I would like to welcome all shareholders and others who have appeared to the ordinary general meeting in Borregaard ASA. My name is Andreas Jarbø, and I'm the lawyer with the law firm Selmer. As you will see from the notice of this AGM, the board of directors of Borregaard ASA has appointed me to open today's annual general meeting. As you can see, with me on the podium are Jan Oksum, Chair of the Board of Directors, and CEO Per Sørlie. I would also like to add that in addition to Jan Oksum and Per Sørlie, we also have the company's auditor, [Jan Velumsvensen ] from Ernst & Young, the state public authorized auditor, present at this general meeting. I would also like to inform you that Borregaard has decided that this annual general meeting is going to be transmitted by so-called webcast.
This doesn't mean that you can participate electronically in the meeting itself, but you can log in and follow the proceedings from the meeting on your laptop. Therefore, everyone who would like to take the floor who are present in this room need to use the microphone. I also ask everyone who takes the floor to inform who they are and which shares they represent. I assume that no one has any objections. That does not seem to be the case. I assume that all shareholders and any proxies have registered and that ballot slips have been handed out. If not, please contact the representative of the DNB Bank, who are here. If some of you still haven't registered, please do so by the door. That does not seem to be the case.
In my capacity as the person opening this annual general meeting, I will draw up a list of shares legally represented at this general meeting. This list of the number of shares has been drawn up by DNB Bank, and the exact number who are represented at this AGM is 43,433,526 shares. This is equivalent to 43.41% of the shares eligible to vote. As for the list, I would like to say that as the person opening the meeting, and in line with former practice in the company, I will not enforce the deadline set for registering attendance at this meeting very strictly. Extremely few shareholders register too late, and we are liberal and allow them to attend the meeting.
We can't see that it will cause any practical problems to be liberal here, and it will also not have any consequences in the vote if we compare it with the advance votes cast. Do anyone have any questions or any objections to the list of shareholders represented? That does not seem to be the case, and I hereby conclude that the annual general meeting have approved the list. Let's now go to the matters that we are to attend. First, we also need to go to the person appointed to meet. According to the Public Limited Liability Companies Act, the general meeting is to elect a moderator to chair the meeting, and the board has proposed that I be elected chair. Are there any other proposals? That does not seem to be the case. I thank you for your confidence.
According to the act, the minutes of the AGM shall be signed by the chair and at least one other person elected by the annual general meeting from among those in attendance. The person elected must be available to stay behind for a while after the annual general meeting, and I hereby move that Ole Hvattum be elected to co-sign. Do you have the possibility to stay behind? Are there any other proposals, any other candidates to co-sign? That does not seem to be the case, and I hereby consider Ole Hvattum to have been elected, and I would also like to remind Ole Hvattum to come forward after the close of the annual general meeting to co-sign the minutes. In accordance with the Companies Act and the company's articles of association, the annual general meeting is convened by a written notice to all shareholders with a known address.
The notice shall be sent at least 21 days before the general meeting is to be held. This notice is dated 25th of May, 2020, and was sent to the shareholders on the same day. The notice was also announced by a notice through the Oslo Stock Exchange and has been available on the company's website in Norwegian and English translation. The annual general meeting has thus been convened in accordance with the provisions applicable to public limited liability companies and the company's articles of association. I therefore assume that no one has any objections to the notice convening the AGM and the agenda. That does not seem to be the case, and I hereby declare this general meeting for having been legally convened. Before we move on, and as I mentioned initially, in accordance with the notice, proxy votes have been cast, partly with restricted voting instructions.
Advance votes have also been submitted electronically pursuant to the Public Limited Liability Companies Act and the company's articles of association. I do not intend to read out the results of all the advance votes cast, but about just over 60%, roughly, of the votes have been cast in advance. This means that most matters and items on the agenda have already been voted. Therefore, there will probably not be any change in the votes cast here. Next is item two, the approval of the annual financial statement for 2019 for Borregaard ASA and the group, as well as the Directors Report, including approval of an ordinary share dividend of NOK 2.30 per share, except for treasury shares. Before we formally deal with the annual financial statements, the CEO of the company, Per Sørlie, will report on the company's activities and the key figures for 2019.
