Welcome to Genmab's annual general meeting. Procedures for shareholders are the following. Shareholders who have registered for the annual general meeting and have logged in to the AGM portal may submit questions and comments. If you have a question or a comment, please submit it by clicking on Send Post in the top left-hand corner. If you are using a mobile device, please click on the menu in the top left-hand corner and select Send Post. Once the dialog box has opened, select the relevant agenda item from the scrollable menu. Please ensure that you fill in the subject line and add your question or comment. Once completed, click Submit Question or Comment. Questions and comments will be addressed verbally. Should you require any technical assistance during the broadcast, please contact Euronext Securities Copenhagen at +four five-four three five eight-eight eight nine four, or alternatively at vgmmail@vp.dk.
Good morning and good afternoon, and welcome to Genmab's 2021 annual general meeting. I'm Deirdre Connelly, Chair of Genmab's Board of Directors. Before we officially commence, I would like to acknowledge the virtual nature of today's meeting and inform you that you will have the opportunity to ask questions via the AGM portal after the presentation of the agenda items. Now I would like to introduce the other members of our board. Deputy Chair Pernille Erenbjerg, Anders Gersel Pedersen, Paolo Paoletti, Rolf Hoffmann, and Jonathan Peacock. We also have three employee board members, Peter Storm Kristensen, Mijke Zachariasse, and Rima Nassar, who joined the board last year.
Next, our company's executive managers, Jan van de Winkel, Genmab's Chief Executive Officer, Anthony Pagano, the company's Chief Financial Officer, Judith Klimovsky, Genmab's Chief Development Officer, and Anthony Mancini, Genmab's Chief Operating Officer, and Tahamtan Ahmadi, Genmab's new Chief Medical Officer and Head of Experimental Medicines. To officially start the proceedings for today's meeting, I would like to introduce Jørgen Kjergaard Madsen, Genmab's External Legal Advisor, who will be the Chair of our annual general meeting.
[Non-English-content] Thank you very much. Deirdre, thank you for appointing me Chair of the meeting. I hope we will have a good meeting together this afternoon. First of all, two technical details. In order to avoid, or in any case, reduce the risk of technical issues in connection with this fully electronic annual general meeting, parts of the presentations at the AGM have been pre-recorded on video. All speakers will also participate live at this meeting, which means that they will be present virtually and will be capable of answering questions and commenting on contributions from shareholders. All those participating in the AGM via the AGM portal will be able to follow proceedings either in Danish or in English by clicking the appropriate link on the portal.
As usual at Genmab's AGMs, we will have full simultaneous interpreting from Danish into English and from English into Danish throughout the proceedings. It will also be possible to put questions in writing via the portal. The slide on the screen now shows how to put questions or make contributions. Inside the portal, you have to click Send Message in the top left-hand corner. A dialog box will open where you can choose the item on the agenda that your question or comment relates to. You fill in the subject field, and then you key in your question or comment, and then you press Send. I would also remind you that it is only possible to put questions via the portal. If you follow the AGM live, so to speak, via a webcast, it is not possible to participate by putting questions or making comments.
If you know already now that there are items on the agenda that you have comments or questions for, please send them to us as soon as possible. We will deal with your contributions when we reach the items on the agenda that they relate to. If there are technical problems of some kind, it is unfortunately not possible to handle these problems via the portal that you have logged on to. You have to contact VP Securities directly on the phone number visible on the screen, which is +forty five for Denmark and four three five eight-double eight nine four. You can also send them an email, vgmmail@vp.dk. You see the email at the bottom of the screen.
There will be people ready there to help you with any problems that you may have. My first job is to find that the meeting has been legally and lawfully convened and is quorate.
With reference to Section one of Ministerial Order 142 of 2020, it is okay to have a fully electronic AGM, although this is not included in the company's articles of association. The convening notice must have been made duly, which is not later than four months after the expiry of the financial year. This is in accordance with Article 8 (2). That has been complied with. There must be the right notice, minimum three weeks, maximum five weeks, and the convening mode must be such that the announcement is apparent on the company's website. It must also be available from the Nasdaq Copenhagen website, and you must send written notice to shareholders having requested in advance to receive such a message.
I find that all was done on the 9th of March this year, the agenda and the complete proposals and the annual report and all the documents that are required to be disclosed by Danish company law have been made available to shareholders as required, three weeks in advance. There is nothing on the agenda that requires the presence of a specific proportion of shareholders or of the share capital of the company. Against this background, I find that the AGM has been duly and lawfully convened and is quorate. In order to make sure that there are no objections or comments from the shareholders to this, we will have the first of several short breaks to enable you to contribute. The minute starts now.
