Guidelines for remuneration to senior executives
The following guidelines for remuneration to senior executives in the Group was adopted at the extra general meeting to held on 4 September 2020.
The guidelines shall apply to remuneration that has been agreed upon or to changes in already agreed remunerations after the guidelines have been adopted by the general meeting. The guidelines do not apply to remunerations that have been resolved by the general meeting and any remuneration through shares, warrants, convertibles or other share-related instruments such as synthetic options or employ stock options shall therefore be resolved by the general meeting.
These guidelines apply to the CEO and other senior executives in the company group and all other remuneration to members of the board except fees to the Board of Directors.
Regarding employment conditions that are governed by rules other than Swedish, appropriate adjustments may be made in order to comply with such mandatory rules or established local practice, whereby the general objectives of these guidelines shall, to the extent possible, be met.
The guidelines promotion of the Company's business strategy, long-term interest and sustainability
The guidelines shall contribute to establish conditions to recruit and maintain qualified senior executives in the Company in order to successfully implement the Company's business strategy and meet the Company's long-term interests, including sustainability. The guidelines shall also stimulate an increased interest for the business and the result as a whole as well as to increase the motivation for the senior executives and to increase belonging within the Company. The guidelines' purpose is further to create a common interest for the Company’s shareholders and the senior executives. The guidelines shall also contribute to a good ethic and culture within the Company.
In order to achieve the Company's business strategy, the total annual remuneration must be market-based and competitive in the employment market in which the senior executive is situated and taking into account the individual's qualifications and experience and that exceptional performance must be reflected in the total remuneration.
Variable cash payments covered by these guidelines are intended to promote the Company's business strategy and long-term interests, including its sustainability.
The forms of remuneration etc.
The remuneration to the senior executives in the Company shall comprise of fixed cash salary, possible variable cash salary, other customary benefits and pension payments. The total cash remuneration, including pension benefits, shall, on a yearly basis, be in line with market practice and competitive on the labor market where the senior executive is based and take into account the individual responsibilities, competences, qualifications and experiences of the senior executive as well as reflecting any notable achievements. Fixed and variable cash salary shall be related to the senior executives' responsibility and authority. The fixed cash salary shall be revised on a yearly basis.
The senior executives may receive variable cash remuneration in addition to fixed cash salaries. The variable remuneration shall be based on the outcome of actual predetermined targets based on the Company's business strategy and the long term business plan approved by the Board of Directors. The targets may include share based or financial targets, either on group or section level, operative goals and goals for sustainability and social responsibility, employee engagement or customer satisfaction. These targets are to be established and documented annually. The Company has established financial targets and KPIs in relation to strategic and business critical initiatives and projects which ensures alignment with the business plan and business strategy for a continued sustainable business. The variable cash remuneration shall also be designed with the aim of achieving greater community of interest between the participating senior executive and the Company's shareholders in order to contribute to the Company's long-term interest.
Cash based variable remuneration shall be earned and paid out pro rata based on the number of working months and days since first employment date assuming the Employee starts with the company no later than September 30. If the Employee starts with the company after September 30, bonus entitlement commence from the following fiscal year. The variable cash remuneration shall amount to a maximum of 50 percent of the fixed salary (calculated at the date for vesting) T Terms for variable cash remuneration should be designed so that the Board of Directors may limit or omit payment of variable remuneration, provided that exceptional economic circumstances are at hand, if the Board of Directors finds the payments unreasonable and incompatible with the Company's responsible in relation to its shareholders. With respect to yearly bonuses, it should be possible to limit or omit payments, if the Board of Directors deems it reasonable because of any other reasons. The Company has no right according to agreements to reclaim variable remuneration paid in cash.
Additional variable cash compensation may be payable in exceptional circumstances, provided that such arrangements are time-limited and made only at the individual level. The purpose of such arrangements must be to recruit or retain executives, or as compensation for extraordinary work in addition to the person's ordinary duties. Such compensation shall not exceed an amount corresponding to 25 percent of the fixed annual cash salary and shall not be paid more than once per year and per individual. A decision on such remuneration shall be made by the Board of Directors on proposal from the remuneration committee.
