnes 184,999 45,000 --- --- --- 39,999 190,000 87.33 2.80 Sverre Strandenes 275,001 45,000 --- 30,000(c) 40.29 50,001 240,000 89.12 2.60 (a) $152,369 was reported as taxable income as a consequence of the exercise of share options (b) $161,050 was reported as taxable income as a consequence of the exercise of share options (c) $245,008 was reported as taxable income as a consequence of the exercise of share options PGS ANNUAL REPORT 2011 44 PGS Annual Report 2011 115
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Notes to the consolidated financial statements<br />
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br />
For the year ended December 31, <strong>2011</strong>, 1,114,782 share options related to the 2006 program expired. No share options expired<br />
during the years ended December 31, 2010 and 2009.<br />
The table below details the Company’s assumptions used to calculate estimated fair value at grant date:<br />
Options<br />
outstanding<br />
December<br />
31, <strong>2011</strong><br />
Average<br />
exercise<br />
price<br />
Estimated fair<br />
value at<br />
grant date<br />
(average<br />
NOK/USD per<br />
share option)<br />
Dividend Volatility Weighted<br />
Grant date<br />
Risk free rate yield factor average life<br />
2006 (a) --- NOK 111.50 3.92-4.00% --- 45% 3.5 years NOK 44.10/$7.12<br />
2007 (a) 165,000 NOK 141.05 5.02-5.22% --- 43% 3.5 years NOK 55.20/$8.87<br />
2008 2,434,666 NOK 132.91 4.56-5.75% --- 46% 2.5 years NOK 35.55/$6.77<br />
2009 1,617,425 NOK 40.30 2.28% --- 55% 2.4 years NOK 13.25/$2.08<br />
2010 1,538,500 NOK 78.31 2.30-2.45% --- 60% 3.5 years NOK 28.24/$4.57<br />
<strong>2011</strong> 1,482,000 NOK 77.19 2.61-2.76% --- 60% 3.5 years NOK 30.35/$5.63<br />
Total 7,237,591<br />
(a) Exercise price is adjusted for special dividend of NOK 10 per share distributed in July 2007.<br />
Expected volatility for all grants is based on historical volatility of the Company’s shares after emerging from Chapter 11 in<br />
November 2003. As a result of unusual high volatility during the international financial distress 2008 to 2009, the Company has<br />
estimated volatility for the 2009, 2010 and <strong>2011</strong> grants in order to reflect the expected volatility going forward.<br />
There are no traded options of the Company’s shares and there are no post vesting restrictions included in the option plan.<br />
Note 34 - Salaries and Other Personnel Costs, Number of Employees, and Remuneration to<br />
the Board of Directors, Executive Officers and Auditors<br />
Salary and social expenses that are included in cost of sales, research and development costs and selling, general and<br />
administrative costs, excluding such costs relating to discontinued operations (see Note 4) consist of:<br />
Years ended December 31,<br />
(In thousands of dollars) <strong>2011</strong> 2010 2009<br />
Salaries and bonuses 257,994 247,940 247,092<br />
Social security 20,864 21,834 17,935<br />
Pension 7,805 14,544 12,805<br />
Other benefits 31,323 25,523 25,103<br />
Total 317,986 309,841 302,935<br />
The Company had an average of 2,149, 2,090 and 2,192 employees during the years ended December 31, <strong>2011</strong>, 2010 and<br />
2009, respectively (excluding Onshore employees).<br />
43 <strong>PGS</strong> ANNUAL REPORT <strong>2011</strong><br />
114 <strong>PGS</strong> <strong>Annual</strong> <strong>Report</strong> <strong>2011</strong>
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