We have not received any comments concerning the meeting so far, so I will now turn to the agenda and go over the individual items. The first four items on the agenda relate to the Board's report on the activities of the company in the past year. We have presentation of the Audited Annual Report 2020 and discharge of members of Board of Directors and Executive Management. We have resolution on the distribution of profit as recorded in the adopted annual report, and item four, presentation of an advisory vote on the compensation report 2020. The proposal is that we deal with these first four items in one go, and it will be the Chair of the Board of Directors, Deirdre Connelly, that starts out, followed by the CEO, Jan van de Winkel, and the CFO, Anthony Pagano. They will deal with this sort of consecutively.
We have item five, election of members of the Board of Directors. Again, it will be the Chair of the Board, Deirdre Connelly, that will introduce the item. Six is election of auditor. Seven, a number of proposals from the Board of Directors, here I suggest that we take a closer look at the various proposals when we get to that item on the agenda. Eight, the standard authorization granted to the Chair of the meeting, any other business under nine. I would also point out that the number of votes received by postal votes and proxies constitute a sufficient majority to adopt everything on the agenda. We don't have any formal requirement to have votes in order to adopt all the proposals contained in the agenda.
First, I'd like to hand over to the Chair of the Board, Deirdre.
This presentation will include forward-looking statements. As drug development is not always a straightforward journey, it is important to understand that what we discuss today is our aim, and that you are aware that there may be external events that cause us to change course in the future. As a reminder of why we are all here, Genmab is passionate about the development of innovative antibody products with the potential to transform cancer treatment and improve the lives of cancer patients. This passion has not wavered for 20 years. The company's bold core purpose, to improve the lives of cancer patients, is linked to an extremely effective strategy that we have followed for over 10 years. By focusing on our core competencies of being able to identify the very best disease targets, develop differentiated next generation antibody technologies and create unique best-in-class or first-in-class antibodies.
We have been able to turn Genmab's world-class science into a robust proprietary pipeline and approved medicines, effectively allowing us to build a sustainably profitable and successful biotech. We now have a short film for you to bring these concepts to life, and to show you, in more than words, who we are. Let's play the video.
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We hope you found that film inspiring, because you are also part of our story. Genmab's success is also due to the support we have from you, our shareholders. I would like to take this opportunity to thank you for your support of us as we move closer to achieving our vision of transforming cancer treatment. Now, I would like to hand over to Genmab's CEO, Jan van de Winkel. Jan will discuss in greater detail Genmab's many accomplishments in 2020, as well as our key goals and plans for 2021.
Thank you, Deirdre, and thank you to everyone joining us for this virtual AGM meeting. Despite the many challenges posed by the COVID-19 pandemic, 2020 was a transformational year for Genmab. I'm pleased to provide a brief overview of our recent successes and share a glimpse of what you can expect from Genmab in 2021. Genmab has a strong foundation of innovative science and an unparalleled history of repeated R&D success. Over the course of the past few years, we strategically built on this foundation with the goal of evolving into a fully integrated end-to-end biotech. Because of our world-class team, we reached an inflection point in 2020 with a series of key events. First among these is our collaboration with AbbVie. This was a landmark achievement for the company.
This collaboration allows us to both expand and accelerate the development of three of our bispecific antibody products. It further strengthens our already very strong financial position. 2020 is our eighth year of profitability with a impressive 139% increase in operating profit versus 2019. Our strong balance sheet allows us to strategically invest in our capabilities and differentiated product pipeline. These investments are already showing themselves in the way our pipeline is expanding and maturing, with two of our products, epcoritamab and tisotumab vedotin, now in Phase III clinical development. It's not only in our pipeline where we see Genmab's innovation in action. Janssen is developing multiple products incorporating our proprietary DuoBody technology. One of these products, amivantamab, became the first DuoBody to be submitted for regulatory approval. I'm very pleased with our track record of success. We are just getting started.
I now would like to briefly focus on Genmab's first regulatory submission, along with our partner Seagen, for tisotumab vedotin. I'm extremely proud of the BLA submission for tisotumab vedotin, the first for a product where Genmab has 50% ownership of the program. If approved, tisotumab vedotin would be a first-in-class therapy, and we believe it has the potential to become an important treatment option for women with recurrent or metastatic cervical cancer who have disease progression on or after chemotherapy. We look forward to providing you with an update on this submission in due course. As you can see here, Genmab has a track record of achievement regarding approved antibody therapeutics. Darzalex, Kesimpta, and TEPEZZA are Genmab-created human antibody therapies marketed by other companies, all of which had firsts in 2020. Darzalex is now a mega blockbuster that has redefined the treatment of multiple myeloma.
