Annual Report 2011 - PGS

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Notes to the consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS mobile phone, internet and similar benefits. The fixed elements also include a pension plan. The CEO and three executive officers have an early retirement plan allowing for termination of employment when the CEO or the executive officers reach the age of 62. Provided that the CEO or executive officers have been employed as a CEO or an executive officer for 10 years (or in some cases longer) the CEO or the executive officers are entitled to up to 60% of the last base salary in the period up until the CEO or the executive officers reach the age of 67. The variable elements today consist of a performance bonus scheme and participation in our share option program. Participation in the performance bonus scheme and the target levels and the maximum levels of the annual performance bonus scheme are determined annually. Achievement under the performance bonus scheme is based partly on achievements of agreed financial key performance indicators (“KPIs”) for the group and a relevant management group, and partly on achievements of agreed operational, financial and organizational KPIs included in a personal performance contract. The Group KPIs are financial targets set by the Board of Directors at the start of a fiscal year. The Group KPIs are thereafter broken down to business unit KPIs. The personal performance contract for our CEO and other executive officers will contain such KPI goals as well as KPI goals linked to other measures of success such as HSE, operational effectiveness and organizational development. The CEO and other executive officers have target bonus levels and maximum bonus levels. The CEO and other executive officers will for 2011 be obliged to use one third of their annual bonus (net after withholding tax) to purchase shares in the Company and retain them for 3 years. The annual performance bonus for the CEO is approved by the Board of Directors in a meeting, based on recommendations from the Remuneration and Corporate Governance Committee. The annual performance bonus scheme for the other executive officers are reviewed and approved by the Remuneration and Corporate Governance Committee on the CEO’s recommendation, and the executive officers achievements under the scheme are also reviewed by the Remuneration and Corporate Governance Committee. The Board of Directors will continue to use this scheme for determining the level of annual performance bonus in the coming fiscal year. The Annual General Meetings in 2006, 2008, 2009, 2010 and 2011 authorized the implementation of certain share option programs. The Board of Directors will this year discontinue the implementation of new share option programs. The Board of Directors still considers it important to continue with long term incentives which are linked to the development of the Company’s share price. Therefore, the Board of Directors will propose to the 2012 Annual General Meeting a Restricted Share Plan whereby each eligible employee will be granted a number of shares in the Company in 2012. Vesting of these shares and subsequent transfer to the eligible employee will take place three years later subject principally to further employment by the Company. The full Restricted Stock Plan including all terms and conditions will be presented to the Annual General Meeting in May 2012 for approval. This statement deals primarily with the remuneration of our CEO and other executive officers. However, the above described remuneration policy is to a large extent applicable to a broad group of key employees within the Company. Enhanced performance by the management groups is not achieved by our CEO and other executive officers alone but rather is dependent on a large number of managers and key employees throughout the Company. Therefore, a large and increasing number of managers and key employees are included in performance based remuneration schemes, which contain all or some of the above mentioned elements. More than 500 employees within the Company are currently eligible for performance based remuneration. In addition all other employees may receive up to a maximum of one month salary in annual bonus. The level of this bonus is determined by the Board based on the financial results of the Company. Remuneration of the CEO and other executive officers will be evaluated regularly by the Remuneration and Corporate Governance Committee and the Board of Directors. The Remuneration and Corporate Governance Committee has adopted a remuneration philosophy including a peer group of companies. An external consultant is used in the review of executive compensation to ensure that salary and other benefits are kept, at all times within the above adopted guidelines and principles. The CEO received on April 1, 2011 a set retention bonus of NOK 5,000,000 with the addition of 6% annual interest from April 1, 2008. This was part of the remuneration packaged agreed with the CEO when he joined the Company on April 1, 2008. The reason for this was that the CEO had to walk away from substantial earned equity in the company where he was formerly employed. The Board of Directors considered this necessary to secure the employment of the CEO. Since the Annual General Meeting in May 2011 the Board of Directors have followed the guidelines then approved by the Annual General Meeting with respect to remuneration of the CEO and the other executive officers. 47 PGS ANNUAL REPORT 2011 118 PGS Annual Report 2011