ThenJan Oksum, Chairman of the Board of Directors, will give an account of the board's consideration behind the proposed dividend. The idea is then to open the floor for shareholders who wish to give comments and ask questions. I give the floor to Per Sørlie. Thank you.
I will give you a general introduction to the company first, and then we will have a look at the results for 2019. I will start with our business model, where the point of departure for most of what Borregaard produces would be biomass from logs. It has three components, as we can see here on the slide. We use the fiber for producing specialty cellulose and nanocellulose particles. We call them cellulose fibrils. We use the lignin, which is the natural connective tissue, to produce biopolymers and biovanillin. Then finally, we use the sugar in the log for producing bioethanol. In this way, we have a full exploitation of the raw material space, and we also produce a number of products that compete with oil-based alternatives.
Here we have a different presentation of the same concept. Here we see that if we send in 1,000 kg of wood into our plants, we get out more than 870 kg of finished products so that we convert most of the primary materials, raw materials, into ready products for sale. We use the leftovers for bioenergy production. We have virtually 100% exploitation of the inputs, the raw materials. This illustration also shows that these are so-called products. These are integrated products so that they are produced simultaneously. It is important for us to have markets for all of these products, and so that we do not need to reduce our production because we have market problems in one of these fields. At the bottom of this slide, we see Borregaard's portfolio products. We produce 700 products for markets at Borregaard.
We have a number of products within each field of application. As a consequence, we have a very robust business model, and we can move within the markets if changes happen. Finally, we see in the upper right-hand corner that our end markets, well, there we have construction. It represents 25% of our products. That's where 25% of our products wind up. This is a market which from time to time is cyclical in nature, so it is important for us to have a product portfolio that provides us with major end market alternatives. The other fields, like food and pharma, and agriculture, are markets which often are more stable over time.
Borregaard has now been stock exchange listed for eight years, and we used this opportunity at the end of the year to change the way we report our business areas, our business segments, because we wanted to have a better connection between the value chain in production, how we report internally, so that it would be easier to have a connection between internal and external reporting. We have three business segments. We have BioSolutions. These are all the products that are lignin-based. That is the natural connecting substance in the log. It consists of biopolymers and biovanillin. This area is now organized under a single management. Before, these were the business segments of performance chemicals and ingredients part that form part of other businesses. Now, this is BioSolutions. The second business segment is BioMaterials, which are all products utilizing wood fibers as the main raw material.
This includes specialty cellulose and cellulose fibrils. Finally, we have Fine Chemicals, the products that we sell to the pharmaceutical industry, mainly for diagnostics. That is a contrast for x-rays and also bioethanol for biofuel. Before we reported our corporate overhead and other certain costs that were central, for instance, research and development. These costs are now distributed among the three new business segments so that we do only report on three segments, three profit centers. Other businesses, R&D businesses, that is now discontinued as a separate segment. Here we have the new segments for our future reports. Borregaard is a global niche player, which means that we are a company that has global positions, but we are a rather small company.
We also operate in market segments that are small and have entry barriers so that we can hold a strong position and also a leading position in those markets. Here we see the three new areas, and we see that BioSolutions represents almost 60% of our turnover. BioMaterials, our fiber-based business, represents about one third of our business, while Fine Chemicals is the smallest business segment, 7%. On this slide, we also see that the sales distribution for Borregaard is quite well distributed around the world. About 50% of our sales are destined for Europe, mainly German-speaking countries. A bit more than 20% turnover is in Asia, and almost 30% in the Americas. About 10% of our employees work within sales and marketing. They often work on solution-based sales. It's not a pure sales activity.
There is also technical customer support that helps customers using our products in the right way. Our sales group handles 90% of sales. It is only exceptionally that we use distributors or those kinds of intermediaries in our sales and marketing efforts. Borregaard has followed a specialization strategy for a long period of time. By specialization, we mean aiming at global niches with high barriers to entry, and Borregaard has a position that is protected by knowledge and the use of our products, and a proximity to our customers. As we saw before, we also have a pretty diversified market strategy and global market positions. Both of them reduce risk for us in the market, and they provide us with alternatives when we face difficult situations. The company is run strategically on two approaches.