In 2020, a subQ formulation was approved in both the U.S. and in Europe, making it the first and only subQ CD38 monoclonal antibody approved for the treatment of multiple myeloma. Early this year, this formulation was approved in the U.S. in AL amyloidosis, making it the very first FDA-approved treatment ever for this devastating disease. A second subQ medicine approved in the U.S. in 2020 was subcutaneous ofatumumab, or Kesimpta, for relapsing MS. This is the first B-cell therapy that can be self-administered by patients at home. Following a positive opinion from the CHMP in January this year, Kesimpta was also recently approved for relapsing MS patients in Europe as well. Finally, TEPEZZA, which became the first and only FDA-approved medicine for the treatment of thyroid eye disease.
We are highly enthusiastic about the future of these medicines, as they exemplify our commitment to applying our world-class antibody expertise to create differentiated antibody therapeutics with the potential to fundamentally improve patients' lives. Of course, the collaborations for these three medicines have provided us with the financial foundation of our current success. With recurring revenue from royalties on Darzalex, Kesimpta, and TEPEZZA, which we can use to invest further in the business to deliver on our inspirational vision. As I alluded to in my previous slides, our maturing pipeline is the result of this investment in our world-class R&D engine. Our novel approaches to disease target discovery and unique next-generation antibody technology platforms allow us to create truly differentiated antibodies that will further fuel our own pipeline with potential first-in-class and best-in-class therapies.
We are highly confident that our technologies will continue to grow our pipeline because we have already been doing this. On the right, you can see the impressive progression resulting from our productive R&D engine and expanding clinical development programs in our pipeline over the past five years. In 2016, we only had two product candidates in the clinic. We anticipate more than eight programs underway by the end of this year in more than 20 clinical trials. Our pipeline is not just growing, it's also rapidly maturing. As I mentioned, we started the year with two products, epcoritamab and tisotumab vedotin, in phase III, and we are planning for additional phase III trials to start in this year. Now let's move to the next slide and a closer look at two key areas of investment in our pipeline in 2021.
To continue to deliver on Genmab's promise of creating and developing truly differentiated antibody therapeutics, we intend to continue to significantly invest in the development of both epcoritamab and DuoBody-PD-L1x4-1BB. We are continuing to focus on these particular products, given our belief in their potential to become important new treatments should they be approved. Let's start with epcoritamab. We believe this could be a best-in-class product. This confidence comes both from the clinical data we have already seen and from its subcutaneous route of administration, a feature that differentiates it from other CD3/CD20 bispecifics. Along with AbbVie, we are planning a highly comprehensive and aggressive development plan for this product across a variety of hematological malignancies and lines of treatment.
The next one, DuoBody-PD-L1x4-1BB, one of the products that we are developing along with BioNTech, has the potential to be a first-in-class and to provide Genmab with a truly differentiated first-in-class bispecific next-generation checkpoint immunotherapy. There is a high unmet medical need to improve on checkpoint immunotherapies, and we are encouraged by the first clinical data presented at SITC last year. Given the potential for these products to be either best or first-in-class, their significant potential across multiple oncology indications and unmet medical need for patients, we remain focused on further accelerating these programs. This reflects our clear priority of developing differentiated therapeutics for patients as fast and as broadly as possible. Essential to our success in 2021 are our key priorities for the year. With the submission of the tisotumab vedotin BLA, we are on track towards reaching these goals.
We will focus our resources on continuing to further expand and develop our world-class antibody product pipeline. In addition to advancing our already late-stage product candidates, very excitingly, we anticipate to move at least one more proprietary product into late-stage clinical development during 2021. We very much look forward to updating you on a number of our clinical programs over the course of this year. We will continue the strategic development of our internal capabilities with the goal of building a smart commercialization model, as we aim to not just create medicines that transform cancer treatment, but to provide these medicines to doctors and patients in the most effective way possible. Finally, as Anthony will discuss, we expect to further strengthen our already extremely solid financial foundation. As evidenced in the previous slides, we are very close to reaching our inspirational 2025 vision.
Our vision has acted as a guiding light for us. It has focused us on our core purpose to fundamentally improve the lives of cancer patients. This core purpose is linked to a laser-sharp strategy that will allow us to build a profitable and very successful biotech. Today, we have reached an inflection point in this exciting journey, where we find ourselves with two potential product launches in the next couple of years, and with more to come as we evolve into a leading, fully integrated biotech innovation powerhouse. Thank you for your attention and for your continued support. We hope that you all remain healthy, keep optimistic, and stay safe. I'm pleased to now hand over to my colleague, Anthony Pagano, our CFO, to discuss the 2020 financials and 2021 financial guidance. Anthony, the floor is yours.