Notes to the consolidated financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Remuneration of auditor Fees for audit and other services provided by the Company’s auditor are as follows (exclusive VAT and including out of pocket expenses): Years ended December 31, (In thousands of dollars) 2011 2010 2009 Audit fees (a) 2,859 2,922 2,957 Other attestation services (a) 222 358 1,443 Fees for tax services (b) - 145 72 All other fees 16 - 79 Total (c) 3,097 3,425 4,551 (a) Included within the totals are fees of $1.7 million in 2009 (include attestation services in connection with sale of Onshore) which are included within the result from discontinued operation. (b) Fees for tax services consist of fees for tax filing services and other tax assistance. (c) Total remuneration to auditor includes discontinued operation for the period up to demerger closing date (relates to 2009 only). Note 35 - Subsidiaries and Affiliated Companies The ownership percentage in subsidiaries and affiliated companies as of December 31, 2011, was as follows: Company Jurisdiction Shareholding and voting rights PGS Shipping AS Norway 100% Oslo Seismic Services Ltd. Isle of Man 100% PGS Geophysical AS Norway 100% Multiklient Invest AS Norway 100% Petroleum Geo-Services, Inc. United States 100% Petroleum Geo-Services (UK) Ltd. United Kingdom 100% Seahouse Insurance Ltd. Bermuda 100% Dalmorneftegeofizika PGS AS Norway 49% Calibre Seismic Company United States 50% PGS Capital, Inc. United States 100% PGS Exploration (Nigeria) Ltd. Nigeria 100% PGS Data Processing Middle East SAE Egypt 100% PGS Data Processing, Inc. United States 100% Petroleum Geo-Services Asia Pacific Pte. Ltd. Singapore 100% PGS Australia Pty. Ltd. Australia 100% Atlantis (UK) Ltd. United Kingdom 100% PGS Egypt for Petroleum Services Egypt 100% Hara Skip AS Norway 100% Petroleum Geo-Services Exploration (M) Sdn. Bhd. Malaysia 100% PGS Exploration (US), Inc. United States 100% PGS Ocean Bottom Seismic, Inc. United States 100% PGS Exploration (UK) Ltd. United Kingdom 100% PGS Pension Trustee Ltd. United Kingdom 100% PGS Reservoir Ltd. United Kingdom 100% Atlantic Explorer Ltd. Isle of Man 50% Oslo Seismic Services Inc. United States 100% Oslo Explorer Plc Isle of Man 100% Oslo Challenger Plc Isle of Man 100% PGS Shipping (Isle of Man) Ltd. Isle of Man 100% PGS Americas, Inc. United States 100% Seismic Energy Holdings, Inc. United States 100% PGS Exploration (Norway) AS Norway 100% PGS Marine Services (Isle of Man) Ltd. Isle of Man 100% Deep Gulf LP United States 50.1% PGS Nopec (UK) Ltd. United Kingdom 100% PGS Nominees Ltd. United Kingdom 100% SOH, Inc. United States 100% PT PGS Nusantara Indonesia 100% PGS Geophysical (Angola) Ltd. United Kingdom 100% Seismic Exploration (Canada) Ltd. United Kingdom 100% PGS Investigacào Petrolifera Limitada Brazil 100% PGS Servicios C.A. Venezuela 100% PGS Venezuela de C.A. Venezuela 100% PGS Overseas AS Norway 100% PGS Suporte Logistico e Servicos Ltda. Brazil 100% PGS Finance, Inc. United States 100% PGS Japan K.K. Japan 100% PGS (Kazakhstan) LLP Kazakhstan 100% PGS Eurasia LLC Russia 100% PGS Seismic (UK) Ltd. United Kingdom 100% PGS Data Processing & Technology Sdn. Bhd. Malaysia 100% PGS Onshore (Algeria) EURL Algeria 100% PGS Overseas Operation (Cyprus) Ltd. Cyprus 50% PGS Overseas Trading (Cyprus) Ltd. Cyprus 100% MTEM Limited United Kingdom 100% PGS ANNUAL REPORT 2011 48 PGS Annual Report 2011 119
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Operations Annual Report 2011 www.p
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Key Financial Figures Key Financial
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MultiClient revenues of USD 502 mil
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Operations Main Offices oSlo Petrol
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To optimize profitability and cash
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Introduction to business units tran
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Marine Contract provides more detai
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Marine Contract OptoSeis: Enhancing
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MultiClient The MultiClient data li
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MultiClient Operations Angola: Mapp
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Operations in 2011. The performance
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Operations Ramform’s Sustainable
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Operations Data Processing and Tech
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Annual Report 2011 - PGS

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