One thing we work on is innovation to protect our margins and to develop our business over time, both top line and bottom line. At the same time, we also work with continuous improvement to make sure that we have a competitive cost advantage. The business model concerning innovation involves large parts of our activities. It's not only the R&D section that deals with R&D. A large part of our organization is involved in R&D. Continuous improvement is typically driven on the basis of three parallel processes. We work with using different kinds of technology. Digitalization is very much in vogue now. We also increase the competence within our own staff so that the technology can be used in a good way. Then we have work on the organization so that we can organize ourselves in an efficient way by using new technology and new competence.
Competence is an important driver. It supports our strategy, we have defined competence within R&D and production and sales as the three core competencies so that we want to develop them over time so that we have a competitive organization. What is it that drives us in a direction of specialization? It changes with time. We have now come out of a rather important period of investments from 2015 to 2019. We have invested NOK 1.7 billion in expansion investments that shall provide for growth and further specialization. These investments were completed within the allotted time and within budget. Now that we are coming out of this investment period, we now focus more on implementing these products in the market so that we can place our new products, be that within growth or more specialization.
The most important investments were in Florida, starting 2018, with lignin and an upgrade and facilitation of further specialization within lignin-based products in Sarpsborg. We have also invested in bioethanol and specialty cellulose. We are also working with biovanillin right now. We have invested in a number of our different segments. At the beginning of this period, we also invested in Exilva, our microfibre cellulose product portfolio, the fibrils. Sustainability is ever more important in our markets. We started working on sustainability 12 years ago. We started with life cycle analysis that documents the environmental and CO2 footprints for all of our product portfolio. If you look at this in a more structural way, on the left-hand side, we see the raw materials of Borregaard.
They are mainly from logs, and the finished products also have components mainly from the logs in them. That raw material doesn't provide any problems in the sense that all of our sources of raw materials are certified based on different standards. This means that we have a highly sustainable supply of raw materials, both for our activities in Norway and for our lignin plants abroad. We have worked systematically for a long time on reducing our emissions, especially of CO2 from our plants. Which means that the CO2 footprint has been improved, and we document this through an updating of life cycle analysis on a regular basis. Our offer to the markets, well, it's not only about the climate. We offer more to them. We have defined this within three separate areas.
Firstly, we have products where we can offer a concrete reduction of CO2 footprint. We do this through life cycle analysis. That is of interest to many of our clients. There are also strong trends where one wants to have bio-based products. That is, products that have 100% natural point of departure for the production. Of course, for Borregaard, this is of great interest. We have our natural raw materials. We have biomass. We have the environmental health and safety. That is also an important factor. We can offer a number of products that are non-toxic and harmless compared to petrochemical products. When customers use them, they are less exposed to environmental toxins, for instance. All of these elements form part of what we consider to be sustainability. Some examples of this, well, the footprint, the CO2 footprint.
We have a very simple product with regard to that. Borregaard's second-generation bioethanol. Second-generation means that this product has been made from raw materials that do not compete with food production. This is also an environmental advantage. We have our sugar from the logs. That is, our sugars come from the forest. The CO2 footprint is reduced sevenfold when you use Borregaard's bioethanol instead of ordinary gasoline as a propellant. On the lignin side, on the right here, we have a number of safety advantages. The example that we present to you here is within pesticides. When the farmer uses products with lignin, they will mainly be water-based, which means that you're less exposed to environmental toxins compared to solvent-based pesticides. Borregaard also participates in the UN Global Compact, this cooperation, UN Global Compact.
As regards UN Sustainable Development Goals, they are positive with regards to driving opportunities for Borregaard. The environmental risks are either positive or zero. We have more advantages than disadvantages linked to the climate issues. The fact that there will be a climate change opens some market opportunities for Borregaard that did not exist before. We work quite a lot in our product development and marketing on exploiting and marketing and contributing to us giving our little effort and contribution towards obtaining the UN Sustainable Development Goals. There's especially six SDGs where we can contribute. We have a separate chapter in our environmental report of our annual report that looks at this in detail, how we work on these issues, the SDGs, and what we can contribute with in this field.