Thanks, Jan. Let's move to the next slide. We've never been in a better position to achieve our vision of transforming the lives of cancer patients. In 2020, we've continued to execute against our priorities despite the challenges of COVID. My objective today is twofold. First, to explain why 2020 has been yet another remarkable year for Genmab, and second, to provide our guidance for 2021, which is set to be another very strong year. I want to start by reminding you of the robust foundation we've continued to strengthen. We grew recurring revenue by 50% in 2020. That's due to royalties from Darzalex, TEPEZZA, and Kesimpta, and that's ensured an eighth consecutive year of profitability.
Our strong balance sheet and growing recurring revenues allowed us to continue to invest in our business and our pipeline in a very focused and disciplined way, and an important part of this has been to continue to build the team and capabilities to enable us to succeed. Let's look at those revenues in a bit more detail on the next slide. Looking at the graph on the left, you can see that there were two main drivers for the higher revenue in 2020. First, we recognized 90% of the upfront payment from AbbVie. Now, clearly, that's a one-off contribution. Second, recurring revenue grew by 50%. That's primarily due to Darzalex royalties, which were up 41%, and we also saw additional recurring revenue growth from TEPEZZA and Kesimpta royalties. Partially offsetting these two items was significantly lower milestones in 2020.
As well as increasing revenues, we also increased investment, as you can see on the next slide. Total operating expenses came in just a touch below DKK 3.8 billion in 2020. Here you can see where we invested. We accelerated our investment in our product portfolio, especially the advancement of both epcoritamab and DuoBody-PD-L1x4-1BB. We've also spent more on expanding our team, hiring key team members to support our growing product pipeline, and we've continued to build our commercial capabilities, and invest in systems to support our expansion. Finally, we are leveraging the AbbVie collaboration by utilizing their expertise and significant financial contributions to further accelerate and broaden our partnership programs. Now let's look at our financials as a whole on the next slide. Here you can see our summary P&L.
In 2020, revenue came in at DKK 10.1 billion, an increase of over DKK 4.7 billion compared to 2019. The increase was primarily driven by the upfront payment from AbbVie and higher Darzalex royalties. Total expenses were approximately DKK 3.8 billion, with 83% being R&D and 17% G&A. Operating income was DKK 6.3 billion, compared to DKK 2.6 billion in 2019. Our net financial items amounted to a loss of DKK 409 million, which was primarily driven by two partially offsetting items. First, unrealized foreign exchange rate losses related to our U.S. dollar-denominated cash and investments due to the move lower in the dollar. Second, an unrealized gain on our investment in CureVac. We have tax of DKK 1.1 billion, which equates to an effective tax rate of 19.4%.
It's important to note that this rate is positively impacted by some one-time items in 2020, so it isn't reflective of what we would expect moving forward. That brings us to our net income of DKK 4.8 billion. By any measure, 2020 was an extremely strong year. Before I provide you with our guidance, I'd again like to spend a moment explaining the underlying framework and the related key drivers. First off, let's think about our revenue profile. On the left, you can see the component parts of our current and future recurring revenue streams. Starting with the approved products where we receive royalties, we're looking forward to the continued growth and expansion of Darzalex in 2021 and beyond. You can also see Kesimpta and TEPEZZA.
As we've heard from our partners, these are both potential blockbuster products, so we're really excited about the potential of these two recurring revenue streams for the years to come. We've also got two potential additional revenue streams in the future. We submitted the BLA for tisotumab vedotin earlier this year. At the end of last year, Janssen submitted a BLA and an MAA for amivantamab. If these products are approved, they'll bring our total number of approved products to five. Now on to our focused approach to investment shown on the right. We'll continue to invest to position us for sustained success with focused and disciplined investment in our pipeline, and we'll accelerate and expand our potential winners. We'll also ensure we are ready to launch should tisotumab vedotin, and in the future, epcoritamab be approved.
As well as investing, we will of course remain focused on the bottom line, and we fully intend to deliver a ninth consecutive year of profitability. Having looked at our framework, let's look at our 2021 guidance on the next slide. We expect revenue to be in the range of DKK 6.8 billion-DKK 7.5 billion. As you can see, most of this is made up of recurring revenue. For operating expenses, we expect to be in a range of DKK 5.5 billion-DKK 5.8 billion. This step-up in investment is fully in line with our strategy and our focus on creating long-term value. Putting all this together, we're still planning for substantial operating income in 2021 in a range of DKK 1 billion to DKK 2 billion. For my final slide, let me provide a few closing remarks.
