Remuneration to senior executives
For the CEO and other members of Group Management, the principles for remuneration approved by the AGM 2015 apply. The Board of Directors proposes that the corresponding principles be approved by the AGM 2016 for the period up to and including the AGM 2017.
The principles set forth in this item shall apply to remuneration and other employment conditions of Group Management. The principles shall apply to contracts of employment entered into after the AGM 2016 and also to amendments made thereafter to contracts of employment that are in force. Remuneration to Group Management is determined by the Board of Directors based on proposals from the Board of Directors’ Remuneration Committee.
|Remuneration to Group Management 2014-2015 1)|
|SEKt||Fixed salary||Variable salary||Pension costs||Long-term incentive||Other benefits||Severance pay etc||Total 2015||Total 2014|
|President and CEO||8,500||5,259||3,401||3,224||180||-||20,564||19,583|
|Former President and CEO||-||1,100||-||-||-||-||-||1,100|
|Other members of Group Management||32,510||18,929||11,467||5,331||1,014||2,728||71,979||72,803|
|1) For more information on the Remuneration to Group Management see note 4 in the Annual Report 2015.|
The overall principles for remuneration to Group Management shall be based on the position held, individual performance and Group performance, and remuneration shall be on a competitive basis in the country of employment. The overall remuneration package for Group Management includes fixed salary, variable salary in the form of short-term incentives based on annual performance targets, long-term incentives, pensions and other benefits. In addition, there are conditions on notice of termination and severance pay.
The Group shall aim to offer a competitive total remuneration level with a primary focus on “pay for performance.”
Fixed salary shall comprise the basis for total remuneration. The salary shall be related to the relevant market and reflect the degree of responsibility involved in the position. The salary levels shall be reviewed annually to ensure continued competitiveness and correctly reward performance.
Variable salary (Short-term Incentive “STI”)
Members of Group Management shall be entitled to an STI in addition to their fixed salary. The STI shall be based on the financial result for the Group and/or for the business unit for which the member of Group Management is responsible. In addition, performance indicators can be used to focus on areas of improve¬ment that are of special interest to the company.
Clearly defined objectives for “target” and “stretch” levels of performance shall be stated at the beginning of the year and reflect the plans approved by the Board.
The STI shall be dependent on the position of the employee and may amount to a maximum of 50% of salary on attainment of the “target” level and a maximum of 100% of the salary on attainment of the “stretch” level, which is also the maximum STI.
In the US, the STI component is normally higher and may in some cases amount to a maximum of 100% on attainment of the “target” level and a maximum of 150% of the salary on attainment of the “stretch” level.
The Board of Directors decides whether the maximum levels 50/100/150% shall be applied or if a lower level shall be used.
Long-term Incentive (“LTI”)
The Board of Directors will annually evaluate if a long-term incentive program (e.g. share-based or share-price based) should be proposed to the AGM. For more information concerning the long-term incentive program, see Note 4 in Annual Report 2015.
Pensions and insurance
Pension and disability benefits shall be designed to reflect regulations and practice in the country of employment, and the value of the benefits shall match normally accepted levels in the country. If possible, pension plans shall be defined-contribution plans in accordance with the Group Pension Policy.
Other benefits can be provided in accordance with normal practice in the country where the member of Group Management is employed. However, these benefits shall not constitute a significant part of the total remuneration.
Notice of termination and severance pay
Members of Group Management shall be offered notice periods and levels of severance pay that are in line with accepted practice in the country where the member is employed. Members of Group Management shall be obliged not to compete with the company during the notice period. Based on the circumstances in each case, a non-competition obligation with continued payment may also be applied after the end of the notice period. Such a non-competition obligation shall not apply for more than 24 months from the end of the notice period.
Previously determined remuneration that has not become payable
For the main conditions for remuneration to Group Management in current employment agreements, see Note 4.
Authority for the Board to deviate from the principles
Under special circumstances, the Board of Directors may deviate from these guidelines. In the case of such deviation, the next AGM shall be informed of the reasons.
Remuneration to the Board 2015
Remuneration to AGM-elected Board members is resolved by the AGM based on proposals from the Nomination Committee. The 2015 AGM resolved on fees of SEK 5,260t. No consulting fees were paid to Board members. No board fees are paid to Board members who are also employed by the Group. For more information concerning remuneration, see Note 4.