Finally, also the financial markets are very focused on sustainability. Borregaard spends quite a lot of effort on reporting to external international bodies, which measure and monitor sustainability very often on behalf of investors. Last autumn, Borregaard had their science-based targets for greenhouse gas emissions, or carbon emissions, approved by CDP. CDP is an external body that is owned by the United Nations and World Wide Fund for Nature, among others. They also approve and give a quality stamp to corporate plans. We had the targeted reductions in emissions last year, and we are going to reduce our carbon footprint by 53% by 2030, and also even more by 2050. This is also by 100% by 2050, and this is also in line with the Paris Agreement and also the Norwegian climate law. There are also a series of rating agencies which assess corporate footprints over time.
By several agencies, Borregaard is rated. We maintained an A rating last year, and we did the same the previous year with CDP. CDP was formerly the Carbon Disclosure Project. There are 8,400 companies that are rated by the CDP, and only about 2% are awarded an A rating. As a chemicals company, Borregaard is one of the very few companies in our industry that have an A rating. Well, on the subject of financial objectives, we made one small change to our financial objectives last year. That is what we called the net interest-bearing debt divided by EBITDA, the leverage ratio. It should be between 2.25. We used to say between one and 2.25. We have now increased this to 2.25. That is the effect of after the introduction of new accounting principles, the IFRS 16.
To a certain extent, and also to align with these new accounting principles. We have now changed our leverage ratio and say that the target is now between 1.0 and 2.25. The dividend policy that you see here is something that the chair of the board will revert to later. I may also comment on the financial performance for 2019. We changed our reporting so that also at the business segments, we will report on EBITDA. That is the operating profit before amortization. We will still then return on EBITA and also the return, but we believe that EBITDA will give a better picture of our performance. EBITDA increased from NOK 900 million to NOK 1 billion, and also, the sales revenues increased to about NOK 5 billion.
We also see some of the measures we've taken also improved the performance, and it more than offset and compensated for increased costs. We also saw higher wood costs. They also increased in 2019. We saw an operational incident at the Sarpsborg site, which also increased our costs and also softened the results there. The higher wood costs and this operational incident then gave a slightly weaker result in BioMaterials. Fine Chemicals results mainly improved by positive development for bioethanol. We have increased in new equipment to produce more biofuel. Currency impact is positive, and also the new accounting principles after the implementation of IFRS 16 leases also had a positive impact in 2019. Also taking into account the developments in the EBIT.
If we look in a few more details, we saw that cash flow increased from NOK 709 to NOK 905, and that was partly because of the improved performance, but also improvements in the working capital. As I said, we have now completed a major expansion investment program, and in the middle here, you see the light gray deal that account for the expansion investments are now being reduced, and they will now be around NOK 200, and that following the completion of the facilities in Florida and also the work done in Sarpsborg. Therefore, we are now through with a very heavy investment period. Our equity is still very solid, 51% at the end of 2019. Also, our leverage ratio, that is net interest-bearing debt over the EBITDA, was also 1.86. We also saw that we had good access to capital through our facilities.
Following the year-end in 2019, we have seen a new situation where we face the coronavirus challenges. Borregaard initiated measures early to deal with the situation, particularly on the EHS side. We have also set up an emergency preparedness organization. We have a regular follow-up and monitor. We also have a series of measures to deal with the effects of coronavirus. When we reported the first quarter 2020 performance, we said that there was few adverse effects from coronavirus situation. The logistic challenges and other practical challenges that occur because of all the international measures have had little effect and impact on deliveries and the production in the first quarter.
However, at the beginning of the second quarter, we saw that we needed to close our plant in South Africa. That was because they lost the feedstock supply, and that was a direct result of the virus industry situation, and therefore the management chose to close down the plant, and also that led to us getting an impact on the supply. We believe that plant will be closed down for some duration now. When it comes to the future outlook, we presented an outlook the first quarter presentation, and we do see some impact, particularly in the construction in the biopolymer area where we see some accelerations or where some supplies have been postponed. As I also mentioned, typically, construction area, where we supply 25% of our sales, are often affected when we see either cyclical effects or other changes.