In summary, we've created strong and growing recurring revenue streams, and that gives us a strong backbone of significant underlying profitability. We're investing those revenues in a highly focused way to realize our vision and capitalize on the very significant growth opportunities in front of us. Thank you for your attention and your continued support. Now, I'd like to hand the meeting back over to Jørgen Madsen.
Thank you very much. Under these first four items on the agenda, we're only left with item three, which is the distribution of profits. The proposal here is that the profit of the financial year 2020, DKK 4,758 million, be carried forward by transfer to retained earnings. Item four on the agenda is to do with the compensation report for an advisory approval. Here I refer to the compensation report which was sent out with the convening notice and which is also available on the company's website. Those were the first four items on our agenda for today. Here, I would normally open the debate. We would usually leave the rostrum for the shareholders.
This year, we have a fully virtual AGM, but I would like to urge any shareholders who should have any comments or questions to please send them through our portal right now. I can also inform you that we have already received contributions and comments for the AGM. We have, first of all, a comment from the Danish pension fund, ATP. I will read it out loud now. This is from Claus Berner Møller at ATP. I quote: I would like to start by commenting briefly on the results for 2020. Of course, the COVID crisis has also affected a company like Genmab, however, not to the same extent as many other companies. In fact, 2020 was a very positive year for Genmab when it comes to the financial results as well as the development of the pipeline. We were rewarded as shareholders for that.
I have a few comments when it comes to Genmab's recent initiatives within ESG. ATP has for several years urged Genmab to put more effort into ESG and to report better in these aspects, and we are happy to see these initiatives. Genmab has established a working group chaired by Jan van de Winkel to develop the policy within ESG. Genmab has chosen UN SDGs, SDG 3, SDG 5, and SDG 8 as having particular importance for Genmab, and you also follow the guidelines from SASB. Genmab has now taken the first important steps within ESG. To ATP, it's important that all companies take their part of responsibility within ESG, partly because it is important in itself, but also because it's a competitive parameter towards customers and when recruiting that you behave responsibly as a company.
These first initiatives must, however, be followed up by clear, measurable benchmarks within things like CO2 emissions, water consumption, and waste management. I clearly expect that Genmab will be able to fulfill many of these wishes within one year. I also have a few comments for today's agenda. We will be voting against the remuneration report under item four, not because of the implementation of the report itself, but since we voted against the remuneration policy, we will also be voting against the remuneration report. We will also vote against the proposal under item 7A, as the cash portion of the fee for ordinary members is proposed increased by 50%. The maximum value of RSUs to be given to new board members is also increased by 50%.
ATP generally believes that it is inappropriate to use one-off payments when recruiting new board members. As the maximum value of allocated RSUs is even increased to DKK 2.4 million, ATP will be voting against. Another change to the remuneration policy under item 7C gives the opportunity to further expand the variable portion of the salary. ATP believes that the variable part of the salary is already too high in Genmab. With the proposed changes, this portion could be even greater. We will be voting against item 7C. Thank you. Those were the words from ATP. I give the floor to CEO Jan van de Winkel for a response.
Thanks, Jørgen. A very short comment from me to you, Claus. Thank you for stating that 2020 has been incredibly positive for Genmab's financial performance, pipeline development, and for shareholders. We also appreciate the positive statements on our ESG activities in 2020, and respect ATP's constructive remarks on some remuneration aspects on today's AGM agenda. I want to leave it with that. Back to you, Jørgen.
Thank you very much. The next contribution we have received is from the Association of Danish Shareholders by Bjarne Kongsted and Klaus Füllman, and I quote: "Hello, my name is Klaus Füllman. I am from the Association of Danish Shareholders working in the interest of Danish private shareholders. Thank you for the link for the summary. The summary is quite informative, but we still would like to see that the annual report be elaborated in Danish as well, seeing as the company is domiciled in Denmark. First of all, I congratulate you with the good results for 2020 and the impressive increase in equity. In the budget for 2021, net revenue has been reduced due to the reduction in payments from Janssen on royalties.
Why hasn't Genmab taken this reduction into the budgets and financial statements for 2019 and 2020? Is there a new development in the arbitration from 2020- 2021? What is the view of the attorneys of Genmab? When does Genmab expect this arbitration to be ended? The Association of Danish Shareholders will, throughout this year, be following the investments of Genmab closely when it comes to research and development and the transformation towards a complete biotech. We're very interested to see the results of these investments. One of our focus areas in 2021 is succession. That is, the pipeline of new candidates for management. Can you elaborate on how you're going to ensure retention and development of new, strong candidates for executive management to ensure that you have qualified candidates enough in the coming years?