The Company may provide other benefits to senior executives in accordance with local practice. Such other benefits may include company healthcare and education.
Pension payments shall be fee determined. A maximum of 25 per cent of the pension based salary may be pension premium. Employees have the right to salary exchange (i.e., instead of salary choose to receive salary as pension payments. Salary exchange shall be cost neutral for the employer). Right to pension occurs normally at 65 years of age. Bonus payments are not grounds for any pension entitlements/contributions, unless local law provides otherwise.
For executives who are stationed in a country other than their home country, additional remuneration and other benefits may be paid to a reasonable extent, taking into account the particular circumstances associated with such expatriation, whereby the overall purpose of these guidelines is to be met as far as possible. Such benefits may amount to a maximum of 15 percent of the fixed annual cash salary.
Payment of consultancy fees and additional remuneration may be paid to directors after decision by the Board of Directors, after preparation by the remuneration committee, if a director performs services on behalf of the Company, which do not constitute board work. Such remuneration shall be designed in accordance with these guidelines.
When the measurable period for fulfilment of the criteria for payment of variable cash compensation has ended, the extent to which the criteria have been met shall be determined. The Board of Directors, after preparation from the remuneration committee, is responsible for the assessment of variable cash remuneration to the CEO and the CEO is responsible for the assessment of variable cash remuneration to other executives. With respect to financial targets the evaluation shall be based on the Company's latest publicly available financial information.
Notice of termination and severance pay
Fixed salary during the notice period and any severance pay shall in total not exceed an amount corresponding to a maximum of two years' fixed salary. The maximum notice period in any senior executive's contract may be no more than twelve months during which time salary payment will continue. The Company does not allow any additional contractual severance payments.
Deviations from the guidelines
The Board of Directors shall be entitled to deviate from the guidelines, with respect to recruitment of senior executives on the global labor market to be able to offer competitive terms and conditions, in an individual case if there are special reasons for it and a deviation is necessary to ensure the Company's long term interests and sustainability or to ensure the Company's economic viability. Such deviation shall also be approved by the remuneration committee. An arrangement deviating from the guidelines can be renewed but each such arrangement shall be limited in time and shall not exceed a period of 24 months and twice the remuneration that the individual would have received had no additional arrangement been made.
Preparation, decision processes etc.
Decisions regarding salary and other remuneration to the managing director and other senior executives are prepared by the remuneration committee and resolved by the Board of Directors and, where applicable, the CEO.
The remuneration committee shall also prepare the Board of Directors's decisions on issues concerning principles for remuneration. The remuneration committee shall also monitor and evaluate programs for variable remuneration, both ongoing and those that have ended during the year, for the senior executives and monitor and evaluate the application of these guidelines for remuneration to senior executives, as well as current remuneration structures and levels in the Company.
The Company believes remuneration is one of several key components in attracting and retaining the right staff. The Company shall offer a total rewards package that is:
- Fair and equitable. No employee should be discriminated in relation to gender, ethnicity, age, disability or any other factor unrelated to performance or experience. Rewards should be understood in relation to the level of responsibility and impact on the business that a certain role has.
- In line with market. The Company strives to remunerate in accordance with market. Base and variable pay, as well as benefits and pensions should be in line with what each local market offers for similar positions.
- Performance based. The Company recognizes people who are committed to sustainable long-term performance that drives the business and develops the company in line with our values and principles. High performance is the main differentiator for employee’s rewards packages.
In preparing the Board of Directors's proposal for these guidelines, salary and terms of employment for the Company's employees have been taken into account, with respect to information on the employees' total remuneration, the components of the remuneration and the rate of increase and increase over time, when the remuneration committees and the boards of directors have decided on the evaluation of the reasonableness of these guidelines and the limitations that follows from the guidelines.
The Board of Directors considers that the guidelines on remuneration to senior executives are proportionate in relation to salary levels, remuneration levels and conditions for other employees in the group.
Information regarding remuneration
For information regarding remuneration refer to the Company's annual accounts available at the Company's website.