Because of the South Africa lignosulfonate plant, which in volume is a rather big operations, we expect demand to be higher than the supply of lignin, even if we take the construction aspects into consideration because of the South African situation being out of operation. We also say that the situation that is caused by the coronavirus, it could impact us in the future and also other suppliers and some business partners and customers may be impacted. Therefore, we also monitor the marketing aspects very closely through these times. As I also said when I commented on the business model, we have a very robust business model. We have a diverse marketing strategy, and therefore, we often have good alternatives in the market, should unexpected events take place.
I would like to leave you by a slide which shows you the value creation in the Borregaard share after the IPO in 2012. This representation shows partly, here you see the blue column, net debt ex IFRS. The green is the market capitalization of the company shares at the end of the various times, and the top gray box is the accumulated dividend paid out. What you see to the right is that if you bought a share at the IPO in 2012, you will have achieved a 27.2% earnings per share if you had reinvested in the share. Enterprise value, which also includes our net interest-bearing debt, grew by just under 20% on an annual basis after the IPO. This is, of course, a very positive development for everyone who has been part of this journey.
I will now thank you for your attention, and this was what I had to say in my review of the operations.
Thank you, Per Sørlie.
Jan Oksum first, who will present the board's proposal for a dividend for 2019.
Thank you. The company's dividend policy has been the same since we were listed on the stock exchange eight years ago. We're going to pay a stable and increasing dividend to shareholders in line with long-term revenue and expected cash flow. We aim at giving a dividend that corresponds to 30%-50% of the net profit for the preceding years. For 2019, the board proposes a dividend of NOK 2.30, which is a bit more than 30%-50% because in the fourth quarter, we had extraordinary events that led to a somewhat lower than result than expected. The board has, of course, also thought through whether it is responsible to pay out this dividend based on the company's financial situation, and we believe it is.
There will be no dividend for the 407,340 shares that are owned by the company, the treasury shares.
Thank you, Mr. Oksum. Does anybody want to ask questions to the financial report, the presentation of the company or the company's financial situation? That does not seem to be the case. We have now arrived at the formal discussion of the financial report for 2019. It also considers the proposed financial accounts for the company and the group. We find this on the website. We have just taken you through the main points. I presuppose that you are familiar with the financial accounts. As regards the auditor's report, we don't consider it necessary to read it out loud, Jan Velumsvensen, Government Authorized Auditor, is hereby asked to provide a brief presentation of the auditor's report. Thank you.
Our auditor's report has been included on page 123 of the annual report for 2019. We have presented a clean auditor's report for Borregaard ASA and the group, and we have also included so-called central key audit matters in our report for Borregaard. We have the environment and EHS as key elements, and this was dated the 19th of March 2020.
Thank you to the auditor, [Jan Velumsvensen]. Do you approve of the financial accounts for 2019 for Borregaard, the company and the group, and the auditor's report? Also to decide on the dividend. We propose the following. The AGM approves the board's proposal for financial accounts, annual report for the financial year of 2019. There will be an ordinary dividend of 2.30 NOK per share except the treasury shares, and this will be paid to those who have shares as per 17th of June 2020.
From tomorrow, 16th of June, the shares will trade ex-dividend. Shares that have been acquired up to today will entitle the shareholder to a dividend if they have been registered in the normal way through VPS. 24th of June 2020 is the expected payout date. Does anybody have objections or comments to the proposal of the board? That does not seem to be the case. There's been a decision then on dividend, and the financial accounts have been approved. Now the guidelines on remuneration of management. It follows from the company side that the AGM shall discuss the leading management's or key management's remuneration for 2019, and there shall be an advisory voting on the guidelines for remuneration of senior management for this year. That is the financial year 2020.