We would also like to thank the many very skilled employees in Genmab for their efforts throughout the year in spite of COVID-19. Thank you." Those were the words from the Association of Danish Shareholders, and again, I give the floor to Jan van de Winkel.
Jørgen, I want to start by thanking the Danish Shareholders Association for the positive statements on 2020 as well as compliments to our fantastic team. This is greatly appreciated. Let me briefly say something about the arbitration matters that we currently engaged in with J&J. We actually flagged them up in September last year, and we are vigorously protecting our rights under the agreement with J&J. However, the outcome of any arbitration proceeding, as well as the duration, is inherently uncertain, as we have messaged before. I cannot provide any further information as it relates to this arbitration, but I will be more than happy to do so once this has been concluded. Let me pass on the next part of the question on the 2021 guidance and how in that guidance we have been most into the guidance, the withholding on Darzalex royalties by Janssen.
Why didn't we do that before in 2020 and 2019? Anthony Pagano, maybe you can go into that question.
Great. Thanks, Jan. As we previously highlighted, Janssen started making deductions to our royalties in 2020. We need to follow the accounting rules and show these deductions as a reduction to our royalty income. For 2020, the impact to our financials was not significant. For 2021, with the continued expected uptake of the subQ formulation, we expect that the impact will be much more significant. We thought it was important to provide this level of clarity and information as we put forth our 2021 guidance, and that's exactly what we did. It's important to highlight that this accounting treatment and the way we've reflected this does not in any way reflect our position on this ongoing matter. Of course, as Jan highlighted, we will continue to vigorously defend our contractual rights. Jan, back to you.
Thanks, Anthony. The last point on the question on Genmab succession planning and how the board is dealing with that, I want to delegate that question to Deirdre. Maybe Deirdre, you can give some perspective here.
Of course, Jan. Thank you. It's a great question. At Genmab, our board takes great responsibility in the development of our executive team. Succession planning is a very important responsibility of any board. We do it in several committees, where we discuss performance, development, and succession of all of our executives. We bring it back to the full board for review. We do this at least once a year.
Thank you very much, Deirdre, for that perspective. I think I hand the floor back to you, Jørgen.
Thank you very much. I can tell you that we have received two questions from shareholders, one from Mr. Kjell Hansen and one from Mr. Uwe Jensen. They are relating to the same subject.
Namely whether the board of directors has considered performing a share split to make the share more easily tradable.
Thanks, Kjell and Uwe, for the question. I can tell you that right now, we do not have any plans to do a stock split. However, the board is regularly considering matters concerning the markets and developments in our share price and looks at the pros and cons of different strategies. I think that's where we need to leave it at right now. Jørgen?
Thank you very much. It does not seem that we have received any further questions or comments from the shareholders. Just to give you the chance to send in any comments or questions that you might have, we will take another short break of about one minute. We have received no further comments or questions for the first four items on the agenda. I'll also note that the company's auditors, PwC, have submitted an unqualified audit report. You'll find it on page 150 of the annual report.
In the absence of any further contributions from shareholders, I find that the AGM has taken note of the report by the Board of Directors, that the 2020 annual report has been approved, and that discharge has been granted to members of board and executive management, that the distribution of profits resolution means that we have carried forward the profit to next year, and we have also had an adoption of the compensation report. Now, item five, election of members of the Board of Directors, and I would like to give the floor to Deirdre Connelly, the Chair of the Board.
Each year, we evaluate the composition of the Genmab board to ensure we have the right mix of competencies for an international biotech company and consider whether changes need to be made. I'm pleased to say that we continue to believe we do indeed have a good mix, so I am pleased to recommend reelecting all of our current AGM-elected board members. I will now run through the competencies and biographies for reelection. I was elected on the board in 2017 and have been Board Chair since last year. I'm standing for reelection for a one-year period. I have extensive experience in drug launches and corporate governance, both of which are increasingly important as Genmab grows. Pernille Erenbjerg was elected to the Genmab board in 2015. She has been Deputy Chair of the Board since last year and is standing for reelection for a one-year period.
Pernille qualifies as an audit committee financial expert and adds valuable financial and digital expertise to the Board. Rolf Hoffmann was elected to the Genmab Board in 2017 and is also standing for reelection for a one-year period. Rolf's significant commercial experience is valuable competency Genmab will need as we work towards achieving our 2025 vision. Paolo Paoletti was also elected in 2015 and is also standing for reelection for a one-year period. Paolo's broad pharma and oncology experience gained during his tenures at GlaxoSmithKline and Eli Lilly make him a valuable Board Member for Genmab. Jonathan Peacock was elected to Genmab Board in 2020 and is also standing for the reelection on our Board for a one-year period. Previously CFO at both Novartis and Amgen, he brings with him extensive experience in corporate finance, strategy, and international expansion in the pharmaceutical industry.
Our sixth member, Anders Gersel Pedersen, has served on Genmab's board since 2003 and is also standing for reelection for a one-year period. Anders continues to provide important insights into the biotech industry and the Danish investment community to the board. In addition to the board members elected by the general meeting, we also have three employee-elected board members, Peter Storm Kristensen, Mijke Zachariasse, and Rima Nassar. All three of the employee board members were elected to the board in 2019 for a three-year period. I will now hand it back over to the chair of the meeting so he can lead the election of the board of directors. Jørgen?
Thank you very much. It will appear that all members of Genmab's board are up for re-election once a year. I'd like to hear if there are any contributions from shareholders, any questions or comments, any other candidates. In order to allow time for shareholders to contribute, we will have a break, approximately one minute.
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We have not received any contributions from shareholders, nor have we heard of any other candidates. I find that the board has been re-elected. Congratulations to you all. Which brings us to the next item on the agenda, which is item six, election of auditor. It is currently PricewaterhouseCoopers that is the company's auditors, and the proposal is to re-elect this company. For the sake of good order, I would like to hear if there are any contributions, questions, comments from shareholders. We'll have another break, approximately one minute.
We have not received any contributions from shareholders concerning this item on the agenda, nor have we received any other candidates. I find that PricewaterhouseCoopers have been re-elected. Congratulations. Item seven on the agenda, proposals from the board of directors. As previously mentioned, we have several proposals or sub-items, and we will take 7A first.
Mostly on.
This is a proposal for the approval of remuneration to the board of directors for 2021. I will start by giving the floor to the Chairman of the Board.
Thank you, Jørg. Before I present the first proposal, it is important to note that Genmab is on an exciting journey. We continue to successfully execute our strategy. We are progressing towards our goal of launching our products, and we are on a trajectory to becoming a fully integrated biotech and global oncology leader. Genmab is proud to be a Danish company, but we face the challenge of operating in a fast-moving global oncology sector, in which many, if not most, of our competitors are based in the United States, as are many of the talented people we need to recruit and retain. Accordingly, our ability to recruit and retain market-leading talent requires a global perspective. Genmab's compensation program assesses these global factors affecting Genmab in the context of both executive compensation and board compensation remuneration.
The first proposal, item 7A, is the approval of the remuneration of the board of directors for 2021. The proposals include increasing the base fee for members of the board of directors from DKK 400,000- DKK 600,000. The Board of Directors believes that this ensures that Genmab A/S, as it grows in both complexity and size, can continue to attract and retain highly qualified board members from the U.S. and around the world who are able to commit their skills, experience, and time to the board of directors. All other board fees remain unchanged. In addition, it is proposed to reduce the multiplier related to the fee for the Chair and Deputy Chair to 2x the base fee for the Chair and 1.5x the base fee for the Deputy Chair, as set out in agenda item 7B.
Board members would also receive RSUs within the scope described and adopted in the remuneration principles. Jørgen?
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Thank you very much.
Let me ask if there are any questions or comments to this proposal. As I note the comment from ATP regarding this item, but just to be sure, we will take a short break of about one minute to give you the chance to send in any comments or questions regarding this item on the agenda. We have not received any questions or comment relating to this item on the agenda, and therefore I can conclude that the proposal is adopted. Before I move on to item 7B, I can just note that we have received one more question from a shareholder, which perhaps should have been treated under item one to four. Instead, I suggest that we will take it now. This is a question from shareholder Kjell Hansen regarding any dividends to be paid out from the company.
The question is: Can you, as a shareholder, expect a dividend in the future? Here I leave the floor to Jan van de Winkel.
Thanks, Jørgen. Let me deal with this question from Kjell Hansen. Kjell, thank you very much for the question. We are building a very strong pipeline of first-in-class and best-in-class products. In order to meet the goal of developing these medicines, we will have to actually prioritize investing in developing these molecule so they can, in the end, make a real difference to cancer patients. We actually also need to maintain a strong capital position in order to ensure investor and creditor confidence in the company in the future. We prioritize investing in the pipeline, Kjell, and at this moment do not plan to return capital to investors via dividend payments. Back to you, Jørgen.