Thirdly, the law requires that the guidelines for share options and other incentive programs should be approved by the AGM. Since we have a share price incentive program, there should be both an advisory vote on the guidelines and a binding vote on the incentives. You can find this as an annex to the notice, and you find this to 23 to 87 of the annual report. You should also look at note seven. Here we have Mr. Oksum, who will present the proposal for guidelines for this year and a report on the remuneration.
As we stated, you find these cases in our notice and annual report. I thought I would not go into any details here. First, as regards the guidelines that we have for 2019.
As you can see, we have collected salary data from other companies to fix the remuneration for senior management. We did this study in 2019. Because of development in this company and other companies, it was necessary and correct, which was also said at the AGM last year, to adjust the fixed salary of the CEOs. The other elements have been mentioned already. I can just confirm that everything that was done in 2019 was in line with the principles adopted at the AGM last year. As it says here, we declare that the policy has been followed in 2019 and up to the date of AGM. Next item concerns salaries for senior management for this year. The principles are the same as always.
Overall, these should be competitive conditions, they should be long-term, they should have sufficient flexibility, and the system should cause an alignment of the personal conditions and the company's goals. The fixed salary should be close to the median of comparable companies and positions. Pensions should be based on established contribution-based schemes, and the annual bonus system should take into consideration good results and progress from the previous year. We have made a slight adjustment with regard to previous years because we have replaced the parameter EBITDA with EBITA, which is more relevant. This has also been mentioned when we had the previous review of the results for last year. The annual bonus can be a maximum of 50% of the annual salary, and if you do a good job and you deliver the expected results, one should have about 30% of an annual bonus.
This is also a separate item on long-term incentive schemes. There we have two elements. One is a share program with rebate shares for all employees. Of course, this is available for senior management at a rebate of up to 25%. There's a limit as to how much. There is a lock-in period of one year. Then you have a long-term incentives program for senior staff, where the purpose is to strengthen the ownership perspective and the value development of the company, and investments should reflect the contribution from each individual. This contributes towards senior management and key staff having an incentive for staying with the company long-term. This is based on good results. Of course, that's the most important objective in line with the company's goals and values.
This will be offered to personnel that is critical for the goals of the company and also staff that is hard to replace and where there might be a risk that they quit. This is also linked to good performance. If you don't deliver good performance, you wouldn't be all that sad if somebody would come up with the idea of quitting the company. This does not automatically follow any position. If you get this one year, it doesn't automatically mean you will have it the next year. There's a limit on the number of options for each person, the profit for every year, and you have to buy shares for a considerable part of the value that you are given. There is an accrual period of three to five years to be able to earn the right to get those options. This is a proposed decision.
The AGM recommends that the board's guidelines for senior management incentives for the fiscal year 2020, they are recommended. We recommend that you approve the guidelines for long-term share related incentive schemes for the financial year 2020. Any comments to the proposed guidelines for remuneration of senior management? That doesn't seem to be the case. Now, the declaration of salaries for senior management for 2019 has been presented to the AGM. It should not be voted on. Now, the guidelines for 2020, as mentioned, there should be an advisory vote on the guidelines as regards that part of the guidelines that has to do with the share price of Borregaard. For that part, the vote will be binding on the board. Do you want us to have a separate vote on these two parts, or can we vote on both simultaneously?
Nobody has any objections to us voting simultaneously on both elements, and then I ask the AGM to approve the guidelines for senior management remuneration for 2020. The proposed resolution has been read out already, so I will not read it again. Any objections, any abstentions, any votes against? That does not seem to be the case, so this motion has also been carried. Item four, report on the corporate governance of the company. The ordinary AGM shall discuss the principles and practices of the board for its corporate governance, and the report on this is in the annual report on page 16 and the following pages. Mr. Oksum again. Thank you.
Those who are particularly interested can look at pages 16 to 24 of the annual report.
The main principles have been shown in this figure, where the board has to. We have an audit board and a compensation board, and especially the audit board is important for internal controls. Within the administration, we have internal control, risk management, compliance board, and sustainability board. They report to the CEO, and they also report to the board's audit committee if there are things that the board should be particularly aware of. This system has worked well since its inception, and it has not been amended in recent years. Thank you.