Thank you very much. From here, we will move on from where we left off, item 7B. This is an adoption of an amendment to the remuneration policy where we have a proposed change, and I leave the floor to Deirdre Connelly.
Thank you, Jørgen. The second proposal, item 7B, involves amending the company's remuneration principles for the board of directors. As previously mentioned, the board of directors proposes to decrease the base fee multiplier for the Chair from 3x- 2x , and decrease the base fee multiplier for the Deputy Chair from 2x- 1.5x , and amend this element of the remuneration policy for the board of directors and the executive management of Genmab A/S accordingly. I will now hand it back to Jørgen, who will continue proceedings regarding this agenda item. Jørgen.
Thank you very much. Under this item as well, I would like to ask whether there are any questions or comment, and just to make sure that you have the chance to send in any comments, we will take a short break of about one minute. We have not received any questions or comment regarding this item, and I therefore conclude that the proposal has been adopted. That brings me to the next item on the agenda, item 7C. These are changes to the remuneration policy other than the amendment just adopted in 7B about the multiplier provisions. Here I refer to these changes. There are quite a number of them, and I refer you to the updated remuneration policy published
In connection with the notice convening the AGM, which is also available on the company's website. Under this item as well, I would like to ask whether there are any comments or questions and to allow for any incoming questions or comment, we will take a short break of one minute. We have not received any questions or comment relating this item. That leads me to item 7D. [Non-English content] 7D is a proposal about granting authorization to the board of directors to acquire treasury shares up to a total nominal amount of DKK 500,000. With a maximum deviation from the price quoted on Nasdaq of 10%. This is a standard item. It is an authorization that is usually granted for five years at a time. The proposal is for this one to run until April 12th, 2026.
Let's have one minute's break to allow time for shareholders to contribute.
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There are no contributions from shareholders, I find that the proposal has been adopted. Which brings us to item 7E, a proposal to authorize the board of directors to issue new shares and convertible bonds up to a total amount DKK 5.5 million. Again, I'd like to hear if we have contributions from shareholders attending this meeting by electronic means. Let's have a break of about one minute. We have received no comments or questions from shareholders, I find that this proposal has been adopted. Now we have arrived at item 7F on the agenda, a proposal from the board of directors to be authorized to issue up to an additional 750,000 warrants to employees of the company and the company's subsidiaries within a specific set of conditions.
Again, I'd like to hear if there are questions or comments from shareholders. A break. We have no contributions from shareholders. I find that the proposal has been adopted. Next is 7G, a proposal to introduce a new provision in the Articles of Association, so that in special situations, it is possible for the company to hold AGMs as fully electronic meetings. I give the floor to the Chair of the meeting, Deirdre Connelly.
Thank you, Jørg. At Genmab, we encourage active shareholder involvement and participation, physical or virtual. The COVID-19 pandemic has made it apparent that the board of directors needs to have the option to decide that a general meeting will be held as a wholly virtual general meeting without physical attendance in special circumstances, such as when travel or assembly restrictions hinder a physical general meeting, and provided that shareholder participation rights can be ensured. We hope the rationale behind the proposal is clear and that it is only in special circumstances such as the current situation we are in, and we hope we will not be in a situation as this again in the foreseeable future. Item 7G on the agenda is a proposed amendment to Article 8B in the company's Articles of Association.
The board therefore proposes that the general meeting authorizes the board to decide to convene general meetings as wholly virtual general meetings without physical attendance, and thereby to adopt a new Article 8B. Jørgen?
Thank you very much. I'd like, once again, to ask shareholders if they have questions or comments. We'll have a one-minute break.
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Welcome back. In the absence of any contributions from shareholders, I find that we have now completed our discussion and treatment of all proposals from the board of directors, and this one too has been adopted. Next is item eight on the agenda, which is the standard authorization to the chairman of the meeting, so that I can make sure that the resolutions passed at the meeting are registered with the Danish Business Authority. In order not to have too many breaks, et cetera, we will combine this with any other business, item nine. I see now that we have actually received a contribution from a shareholder under any other business. This is a comment, again, from Mr. Kjell Hansen, who merely expresses lots of praise to members of board and executive management for a good year.
Again, I'd like to hear if there are other comments or questions. I promise you this will be the last break. Approximately one minute.
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We have no further contributions from shareholders, which means that I find that the proposal in item eight has been adopted. We have also dealt with item nine. We have exhausted the agenda. I will now hand back to the Chair of the Board, Deirdre Connelly, to close the meeting.
Thank you all for your participation in this meeting. We very much appreciate your support and hope that we will be able to meet with you in person at the AGM of 2022. Thank you