Thank you for the presentation. Thank you, present. Any questions or comments? That does not seem to be the case. The AGM has discussed the company's report on corporate governance. Item five, authorization for acquisition of own shares. The complete proposal is found in the notice of the general meeting.
You also see it on the screen behind me. As you can see from this proposal, own shares can be used for the incentives program for employees or for amortization, that is, they will be annulled. These are two purposes. You can vote separately on those two different purposes. Does anybody here object to us voting on those two purposes of the authorization to acquire own shares separately? That doesn't seem to be the case. Does anybody want to vote against or abstain from voting? That doesn't seem to be the case either. This item on the agenda has also been adopted.
Next is item six, namely the election of Board of Directors and Chair. Then in line with the articles of association, a Nomination Committee should then propose candidates, and the Nomination Committee's recommendation, as well as a notice convening the AGM dated 10th of March 2020, and has been available on the company's website. I now give the floor to Chair of the Nomination Committee, Mimi Berdal.
Thank you. We have now come to the items that I will be presenting to the annual g eneral meeting. I think it's four items, two elections, and also two proposals for remuneration. The first being the election of members and a Chair of the Board of Directors of Borregaard ASA. Here in this company, we also elect the Chair of the Board directly.
The nomination committee was elected at the general meeting last year in 2019 and consisted of myself, Erik Must, Rune Selmar, and Ole Wessel-Aas. Øystein Djupedal, among the employee elected board members, he has given here the employees' views, also in line with the collective agreements and the board's rules. In line with the election at the AGM, the nomination committee has had a dialogue, has had contact with the company's bigger shareholders, and also have had meeting with some of them. Involved shareholders actively. When it came to the elections for the board and the nomination committee. The committee's assessment, which we also share with the shareholders we've contacted, is that there is a very good and relevant composition of the board, in line with the company's needs, and also the competence required and the instructions.
The attendance has been very good, both in board meetings and committee meetings. The list of candidates for the various posts have been presented in appendix to the notice. I don't see any need to go through them. Next, we see the proposal. I propose Jan Oksum as Chair, Terje Andersen as member, Tove Andersen, a member, Margrethe Hauge, member, and Helge Aasen as members. That is a recommendation to reelect all.
As I mentioned, the proposal is also to reelect Jan Oksum as Chair of the board, and we have also consulted before the presentation of candidates. We propose a term of office of one year until the annual general meeting in 2021. Here we see the specific, and that is to reelect the board too, with a term of office until the next ordinary annual general meeting in 2021.
Would anyone like to propose any other candidates? Do you have any objections? No, there seems to be none. Would anyone like to vote against or to abstain? That does not seem to be the case either, Therefore, we consider that the board of directors to have been reelected. We will now come to item seven, namely the election of members and the chair of the nomination committee. We've also seen proposal there, and Mimi Berdal will take us through the proposal.
As with the board, we believe that it is important with a combination of renewal and also continuations. From 2016 to 2017, the committee had three new members, and they now represent major Norwegian shareholders. So far, international shareholders have not yet expressed the wish to be directly represented.
Apart from me, who have a small holding, then we are to make sure that the interest of the shareholder pool in general are represented. We propose that all four members of the nomination committee be reelected, and the backgrounds have been described in the annual general meeting documents. We also propose that the term of office for the nomination committee is one year until the ordinary annual general meeting in 2021.
In other words, Mimi Berdal, Erik Must, Rune Selmer, and Ola Wessel-Aas all be reelected as members of the nomination committee. Furthermore, we propose that Mimi Berdal be reelected as the Chair of the Nomination Committee. In line with the proposal, we propose the term of office of one year until the next ordinary annual general meeting in 2021. Do anyone have any alternative proposals for candidates or positions?
That does not seem to be the case. Would anyone like to vote against or abstain from voting? That doesn't seem to be the case either. We hereby consider the Nomination Committee for having been reelected. This brings us to items eight and nine, and these are two points where we are going to approve the proposals for remunerations for members of the Board of Directors and of the Nomination Committee. I propose that we do this jointly, but that we vote separately. I give the floor to Mimi Berdal, Chair of the Nomination Committee again.
First, I would like to present the proposal for the remuneration of members, observers, and deputy members of the Board of Directors.
These have been described in more details in the recommendation of the nomination committee that are available on the website of the company and were also sent out as an appendix to the notice convening this meeting. The nomination committee has, in its work, to determine the remunerations based on two principles. We have used that for the past years, namely that we should have a competitive remuneration without being leading. We check this annually where we benchmark remuneration by looking at what is published by various institutes. The other aspects that we also take into account is a link to link the shareholder-elected representatives to the company. As we heard the Chair of the Board say, we have an employee-elected share program for the employees so that we have all interests represented based on a benchmark of the remuneration and listed companies.
The committee has decided to propose that the members of the board and members of committees have their remuneration adjusted in line with the salary developments in the company for last year, namely 3.3%. This is also in line with previous practice. However, based on this benchmark, we have proposed a somewhat higher increase in remuneration for the chair of the board. It was lagging behind, so we have proposed an increase in the board fees of 4.8%. 20% of the fees for members of the board, ex committee, where it should be spent on purchasing company shares.
This scheme was introduced in 2018, we saw this in the fact that shareholder-elected members of the board were increased by 15%, partly to compensate in the loss of liquidity since they were required to purchase shares from 15%-20%, also gave us a 5% negative impact, or it did at the time the scheme was introduced. However, that is the reason why the levels are slightly different when it comes to the shareholder-elected members and the employee-elected members. We also saw that after 2018, we have heard about the employee-elected share-related scheme for the employees. Last year, at the annual general meeting, it was asked that they assess this again, if the employee-elected member should have the same thing.
We have reassessed this. We believe that what we decided in 2018 still stands. Therefore, based on the levels that have been applied the last two years, we will continue. The nomination committee has also followed up the ownership of the shareholder-elected holdings. We see that all hold shares in line with the requirements. We see here what this means in terms of actual numbers. Namely, the Chair of the Board will increase from NOK 525,000 to NOK 550,000. Board Member elected by shareholders, NOK 339,100 to NOK 324,300. Member elected by the employees, NOK 281,400 to NOK 290,700. Observers from NOK 93,700 to NOK 96,800. Also the deputy, NOK 7,500 now. We also see that shareholder-elected Board Members are required to purchase shares for 20%. We also see the board committee, Chair of the Audit Committee, now NOK 90,700 per year. Members of the Audit Committee, NOK 60,800 per year.
Chair of the compensation committee, NOK 54,400 per year, and member of the compensation committee, NOK 42,400. We propose that this will apply until the next ordinary general meeting in 2021.
I will also give a brief presentation of the proposed remuneration for members of the nomination committee. We propose the same principle as for board members, which is that these remunerations should be adjusted upwards by 3.3%, which is what the salary increase was. The head will have NOK 60,200 per year, and members NOK 42,400, and also there will be a supplement if there are more than four meetings. We suggest that these fees should be in place for a year, like for the board, and they should be paid in installments throughout the period of one year. Thank you.
Any questions or objections to the proposed remuneration for members of the board or the nomination committee and the chairs? That does not seem to be the case. We will first vote on remuneration on board members. That is item eight of the agenda.
We have just taken you through the proposal. Does anybody want to vote against or abstain with regard to remuneration for the board? That doesn't seem to be the case either. Let's go on to item nine, remuneration of members of the nomination committee. Does anybody want to vote against or abstain? That does not seem to be the case either, so we consider the proposals for items eight and nine to have been carried. Last item on the agenda, approval of the auditor's remuneration. As you can see from note five to Borregaard ASA's financial accounts, there is an audit fee for Borregaard ASA of 413,000 NOK. Any comments or questions regarding the proposed fee for the auditor? That does not seem to be the case. Does anybody want to vote against or abstain from voting? That does not seem to be the case either.
The auditor's remuneration has been approved. We have now taken you through the agenda, and what is left for me to say is to thank you for your attention. I declare Borregaard ASA's annual general meeting closed. Mr. Hvattum , you have to come down and co-sign the minutes. Thank you all.